Released November 26, 2024 | SUGAR LAND
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Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--After clearing regulatory hurdles, and finishing off a year of big mergers, Marathon Oil (Houston, Texas) is now a subsidiary of ConocoPhillips (NYSE:COP) (Houston), the companies announced Friday.
ConocoPhillips announced plans in May to acquire Marathon Oil in an all-stock transaction valued at $22.5 billion, including debt. Both companies are among the largest of their kind, and the merger survived extra scrutiny from the Federal Trade Commission in July.
"This acquisition of Marathon Oil is a perfect fit for ConocoPhillips, adding to our deep, durable and diverse portfolio while meeting our strict financial framework," said Ryan Lance, chairman and chief executive officer.
Marathon Oil's assets include pipeline and production centers in the Wyoming Basin, the Bakken in North Dakota and the Eagle Ford Shale is Texas. Closing the deal makes ConocoPhillips one of the largest stakeholders in the Bakken and the Eagle Ford.
ConocoPhillips reported third-quarter production reached 1.9 million barrels of oil equivalent per day (Boe/d), a 3% increase from year-ago levels. The bulk of production came from the shale basins in the Lower 48 U.S. states. About 40% of the company's total oil-equivalent production came from the Permian, with the rest spread out largely over the Eagle Ford and Bakken formations.
Marathon, for its part, was focusing largely on natural gas in its U.S. shale portfolio. Its gas-processing capacity in the Permian alone was expected to reach 1.4 billion cubic feet per day during the second half of 2025.
As with many of its peers, both companies reported a decline in net income during the third quarter, due in part to weaker commodity prices. For Marathon, third-quarter net income of $622 million compared with year-ago levels of $3.3 billion.
Closing the deal marks something of a conclusion of a busy year for mergers and acquisitions in the energy sector. Crescent Energy (NYSE:CRGY) (Houston, Texas) this year paid $2.1 billion to acquire SilverBow Resources, creating one of the largest operators in the Eagle Ford in the process.
Elsewhere, Chevron Corporation (NYSE:CVX) (San Ramon, California) forked over $53 billion for Hess Corporation (NYSE:HES) (New York, New York), which resulted in Chevron claiming a stake in the Bakken and in the emerging oil wealth coming from offshore Guyana.
With the Marathon Oil deal completed, meanwhile, ConocoPhillips is on track to reach $11.5 billion in capital expenditures this year, compared with $11.2 billion in 2023. For the combination of ConocoPhillips and Marathon Oil, spending could be around $13 billion for 2025.
But it's not all good news. Marathon was expected to lay off 500 employees in Texas as a result of the merger with ConocoPhillips. Trading on the New York Stock Exchange, shares in ConocoPhillips were flat early in the Monday session.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
ConocoPhillips announced plans in May to acquire Marathon Oil in an all-stock transaction valued at $22.5 billion, including debt. Both companies are among the largest of their kind, and the merger survived extra scrutiny from the Federal Trade Commission in July.
"This acquisition of Marathon Oil is a perfect fit for ConocoPhillips, adding to our deep, durable and diverse portfolio while meeting our strict financial framework," said Ryan Lance, chairman and chief executive officer.
Marathon Oil's assets include pipeline and production centers in the Wyoming Basin, the Bakken in North Dakota and the Eagle Ford Shale is Texas. Closing the deal makes ConocoPhillips one of the largest stakeholders in the Bakken and the Eagle Ford.
ConocoPhillips reported third-quarter production reached 1.9 million barrels of oil equivalent per day (Boe/d), a 3% increase from year-ago levels. The bulk of production came from the shale basins in the Lower 48 U.S. states. About 40% of the company's total oil-equivalent production came from the Permian, with the rest spread out largely over the Eagle Ford and Bakken formations.
Marathon, for its part, was focusing largely on natural gas in its U.S. shale portfolio. Its gas-processing capacity in the Permian alone was expected to reach 1.4 billion cubic feet per day during the second half of 2025.
As with many of its peers, both companies reported a decline in net income during the third quarter, due in part to weaker commodity prices. For Marathon, third-quarter net income of $622 million compared with year-ago levels of $3.3 billion.
Closing the deal marks something of a conclusion of a busy year for mergers and acquisitions in the energy sector. Crescent Energy (NYSE:CRGY) (Houston, Texas) this year paid $2.1 billion to acquire SilverBow Resources, creating one of the largest operators in the Eagle Ford in the process.
Elsewhere, Chevron Corporation (NYSE:CVX) (San Ramon, California) forked over $53 billion for Hess Corporation (NYSE:HES) (New York, New York), which resulted in Chevron claiming a stake in the Bakken and in the emerging oil wealth coming from offshore Guyana.
With the Marathon Oil deal completed, meanwhile, ConocoPhillips is on track to reach $11.5 billion in capital expenditures this year, compared with $11.2 billion in 2023. For the combination of ConocoPhillips and Marathon Oil, spending could be around $13 billion for 2025.
But it's not all good news. Marathon was expected to lay off 500 employees in Texas as a result of the merger with ConocoPhillips. Trading on the New York Stock Exchange, shares in ConocoPhillips were flat early in the Monday session.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
