Strengthening its shale holdings, ConocoPhillips agreed on Wednesday to buy Marathon Oil in an all-stock deal valued at $17.1 billion.
“This acquisition of Marathon Oil adds high-quality, low cost of supply inventory adjacent to our leading U.S. unconventional position, further deepening our portfolio and fitting within our financial framework,” stated ConocoPhillips CEO Ryan Lance in a release.
ConocoPhillips’ profitability, cash flow, and shareholder returns would all instantly increase as a result of the purchase, which is anticipated to finalize in the fourth quarter, Lance added. After the merger complete, ConocoPhillips anticipates share buybacks of $7 billion in the first year and $20 billion in the next three.
The portfolio of ConocoPhillips will include 2 billion barrels of resources when Marathon Oil is acquired. Early on after the news, ConocoPhillips’ stock fell 3.3%, while Marathon Oil’s shares increased 7.3%.
During the last year, the U.S. oil sector has seen tremendous consolidation as businesses scramble to acquire profitable property.
The Federal Trade Commission just gave Exxon Mobil the all-clear to acquire Pioneer Natural Resources for $60 billion. Shareholders of Hess Corporation decided on Tuesday to proceed with the $53 billion merger with Chevron.