ConocoPhillips has completed its acquisition of Marathon Oil Corporation, a $22.5 billion all-stock transaction that significantly enhances its U.S. onshore portfolio. The deal, finalized on November 22, 2024, includes the assumption of $5.4 billion in net debt.

Marathon Oil shareholders received 0.255 shares of ConocoPhillips common stock for each share held, representing a 14.7% premium to Marathon Oil's closing share price on May 28, 2024. The acquisition adds over 2 billion barrels of low-cost supply resources to ConocoPhillips' assets, particularly in the Eagle Ford, Bakken, and Scoop Stack basins. The company anticipates achieving at least $1 billion in run-rate cost and capital savings within the first year post-closure, primarily from reduced general and administrative costs, lower operating expenses, and improved capital efficiencies.

"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 of ConocoPhillips.

The consolidation reflects a broader trend in the U.S. shale industry, where major companies are merging to achieve greater scale and efficiency. In 2023, the industry saw a $250 billion buying spree, with companies like Exxon Mobil, Chevron, and Occidental Petroleum making substantial acquisitions. This trend continued into 2024, with the ConocoPhillips-Marathon Oil deal being a notable example.

The acquisition positions ConocoPhillips as the largest operator in the Eagle Ford, with approximately 400,000 barrels of oil equivalent per day of gross operated production. The company also plans to increase its ordinary base dividend by 34% to 78 cents per share starting in the fourth quarter of 2024. Additionally, ConocoPhillips intends to repurchase over $7 billion in shares in the first full year following the transaction and over $20 billion in shares in the first three years.

However, the consolidation in the shale industry has led to concerns about job losses and reduced competition. Following the acquisition, more than 500 employees at Marathon Oil's Houston headquarters were expected to be laid off within 12 months. Additionally, the concentration of assets among fewer companies may impact pricing dynamics and influence the broader energy market.

The acquisition was announced on May 29, 2024, and closed on November 22, 2024, following a review by the Federal Trade Commission. ConocoPhillips, headquartered in Houston, Texas, is one of the world's largest independent exploration and production companies, focusing on oil and natural gas. Marathon Oil Corporation, also based in Houston, is a leading exploration and production company with significant operations in U.S. shale plays.

The completion of this acquisition marks a significant milestone for ConocoPhillips, enhancing its position in the U.S. shale industry and reflecting the ongoing consolidation trend among major oil companies seeking scale and efficiency in a competitive market.