ConocoPhillips Co. and Marathon Oil Corp. reported May 29 that ConocoPhillips will acquire Marathon Oil in an all-stock transaction for $22.5 billion that includes $5.4 billion of net debt. They’ve agreed that Marathon shareholders will receive 0.2550 shares of ConocoPhillips common stock for each share of Marathon Oil common stock, representing a 14.7% premium to Marathon’s closing share price on May 28 and a 16.0% premium to the prior, 10-day, volume-weighted average price. The deal requires approval by Marathon’s stockholders, regulatory clearance and customary closing conditions, and is expected to close in 4Q24.
“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,” says Ryan Lance, ConocoPhillips chairman and CEO. “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.”
Lee Tillman, chairman, president and CEO at Marathon, adds, “This is a proud moment to look back on what we achieved at Marathon Oil. Powered by our dedicated employees and contractors, we built a top performing portfolio with a multi-year track record of peer-leading operational execution, strong financial results and compelling return of capital to our shareholders—all while holding true to our core values of safety and environmental excellence. ConocoPhillips is the right home to build on that legacy, offering a truly unique combination of added scale, resilience and long-term durability. With its premier global asset base, strong balance sheet and laser focus on operational excellence, ConocoPhillips’ track record of long-term investments, differentiated shareholder distributions and active portfolio management are unmatched. When combined with the global ConocoPhillips portfolio, I’m confident our assets and people will deliver significant shareholder value over the long term.”
ConocoPhillips adds that benefits of the acquisition include:
- Immediately accretive to ConocoPhillips on earnings, cash from operations, free cash flow and return of capital per share to shareholders.
- Delivers cost and capital synergies due to the adjacent nature of the acquired assets and a common operating philosophy. ConocoPhillips expects to achieve $500 million in savings within the first full year after closing from capital efficiencies and reduced general, administrative and operating costs.
- Lower 48 portfolio enhanced by adding complementary acreage to ConocoPhillips’ U.S. onshore portfolio, adding over 2 billion barrels of resource with an estimated average point forward cost of supply of less than $30 per barrel WTI.
