ConocoPhillips announced on Wednesday that it will buy Marathon Oil in an all-stock deal valued at $22.5 billion, including $5.4 billion of debt.
Marathon Oil shareholders will receive 0.2550 shares of ConocoPhillips for each share of Marathon Oil common stock. Under the agreement, ConocoPhillips will receive additional acreage to its existing U.S. onshore portfolio, adding over 2 billion barrels of resource.
Marathon Oil has operations in the Bakken basin in North Dakota, the Permian basin in West Texas and South Texas’ Eagle Ford basin – regions that are prime targets for producers looking to increase their inventory.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| COP | CONOCOPHILLIPS | 114.20 | -4.76 | -4.01% |
“This acquisition of Marathon Oil further deepens our portfolio and fits within our financial framework, adding high-quality, low cost of supply inventory adjacent to our leading U.S. unconventional position,” ConocoPhillips CEO Ryan Lance said.
ConocoPhillips also signaled it would ramp up share buybacks to $7 billion next year from this year’s projected $5 billion and commit to buying $20 billion of its shares over the three years following the deal’s closing.
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This marks the latest in a string of mergers in the U.S. oil and gas industry. Last year, companies in the industry already struck $250 billion worth of M&A deals, according to Reuters.
On Tuesday, Hess Corporation shareholders approved the company’s $53 billion merger with Chevron Corporation.
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In October 2023, Exxon Mobil announced it was acquiring Pioneer Natural Resources in an all-stock deal valued at $59.5 billion.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| XOM | EXXON MOBIL CORP. | 114.86 | +1.44 | +1.27% |
| CVX | CHEVRON CORP. | 159.04 | +1.29 | +0.82% |
Such deals have come under scrutiny from the Federal Trade Commission (FTC) for antitrust violations.
The ConocoPhillips deal is expected to close in the fourth quarter.
Reuters contributed to this report
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