ConocoPhillips, Marathon Oil to merge

ConocoPhillips plans to acquire Marathon Oil in an all-stock transaction with an enterprise value of US$22.5 billion.

“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.”

Marathon Oil’s holdings.

Marathon Oil is focused on four of the most competitive resource plays in the U.S.: Eagle Ford, Texas; Bakken, North Dakota; Permian in New Mexico and Texas, and STACK and SCOOP in Oklahoma, complemented by an integrated gas business in Equatorial Guinea.

The companies said the acquisition will add highly complementary acreage to ConocoPhillips’ existing U.S. onshore portfolio, adding over 2 billion barrels of resource with an estimated average point forward cost of supply of less than US$30 per barrel WTI.

Given the adjacent nature of the acquired assets and a common operating philosophy, ConocoPhillips said it expects to achieve the full US$500 million of cost and capital synergy run rate within the first full year following the closing of the transaction. The identified savings will come from reduced general and administrative costs, lower operating costs and improved capital efficiencies.

The transaction is subject to the approval of Marathon Oil stockholders, regulatory clearance and other customary closing conditions. The transaction is expected to close in the fourth quarter of 2024.