ConocoPhillips says will acquire Marathon Oil in all-stock deal

Kay Cashman

Petroleum News

On May 29, ConocoPhillips and Marathon Oil Corp. announced they have entered into a definitive agreement pursuant to which ConocoPhillips will acquire Marathon Oil in an all-stock transaction with an enterprise value of $22.5 billion, inclusive of $5.4 billion of net debt.

Under the terms of the agreement, Marathon Oil shareholders will receive 0.2550 shares of ConocoPhillips common stock for each share of Marathon Oil common stock, representing a 14.7% premium to the closing share price of Marathon Oil on May 28, and a 16.0% premium to the prior 10-day volume-weighted average price.

"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 U.S. unconventional position," said Ryan Lance, ConocoPhillips chairman and chief executive officer. "Importantly, we share similar values and cultures with a focus on operating safely and responsibly to create long-term value for our shareholders. The transaction is immediately accretive to earnings, cash flows and distributions per share, and we see significant synergy potential."

"This is a proud moment to look back on what we achieved at Marathon Oil. Powered by our dedicated employees and contractors, we built a top performing portfolio with a multi-year track record of peer-leading operational execution, strong financial results and compelling return of capital to our shareholders -- all while holding true to our core values of safety and environmental excellence. ConocoPhillips is the right home to build on that legacy, offering a truly unique combination of added scale, resilience and long-term durability. With its premier global asset base, strong balance sheet and laser focus on operational excellence, ConocoPhillips' track record of long-term investments, differentiated shareholder distributions and active portfolio management are unmatched. When combined with the global ConocoPhillips portfolio, I'm confident our assets and people will deliver significant shareholder value over the long term" said Lee Tillman, Marathon Oil chairman, president and chief executive officer.

Marathon Oil began operating in Alaska in the 1950s and in 2012, when it sold its assets to Hilcorp, was a major Cook Inlet natural gas producer.

Marathon Petroleum split off from Marathon Oil as a standalone refining, marketing and transportation company in 2011.

Marathon Petroleum is a major player on the Kenai Peninsula, having acquired both the refinery and the mothballed LNG facility in 2018 when it merged with Andeavor, formerly Tesoro.

The merger gave Marathon Petroleum ownership and operatorship of both the Kenai oil refinery and the nearby Kenai LNG plant complex, which includes a dock and loading facility, or terminal.

--KAY CASHMAN