ConocoPhillips to Acquire Marathon Oil in $22.5 Billion Deal Amid Continued Energy Mergers

In a move that further solidifies the ongoing consolidation trend in the oil and gas industry, ConocoPhillips announced its agreement to acquire Marathon Oil in a massive $22.5 billion deal. This deal comes as companies in the sector are looking to bolster their reserves amidst a booming stock market and record-breaking U.S. oil production.

The all-stock offer from Conoco equates to $30.33 per Marathon share, representing a premium of nearly 15% based on Tuesday’s closing stock price. The transaction, which includes taking on $5.4 billion of Marathon’s debt, is expected to close in the fourth quarter of 2024.

With the acquisition, ConocoPhillips adds over 2 billion barrels of reserves to its portfolio, further solidifying its position in key regions like the Bakken basin in North Dakota, the Permian basin in West Texas, and South Texas’ Eagle Ford basin. ConocoPhillips CEO Ryan Lance expressed excitement about the deal, stating that it deepens their portfolio and adds high-quality, low-cost inventory to their existing assets.

The consolidation wave in the industry has seen other major deals like Exxon’s acquisition of Pioneer Natural Resources and Chevron’s proposed merger with Hess. However, this increased activity has also attracted antitrust scrutiny, with the FTC reviewing multi-billion dollar deals involving several key players in the industry.

ConocoPhillips also announced plans to dispose of nearly $2 billion worth of assets and ramp up share buybacks, signaling confidence in the deal’s potential benefits. The company’s strategic moves and commitment to shareholder value highlight the dynamic landscape of the oil and gas industry in the current market environment.