ConocoPhillips has agreed to acquire Marathon Oil in a $22.5 billion deal, aiming to increase scale, cash flow, and earnings while diversifying its exposure in several U.S. shale basins.
The U.S. oil industry saw its latest announcement of a big merger this week after ConocoPhillips said it had agreed to buy Marathon Oil in an all-stock deal with an enterprise value of $22.5 billion, inclusive of $5.4 billion of net debt. The rationale behind the latest deal in the shale patch is slightly different from those of the previously announced transactions. But just as in earlier M&A agreements, the latest acquisition also bets on scaling up drilling inventory for the long term.
oil firms prefer to use their increased market valuation to buy rivals or smaller companies in all-stock deals, which immediately add developed and operational wells to inventory without the buyers sinking more money to drill new wells from scratch.
Oil Prices Permian Basin Cash Flow Shale Mega-Merger
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