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ConocoPhillips buying Marathon Oil in deal valued at 22.5 billion dollars

The deal is expected to close in the fourth quarter.

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A Phillips 66 Conoco fuel service station (Alamy/PA)

ConocoPhillips is buying Marathon Oil in an all-stock deal valued at approximately 17.1 billion dollars (£13.4 billion).

The deal is valued at 22.5 billion dollars (£17.6 billion) when including 5.4 billion dollars (£4.2 billion) in debt.

Crude prices have jumped more than 12% this year and the cost for a barrel rose above 80 dollars this week.

As part of the transaction, Marathon Oil shareholders will receive 0.2550 shares of ConocoPhillips common stock for each share of Marathon Oil common stock that they own, the companies said.

ConocoPhillips said the transaction will add highly complementary acreage to its existing US onshore portfolio.

“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 US unconventional position,” ConocoPhillips chairman and chief executive Ryan Lance said in a prepared statement.

The deal is expected to close in the fourth quarter.

It still needs approval from Marathon Oil stockholders.

Separate from the transaction, ConocoPhillips said that it anticipates raising its ordinary dividend by 34% to 78 cents per share starting in the fourth quarter.

The company said that once the Marathon Oil deal closes and assuming recent commodity prices, ConocoPhillips plans to buy back more than seven billion dollars (£5.5 billion) in shares in the first full year.

It plans to repurchase more than 20 billion dollars (£15.7 billion) in shares in the first three years.

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