Marathon Oil Acquired by ConocoPhillips for $22.5B in Major Energy Sector Consolidation

ConocoPhillips (COP) has announced its acquisition of Marathon Oil (MRO) in an all-stock deal valued at $17.1 billion, marking a significant consolidation in the energy sector. Under the agreement, Marathon Oil shareholders will receive 0.255 shares of ConocoPhillips for each share they hold, representing a nearly 15% premium based on Marathon Oil’s closing price. This acquisition allows ConocoPhillips to expand its footprint in key U.S. shale basins, including Texas and North Dakota. Marathon Oil shares surged 8.4% following the announcement, closing at $28.68, while ConocoPhillips shares fell 3.1% to $115.25. The deal will enhance ConocoPhillips' presence in the Eagle Ford, Bakken, and Permian basins, and bolster its international operations with Marathon Oil’s offshore assets in Equatorial Guinea. ConocoPhillips CEO Ryan Lance highlighted the strategic fit and technological synergies as key drivers for the acquisition, emphasizing the potential to extend Marathon’s shale inventory. Market Overview:

• ConocoPhillips acquires Marathon Oil in a $17.1 billion all-stock deal.
• The acquisition expands ConocoPhillips' presence in key U.S. shale basins and strengthens its international assets.
• Marathon Oil shareholders to receive a 15% premium based on the company’s closing share price.

Key Points:

• Marathon Oil shares rose 8.4%, while ConocoPhillips shares fell 3.1% following the announcement.
• The acquisition includes Marathon’s assets in Texas, North Dakota, and Equatorial Guinea.
• ConocoPhillips expects to achieve $500 million in cost and capital synergies within the first year post-closing.

Looking Ahead:

• The deal is expected to close in the fourth quarter, pending regulatory and shareholder approval.
• ConocoPhillips plans to leverage technology and efficiencies to maximize the value of Marathon’s shale assets.
• Investors will monitor the integration of Marathon’s assets and the realization of anticipated synergies.

The transaction, expected to close in the fourth quarter, is subject to regulatory and shareholder approval. This acquisition marks ConocoPhillips’ largest U.S. deal since its purchase of Shell’s Permian assets in 2021 for $9.5 billion. ConocoPhillips aims to achieve $500 million in cost and capital synergies within the first year of the transaction. The acquisition signifies a strategic move to bolster ConocoPhillips’ shale assets amid an industry-wide push for consolidation. The deal reflects ConocoPhillips' ongoing efforts to expand its oil and gas portfolio, following previous acquisitions of Permian producer Concho Resources and Shell’s Permian assets. Marathon Oil’s extensive history and significant shale production capacity make it a valuable addition to ConocoPhillips’ growing portfolio, positioning the company for enhanced operational efficiency and increased production capacity in the coming years.