(Adds background in paragraphs five through nine and notes
efforts to reach FTC and Hilcorp in paragraph three.)
By Angel Gonzalez and Ryan Dezember
Marathon Oil Corp. (MRO) said Tuesday that the U.S. Federal
Trade Commission is reviewing its deal to sell Alaska oil and gas
assets to Hilcorp Energy Corp.
A company spokeswoman said Marathon has received a "civil
investigative demand and subpoena" from the FTC, and that it has
been working with the agency in the matter. "We remain confident
that we will close the transaction, subject to completion of the
necessary Government and regulatory approvals, during the fall of
this year."
An FTC spokesman couldn't be reached for comment. Nor could
representatives of Hilcorp, which is based in Houston.
Marathon announced the deal in April, and said then it expected
the deal to close by the fall.
The sale includes 17 million barrels of oil equivalent of net
proved reserves across 10 fields in Alaska's Cook Inlet, as well as
natural gas storage and stakes in natural gas pipelines.
In January, Hilcorp closed a deal with Chevron Corp. (CVX) to
buy its oil-and-gas-producing fields around Alaska's Cook Inlet.
Those assets were producing 3,900 barrels of oil and 85 million
cubic feet of natural gas daily when the deal closed.
Financial terms of both transaction have been withheld by the
companies.
Alaska's natural gas market is disconnected from that of the
lower 48 states, which have seen prices for the fuel fall as
producers unleashed new supplies from shale formations.
Alaskan prices, meanwhile, track closer to global prices, which
are much higher than those in the lower 48 states.
The natural gas that provides fuel for much of Alaska's
population comes from the Cook Inlet on the state's southern
coast.
Drilling declined in the inlet in recent decades as energy
producers turned their attention to Alaska's prolific North Slope
oil fields.
Much of the gas mined there, however, is reinjected into the
ground because there is no means to transport it to the state's
population centers to the south.
In the last year, however, producers including Hilcorp, Apache
Corp. (APA) and Buccaneer Energy Ltd. (BCC.AU) have made new
investments in Cook Inlet.
Write to Angel Gonzalez at angel.gonzalez@dowjones.com
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