ConocoPhillips to buy Marathon Oil in $17 billion deal
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Oil giant ConocoPhillips is acquiring the big producer Marathon Oil in a $17 billion all-stock deal (it's $22.5 billion including debt).
Why it matters: It's the latest domino to fall in the rapid consolidation of large U.S.-based players.
- Companies are scrambling to snap up the remaining prime acreage in the prolific Permian Basin in Texas and New Mexico, as well as other shale plays.
- 2023 brought more than $190 billion in upstream deals, per Enverus Intelligence Research, and tie-ups are continuing this year.
The big picture: The Marathon deal will add "high-quality, low cost of supply inventory adjacent to our leading U.S. unconventional position," ConocoPhillips CEO Ryan Lance said in a statement.
- ConocoPhillips expects the merger to achieve $500 million in synergies within a year of closing.
- It would add more than 2 billion barrels to ConocoPhillips' Lower-48 resource base, the announcement states.
- Marathon has production in Texas, New Mexico, North Dakota and Oklahoma, as well as gas assets in Equatorial Guinea.
Catch up quick: U.S. production is getting concentrated in fewer hands, though there's still a wide diversity of players.
- Exxon Mobil recently acquired Pioneer Natural Resources, Occidental Petroleum is purchasing CrownRock, and Diamondback Energy said in February it's buying Endeavor Energy Resources.
- Meanwhile, Chevron is trying to buy Hess, but that's snagged in a dispute over Hess' stake in a huge, Exxon-run project off Guyana.
What we're watching: The Federal Trade Commission's stance on the deal as Capitol Hill Democrats press the regulator to consider thwarting the merger wave.
