The combination of ConocoPhillips and Marathon Oil Corp. will create a significantly larger super-independent oil and gas producer with a substantial footprint across the Lower 48 states.
This all-stock deal, valued at $17.1 billion ($22.5 billion including Marathon’s net debt), merges two historically significant companies that originated from the breakup of Standard Oil in 1911.
Key Details of the Merger
- Deal Overview: ConocoPhillips’ market value is over $155 billion, making it one of the largest U.S. oil and gas producers. Marathon Oil adds its multi-basin portfolio, particularly strengthening ConocoPhillips’ presence in the Eagle Ford, Bakken, Delaware Basin, and Anadarko Basin.
- Strategic Fit: The acquisition enhances ConocoPhillips’ asset base with approximately 490,000 net acres and a production of nearly 400,000 barrels of oil equivalent per day (boe/d) in the Eagle Ford alone. The deal is expected to yield new drilling opportunities and significant future upside from refracking techniques.
- Eagle Ford Shale: Marathon’s assets add about 1,000 new primary drilling locations and expand ConocoPhillips’ inventory for future drilling and refrac projects.
- Bakken: The merger creates a highly contiguous footprint in the southern Bakken, offering over a decade of drilling inventory and potential for three-mile lateral wells.
- Permian Basin: Marathon’s acreage in the Delaware Basin, particularly in Lea and Eddy counties in New Mexico, complements ConocoPhillips’ larger Midland Basin position. The combined entity will have 800,000 net Delaware acres with a production average of 580,000 boe/d.
- Anadarko Basin: This primarily gas-focused basin offers a strategic option on U.S. gas market normalization, driven by increasing demand from power generation and LNG exports.
Potential Regulatory Scrutiny
Given the size and scope of the deal, there is potential for antitrust scrutiny by the U.S. Federal Trade Commission (FTC). The FTC has been particularly active in examining high-profile oil and gas mergers to ensure compliance with antitrust laws.
Market Impact
This merger positions ConocoPhillips as a premier operator in several key U.S. basins, with a diverse and extensive portfolio. It joins the ranks of other super-independents like EOG Resources and Occidental Petroleum, enhancing its competitiveness and operational efficiency across multiple regions.
