HOUSTON (AP) -- Marathon Oil Corp. said Wednesday that it will sell its 10 percent stake in certain offshore operations in the African nation of Angola for $1.5 billion and use the cash to buy back shares.
The Houston-based oil company said that it will sell its stake in the production sharing contract and joint operating agreement in Block 31 to SSI Thirty-One Ltd., owned by Sonangol Sinopec International. SSI currently holds a 5 percent working interest in the block. BP Exploration Angola operates Block 31 and holds a 26.67 percent working interest in it. Sonangol EP holds 25 percent, Sonangol P&P holds 20 percent and Statoil Angola AS holds 13.33 percent stake.
The deal is still subject to regulatory approval but the companies expect it will close by the end of the year.
Marathon expects to use the proceeds from the sale to buy back shares, strengthen its balance sheet and for general corporate purposes
Once the deal is complete, Marathon said it will have agreed upon or closed on nearly $2.9 billion in divestitures, at the upper end of its goal of $1.5 billion to $3 billion of divestitures between 2011 and 2013.
Marathon shares rose 13 cents to $35.14 in midday trading amid broader market gains.