2 of Our 'Most Recognizable Energy Companies' to Combine

ConocoPhillips to acquire Marathon Oil in a deal worth $22.5B, including debt
By Newser Editors and Wire Services
Posted May 29, 2024 9:40 AM CDT
ConocoPhillips to Scoop Up Marathon Oil
A Conoco gas station sign is shown in Glenside, Pennsylvania, on Sept. 29, 2021.   (AP Photo/Matt Rourke, File)

ConocoPhillips is buying Marathon Oil in an all-stock deal valued at approximately $17.1 billion as energy prices rise and big oil companies reap massive profits. The Wall Street Journal calls it a deal "that would combine two of America's most recognizable energy companies." The AP notes the deal is valued at $22.5 billion when including $5.4 billion in debt. Standout details:

  • More on the deal: Marathon Oil shareholders will receive 0.2550 shares of ConocoPhillips common stock for each share of Marathon Oil common stock that they own, the companies said Wednesday. ConocoPhillips said Wednesday that the transaction will add highly desired acreage to its existing US onshore portfolio. The deal is expected to close in the fourth quarter. It still needs approval from Marathon Oil stockholders.
  • The numbers: Marathon Oil has seen five consecutive quarters of falling profits. The Journal reports ConocoPhillips anticipates "a $500 million cost and capital synergy run rate within the first full year of the transaction closing" thanks to reductions in overhead and operating costs and bolstered capital efficiencies.

  • The rise: Crude prices have jumped more than 12% this year, and the cost for a barrel rose above $80 this week. Oil majors put up record profits after Russia's invasion of Ukraine in 2022.
  • The landscape: While those numbers have slipped, there's been a surge in mergers between energy companies flush with cash. Chevron said last year that it was buying Hess in a $53 billion acquisition, though that deal faces headwinds. In July of last year, Exxon Mobil said that it would pay $4.9 billion for Denbury Resources; three months later, Exxon announced the proposed acquisition of shale operator Pioneer Natural Resources for $60 billion.
  • A note for stockholders: Separate from the transaction, ConocoPhillips said it anticipates raising its ordinary dividend by 34% to 78 cents per share starting in the fourth quarter. The company said that once the Marathon Oil deal closes and assuming recent commodity prices, ConocoPhillips plans to buy back more than $7 billion in shares in the first full year. It plans to repurchase more than $20 billion in shares in the first three years.
(More ConocoPhillips stories.)

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