ConocoPhillips takes over Marathon Oil in $22.5 billion deal



ConocoPhillips is still betting on the production of oil and gas as the company that had its origins in Oklahoma announced Wednesday it is acquiring Marathon Oil Corporation in a more than $22 billion deal.

Now headquartered in Houston, the company describedthe deal as an all-stock transaction with an enterprise value of $22.5 billion, inclusive of $5.4 billion of net debt. Under the transaction, Marathon Oil shareholders will receive 0.2550 shares of ConocoPhillips common stock for each share of Marathon Oil common stock.

“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,” said Ryan Lance, ConocoPhillips chairman and chief executive officer.

“Importantly, we share similar values and cultures with a focus on operating safely and responsibly to create long-term value for our shareholders. The transaction is immediately accretive to earnings, cash flows and distributions per share, and we see significant synergy potential.”

The acquisition only adds to the growing operations of ConocoPhillips in the Permian Basin. It also comes three years after the acquisition of Concho Resources and Shell ENterprises LLC’s positions in the Delaware and Midland Basins. At the same time, ConocoPhillips disposed of its Western Anadarko assets in the Texas Panhandle and Oklahoma.

It was in 2021 when the company also eliminated jobs and closed its Bartlesville Labs. It also ended its Corporate Air Shuttle service out of the city.

The acquisition of Marathon Oil, according to ConocoPhillips will add “highly complementary acreage to the company’s existing U.S. onshore portfolio.” It will reportedly add more than 2 billion barrels of resource with an estimated average point forward ost of supply of less than $30 per barrel WTI.

The announcement stated that ConcoPhillips expects to achieve th full $500 million of cost and capital synergy run rate within the first full year after the closing of the transaction. The company said savings will come from reduced general and administrative costs, lower operating costs and improved capital efficiencies.

Lee Tillman, Marathon Oil chairman, president and chief executive officer called it a proud moment for Marathon Oil.

“ConocoPhillips is the right home to build on that legacy, offering a truly unique combination of added scale, resilience and long-term durability. With its premier global asset base, strong balance sheet and laser focus on operational excellence, ConocoPhillips’ track record of long-term investments, differentiated shareholder distributions and active portfolio management are unmatched.”