ConocoPhillips has agreed to buy Marathon Oil in a $22.5 billion deal, the latest in a series of mega-mergers in the oil and gas industry as companies look to bolster reserves. The USA oil and gas industry has been riding a consolidation wave over the last two years. Last year was one of the most active, where M&A deals worth $250 billion were struck. The momentum has carried over into this year as the stock market continues to boom and as USA oil production scales new records.
Conoco’s all-stock offer equates to $30.33 per Marathon share. The transaction, which includes $5.4 billion of Marathon’s debt, is expected to close in the fourth quarter of 2024. It expects cost savings of $500 million within the first full year after the closing of the transaction. The acquisition adds over 2 billion barrels of reserves to ConocoPhillips’ portfolio.
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. “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 USA unconventional position,” ConocoPhillips CEO Ryan Lance said. ConocoPhillips was the third largest oil and gas producer by volume in the Permian in the first quarter of 2024 after USA majors ExxonMobil and Chevron.
