ConocoPhillips Completes Marathon Oil Acquisition, Consolidating US Energy Portfolio

Marathon Oil US5658491064

The independent chapter for Marathon Oil has closed. The company has been formally delisted from the New York Stock Exchange following the finalization of its acquisition by ConocoPhillips, a deal that transforms it into a wholly-owned subsidiary. This strategic consolidation marks a significant shift in the landscape of the North American energy sector.

The merger, initially announced in May, was officially completed in late November. Under the terms of the agreement, ConocoPhillips has assumed full ownership of Marathon Oil. Shareholders of the acquired company received 0.2550 shares of ConocoPhillips stock for each share of Marathon Oil they held. The total enterprise value of the transaction is placed at $22.5 billion.

This figure includes the assumption of Marathon Oil's net debt, which amounted to $5.4 billion. The acquisition is a prominent example of the ongoing consolidation wave within the U.S. energy industry, where larger entities are seeking to optimize their portfolios and capture greater operational efficiencies through strategic purchases.

Enhancing Scale in Key US Basins

A primary driver behind this move is the substantial enhancement of ConocoPhillips's asset base in several prolific American oil regions. The integration grants ConocoPhillips significant reserves and production capabilities in the Eagle Ford and Bakken shale plays, as well as in the Permian Basin of New Mexico.

Company leadership anticipates considerable synergy benefits from combining the operations. Management projects that cost and capital synergies will reach approximately $500 million within the first full year following the integration. The newly acquired assets are expected to contribute immediately to ConocoPhillips's earnings and cash flow per share.

A Strong Foundation for Integration

Marathon Oil entered the merger from a position of operational strength. Its most recent quarterly performance, for Q3 2024, exceeded the company's own forecasts. Production averaged 207,000 barrels of oil equivalent per day during the period. On an adjusted basis, net income was reported at $360 million, or $0.64 per share.

For former Marathon Oil investors, their holding has now transitioned into a stake in one of the world's leading independent exploration and production companies. Market attention will now turn to ConocoPhillips's upcoming quarterly reports, which will provide insights into the progress of the integration process and the realization of the targeted financial synergies.