ConocoPhillips to Acquire Marathon Oil in $22.5 Billion Deal

https://www.nytimes.com/2024/05/29/business/dealbook/marathon-oil-conocophillips-deal.html

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ConocoPhillips agreed on Wednesday to acquire its smaller rival, Marathon Oil, the latest deal in a wave of consolidation sweeping the oil industry. The burst of mergers and acquisitions has tracked a robust recovery in commodity prices, with the major players emboldened by record profits and high share prices.

Conoco’s all-stock deal values Marathon at $22.5 billion, including debt. “Marathon has a high-quality asset base with adjacencies to our own assets that will lead to a straightforward integration and meaningful synergies,” Ryan Lance, Conoco’s chief executive, said in a call with analysts.

Marathon’s operations are in some of the most sought-after oil fields in New Mexico, North Dakota and Texas; it also drills offshore of Equatorial Guinea. Many of those positions are near Conoco’s.

Marathon traces its roots to the 19th century, and like ConocoPhillips, its predecessors were once part of John D. Rockefeller’s Standard Oil empire. In 2011, Marathon Oil spun out its refinery business, which now operates as Marathon Petroleum.

The oil industry in the United States, the world’s largest producer of crude, is made up of many small and medium-size oil companies, ranging from family operations with a few wells in one state to global giants like Exxon Mobil. Wall Street values ConocoPhillips at about $140 billion, making it about 10 times as big as Marathon Oil but around a quarter the size of Exxon.

Oil companies have pulled off some of the biggest acquisitions of the past year despite regulatory scrutiny from the Biden administration and volatility in the oil market. The U.S. giants have been harnessing record profits, giving them the firepower to acquire smaller companies with operations in oil-rich regions like the Permian Basin in New Mexico and Texas and in the Gulf of Mexico.