James Myers of OAN
Wednesday, May 29, 2024 8:26 AM
ConocoPhillips agreed on Wednesday to buy Marathon Oil Co. for $17.1 billion in an all-stock deal, adding to the company’s assets at a time of great consolidation across the oil and gas industry.
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The all-stock deal is valued at $22.5 billion, including $5.4 billion in debt.
The move significantly bolsters ConocoPhillips’ assets, adding 2 billion barrels of resources to its U.S. inventory and expanding its presence in key shale gas fields in New Mexico, North Dakota and Texas.
“The acquisition of Marathon Oil deepens our portfolio, fits into our financial framework and adds high-quality, low-cost inventory adjacent to our leading unconventional oil resource positions in the U.S.,” ConocoPhillips CEO Ryan Lance said in a statement.
Companies are rushing to buy up the remaining prime land in the fertile Permian Basin of Texas and New Mexico.
Meanwhile, the deal, which is expected to close in the fourth quarter, still requires approval from Marathon Oil shareholders.
Additionally, the company said that if the Marathon Oil deal goes through and assuming recent commodity prices, ConocoPhillips plans to repurchase more than $7 billion in its stock in the first year, and more than $20 billion in its stock over the first three years.
Additionally, according to the U.S. Energy Information Administration, energy companies will spend $234 billion on mergers and acquisitions with competitors in 2023, the highest figure in more than a decade.
Oil prices have risen more than 12% this year, with the cost of a barrel topping $80 this week.
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