[Editor's note: This story was updated from a previous version posted at 6:55 a.m. CST March 2.]

Marathon Oil Corp. (NYSE: MRO) said March 2 it has exited Libya, marking Marathon’s seventh country exit in five years as the Houston-based company continues to go all-in on U.S. shale.

Marathon signed and closed on the sale of its subsidiary, Marathon Oil Libya Ltd., to Total SA (NYSE: TOT) for $450 million cash. The divestiture price equates to nine times Marathon Oil’s estimate of its 2018 free cash flow from Libya at strip pricing, according to the company press release.

The sale includes the company’s 16.33% nonoperated interest in the Waha concessions in Libya and represents a complete country exit for Marathon. At year-end 2017, the company carried 199 million barrels of oil equivalent (boe) of proved reserves in Libya.

For Marathon, the deal is a positive as it further cleans up its portfolio while providing more dry powder for acquisitions, said equity research analysts from Tudor, Pickering, Holt & Co. (TPH).

“While use of proceeds were not mentioned, with the balance sheet in decent shape, we think the company will continue to pursue its No. 2 priority of attaining scale in the Delaware,” TPH analysts said in its morning note on March 2, adding that the sale will add to Marathon’s already sizeable war chest.

TPH expects Marathon’s U.S. Gulf of Mexico and U.K. North Sea assets to be next on the chopping block.

Driven by its “relentless focus on portfolio management,” Marathon President and CEO Lee Tillman said the company has generated more than $4 billion from asset sales within the last two years.

“Today’s announcement to divest Libya at an attractive valuation continues the simplification and concentration of our portfolio to the high-margin, high-return U.S. resource plays,” Tillman said in a statement.

As a result of the sale, 95% of Marathon’s 2018 development capital allocation and about 70% of the company’s total production mix will be associated with the U.S. resource plays, “naturally expanding our margins in 2018 and beyond,” he added.

For 2018, Marathon is planning a capex of $2.3 billion, up from last year’s $2.2 billion. About 60% of its budget will be spent in North Dakota’s Bakken play and the Eagle Ford Shale in South Texas. The remainder will be deployed in the Permian Basin and Oklahoma’s Stack and Scoop plays.

Marathon said the Libya divestiture closed on March 1 with an effective date of Jan. 1.

Other Waha stakeholders are Libya's state-owned National Oil Corp. (NOC) with 59.18%, ConocoPhillips Co. (NYSE: COP) with 16.33% and Hess Corp. (NYSE: HES) with 8.16%. The Waha Oil Co., a 100% NOC-owned entity, operates the asset.

Marathon has been considering a full exit from Libya since at least mid-2013 but has been prevented from doing so by the NOC, according to a Reuters report.

The acquisition of Marathon’s stake will give Total more than 500 million boe of reserves and resources, with immediate production of around 50,000 boe/d and a “significant exploration potential” in the Sirte Basin, the company said.

“This acquisition is in line with Total’s strategy to reinforce its portfolio with high-quality and low-technical cost assets whilst bolstering our historic strength in the Middle East and North Africa region,” Patrick Pouyanné, chairman and CEO of Total, said in a statement. “It builds on the group’s long-term presence in Libya, a country with very large oil and gas resources, and demonstrates our commitment to continue supporting the recovering oil and gas industry of the country.”

Total has been active in Libya since 1954, according to the company’s press release.

Emily Patsy can be reached at epatsy@hartenergy.com.

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