ConocoPhillips announced Wednesday that it is purchasing Marathon Oil in an all-stock $2.25 billion deal that includes around $5.4 billion of debt. After the news broke, Marathon shares grew more than 10% in premarket trade, while Conoco’s dropped by around 2%.
Marathon shareholders will get 0.255 ConocoPhillips shares per Marathon shared owned, equal to a 14.7% premium of Tuesday’s closing price. ConocoPhillip’s CEO Ryan Lance said in a statement that acquiring Marathon Oil “deepens our portfolio and fits within our financial framework, adding high-quality, low cost of supply inventory.”
After years of elevated oil prices—and the resulting profits—big companies are using their cash to purchase assets in the Permian basin, which is the oil field that has catapulted America to the top as a producer of gas and oil. ExxonMobile recently purchased Pioneer for $60 billion, while Chevron acquired Hess in a $53 deal.
