Live Chat

Mara

ConocoPhillips announced on Wednesday an all-stock acquisition of Marathon Oil, valuing the company at $17.5 billion.

This deal, anticipated to be one of the final major consolidations in the industry, will expand ConocoPhillips’s presence in the shale basin and offer a 14.7% premium to Marathon Oil shareholders based on their May 28 closing price.

ConocoPhillips claimed that the acquisition will be immediately accretive to earnings, cash flows, and returns of capital per share. The enterprise value of the deal, including debt, is $22.5 billion, according to a press release put out by the oil major.

ConocoPhillips CEO Ryan Lance commented on the deal:

“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”.

The market had been expecting the deal after the Financial Times reported advanced talks between the two companies earlier on Wednesday. Following the announcement, Marathon Oil shares ended the session with an 8.43% gain at the $28.68 mark, while ConocoPhillips stock fell 3.12% to $115.25.

ConocoPhillips stock has notably gained close to 19% year-to-date, spurred by higher oil prices on the back of geopolitical uncertainty.

Choose your points of movement

Сalculate your hypothetical P/L (aggregated cost and charges) if you had opened a trade today.

Market

Shares Search
Shares
Index
Commodity
Bonds
Crypto
ETFs
Currency

Instrument

Search
Clear input
Occidental
Prosus N.V.
Porsche AG
Hermes
CAT
Thermo Fisher
Nikola Corporation
Tilray
Shell plc (LSE)
Skillz Inc
Iberdrola
DeltaAir
CrowdStrike Holdings
Golar LNG
Applied Materials
Snowflake
Royal Bank Canada
Amazon.com
Spotify
Exxon Mobil
CCB (Asia)
McDonald's
Campari
GameStop
Netflix
ON Semiconductor
Costco
Dave & Buster's
Delivery Hero SE
LUCID
Continental
Zoom Video Communications
Schlumberger
Virgin Galactic
Upwork Inc.
Cameco
JP Morgan
Fuelcell
Rivian Automotive
XPeng Inc
Wal-Mart Stores
Trade Desk
Blackstone
Vodafone
Aptiv PLC
L'Oreal
Target
Rio Tinto
Sartorius AG
British American Tobacco
Qorvo
ASOS
Cisco Systems
Nel ASA
Arista
Airbus
Apple
Pfizer
AMC Entertainment Holdings
ASML
Hubspot
Teladoc
Starbucks
SMCI
Canopy Growth
Wish.com Inc
Lockheed Martin
ProSiebenSat.1
IAG
AbbVie
Marston's
Baidu
Teleperformance
Norwegian Air Shuttle
Airbus Group SE
HSBC HK
Block
Annaly Capital
Abbott
LVMH
American Express
Novavax
GoPro
Siemens
Total
SIG
Pinterest Inc
Taiwan Semi
Etsy
Amgen
SONY
3D Systems
UPS
BlackBerry
Gen Digital Inc
Xiaomi
Quanta Services
Unity Software
NVIDIA
Anglo American
Palantir Technologies Inc
Fresnillo
Deere
Rolls-Royce
Porsche
Uber
Vir Biotechnology
American Airlines
ROBLOX Corp
Macy's
FirstRand
easyJet
DISNEY
Aurora Cannabis Inc
BP
Adidas
Boeing Co
Vonovia
Coca-Cola Co (NYSE)
Home Depot
General Electric
Coinbase Inc
ALIBABA HK
Philip Morris
General Motors
PayPal
UniCredit
II-VI
BASF
Kraft Heinz
Alphabet (Google)
Palo Alto Networks
Plug Power
Li Auto
Oracle
Roku Inc
UiPath Inc
Upstart Holdings Inc
F5 Networks
Infinera
Inditex
ZIM Integrated Shipping Services Ltd
Deutsche Bank
Hammerson
IBM
JD.com
Barrick Gold
Lemonade
MerckCo USA
Infosys
Invesco Mortgage
Comcast
Santander
Accenture
Anheuser-Busch Inbev
Visa
Mastercard
T-Mobile
SAP
Wayfair
Beyond Meat
Kuaishou
CarMax
Tesla
Lyft
Medtronic
Adobe
Morgan Stanley
Workday Inc
Blackrock
Vipshop
Meta (Formerly Facebook)
Linde PLC
Micron
Lululemon
Ceconomy
Chipotle
Gilead
Naspers
Bristol Myers
The Cheesecake Factory
Glencore plc
British American Tobacco
ChargePoint Holdings Inc
Twilio
Intel
Lloyds
CNOOC
Electrolux
Wells Fargo
Sea
PG&E
Fedex
Citigroup
Peloton Interactive Inc.
eBay
Microsoft
JnJ
Bilibili Inc
Trump Media & Technology Group
AIA
Nasdaq
Air France-KLM
Allianz
Lithium Americas Corp
Procter & Gamble
Qualcomm
AMD
New Oriental
MercadoLibre.com
Mondelez
Lumentum Holdings
Two Harbors Investment aration
AstraZeneca
Norwegian Cruise Line
Unilever
GoHealth
PepsiCo
Barclays
PETROCHINA
Goldman Sachs
Eli Lilly
HSBC
Cellnex
Berkshire Hathaway
Jumia Technologies
HDFC Bank
RTX Corp
Bayer
Bank of America
Chevron
ADT
DoorDash
Marriott
Nike
AT&T
GSX Techedu
Robinhood
Telecom Italia
Deliveroo Holdings
TUI
Freeport McMoRan
Toyota
BioNTech
Airbnb Inc
Alibaba
Verizon
Nio
Eni
Ford
Volkswagen
UnitedHealth
Shopify
China Life
Snap
Christian Dior
Conoco Phillips
Lufthansa
Tencent
Moderna Inc
Salesforce.com
Broadcom
Diageo
Toro
Cinemark

Account Type

Direction

Quantity

Amount must be equal or higher than

Amount should be less than

Amount should be a multiple of the minimum lots increment

USD Down
$-

Value

$-

Commission

$-

Spread

-

Leverage

-

Conversion Fee

$-

Required Margin

$-

Overnight Swaps

$-
Start Trading

Past performance is not a reliable indicator of future results.

All positions on instruments denominated in a currency that is different from your account currency, will be subject to a conversion fee at the position exit as well.

Market expert says ConocoPhillips-Marathon deal will be last energy tie-up after pandemic

Danilo Onorino, portfolio manager at Swiss-based Dogma Renovatio Equity Fund, had been predicting significant oil deals since 2020. He remarked that this merger would likely be the last major tie-up post-COVID:

“The consolidation comes after the COVID period [...] that was the final ignition of the energy transition. From now on, the energy transition will be more and more prevalent, therefore the oil and gas industry needs to consolidate even more.”

This acquisition follows a busy period for the sector, which included Exxon Mobil’s $60 billion takeover of Pioneer Natural Resources and Hess shareholders recently approving a $53 billion buyout by Chevron. Occidental Petroleum also agreed to buy U.S. shale-oil producer CrownRock for $12 billion.

The Permian basin, an oil-rich region in the southern United States, witnessed a historic surge in the value of U.S. oil and gas mergers and acquisitions last year, totaling $100 billion.

ConocoPhillips stock slips on news of $22.5 billion buyout of Marathon Oil

Analysts say ConocoPhillips deal driven by cost optimisation, synergies

MarketWatch cited Citigroup analysts led by Alastair Syme as saying that the ConocoPhillips-Marathon deal "feels a little different” in its ambitions compared to other recent consolidations:

“While others have targeted inventory and growth, this transaction looks largely based around optimisation of cost and approach in the Eagle Ford and Bakken shales, maturing assets for both companies”.

Given Marathon Oil’s “lower levels of re-investment — a more mature business — the free cashflow uplift is considerable, allowing the transaction to be sweetened with a higher base dividend and more buybacks,” Syme said.

MarketWatch also cited Benchmark analyst Subash Chandra as praising the merger:

“The two companies are a good fit, merging two of the best return-of-capital frameworks, complementary acreage in the Eagle Ford/Bakken/Delaware and delivering $500 million of annual synergies”.

ConocoPhillips also announced plans to increase its base dividend by 34% to 78 cents per share starting in the fourth quarter of 2024. Post-acquisition, the company intends to buy back $20 billion in shares over the first three years, with over $7 billion in the first year alone, assuming recent commodity prices.

U.S. crude prices have risen over 10% this year, driven by geopolitical tensions, expectations of stronger demand, and voluntary output cuts by the OPEC+ cartel and its allies, primarily driven by Saudi Arabia and Russia.

At the time of writing on Thursday, May 30, the continuous futures contract for international oil benchmark Brent crude traded at $82.83, down over 0.7% on the day. Brent crude remains up by close to 8% year-to-date. A similar contract for West Texas Intermediate, the U.S. oil benchmark, was also down 0.7% at $78.69 on the ICE Futures Europe exchange. WTI is up 10% year-to-date.


When considering shares, indices, forex (foreign exchange) and commodities for trading and price predictions, remember that trading CFDs involves a significant degree of risk and could result in capital loss.

Past performance is not indicative of any future results. This information is provided for informative purposes only and should not be construed to be investment advice.

Latest news

Wednesday, 6 November 2024

Indices

U.S. presidential election market volatility drives Bitcoin prices to reach a historic high

Stock market rally

Tuesday, 5 November 2024

Indices

US Election Results Trigger Stock Gains Across Europe, Asia, and US

US Election Trump's victory

Tuesday, 5 November 2024

Indices

Trump Victory Spurs Market Gains and Economic Shift Expectations

Tuesday, 5 November 2024

Indices

US election: bitcoin price (BTC) surged to new record as Trump leading ahead

Live Chat