ConocoPhillips made a big move yesterday by agreeing to snag Marathon Oil in a whopping $22.5 billion deal. It’s just the latest a string of huge mergers sweeping through the oil and gas realm as companies strive to beef up their reserves.
The oil and gas scene in the U.S. has been all about merging and consolidating lately. Last year alone saw M&A deals totaling a massive $250 billion – now that’s some serious changing hands! And with this year kicking off on the same note, it seems like these companies just can’t get enough of joining forces, especially with the stock market booming and American oil production hitting new highs.
Conoco’s offer is all about stocks, coming in at $30.33 per Marathon share – a sweet 15% premium based on Tuesday’s stock numbers, according to Reuters math whizzes. With Marathon also carrying around $5.4 billion in debt, this whole shindig is set to wrap up shop sometime next year right before Thanksgiving.
Marathon Oil stocks shot up by 8.7%, while Conoco took a slight dip of 3% during early trading hours – quite the rollercoaster ride for both outfits! On top of that, Conoco expects to save a cool half-billion bucks within one spin around the sun after sealing the deal. And hey, let’s not forget those over 2 billion barrels of juicy reserves they’re adding to their collection.
Marathon Oil isn’t just any old Joe Schmoe either; they’ve got their fingers dipped into some pretty lucrative pies like Bakken basin out in North Dakota or cruising down to Eagle Ford basin in South Texas—hot spots for anyone trying to level up big time.
But wait – there’s more! Guess who came out as number three champ of oil and gas production in Permian during Q1 2024? None other than ConocoPhillips itself right behind Exxon Mobil and Chevron – talk about rubbing shoulders with giants!
This dance between big names doesn’t stop here: Exxon swooped up Pioneer Natural Resources last fall while Chevron cozied up to Hess for an eye-popping $53 billion merger that got sealed just yesterday.
Oh boy…all these buyouts have gotten Uncle Sam rowdy though; Federal Trade Commission is eyeing down those mega deals from Chevron, Diamondback Energy, Occidental Petroleum, you name it—they’re under scrutiny!
Viktor Katona over at Kpler mentioned something spicy: once this merger kicks off full throttle, Conoco’s production from Eagle Ford will be leaving its old pals over at Delaware Basin eating dust.
Talking money matters now: Conoco plans on tossing almost $2 billion worth of assets outta here while pouring an extra sprinkle on share buybacks – think jumping from $5 billion this year all the way up to $7 billion next year! And hey guess what? They’ll even go gung-ho buying back shares worth $20 billion over three years post-merger closure – phew!
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