ConocoPhillips Strikes Landmark All-Stock Deal to Acquire Marathon Oil

ConocoPhillips (NYSE: COP) and Marathon Oil Corporation (NYSE: MRO) have announced today that they've reached a definitive agreement. According to the agreement, ConocoPhillips will acquire Marathon Oil in an all-stock transaction valued at $22.5 billion, inclusive of $5.4 billion of net debt. According to the terms, Marathon Oil shareholders will be given 0.2550 shares of ConocoPhillips common stock for every share of Marathon Oil common stock they hold. This represents a 14.7% premium to Marathon Oil's closing share price on May 28, 2024, and a 16.0% premium to the prior 10-day volume-weighted average price.

"This acquisition of Marathon Oil strengthens our portfolio and aligns with our financial strategy, incorporating high-quality, low-cost inventory that complements our prominent U.S. unconventional assets," stated Ryan Lance, Chairman and CEO of ConocoPhillips. " Importantly, we share similar values and corporate cultures, with a focus on safe and responsible operations to create enduring value for our shareholders. The transaction immediately enhances earnings, cash flows, and distributions per share, and we anticipate significant synergy opportunities."

" This is a proud moment for us as we reflect on our accomplishments at Marathon Oil. Fueled by the dedication of our employees and contractors, we cultivated a top-performing portfolio characterized by years of exemplary operational performance, robust financial outcomes, and compelling shareholder returns—all while upholding our core values of safety and environmental excellence. ConocoPhillips provides the ideal platform to build upon this legacy, offering an unparalleled combination of enhanced scale, resilience, and enduring sustainability. With its premier global asset base, robust balance sheet, and unwavering commitment to operational excellence, ConocoPhillips boasts a track record of long-term investments, distinctive shareholder distributions, and proactive portfolio management that is second to none. By integrating our assets and personnel with ConocoPhillips' global portfolio, I am confident that we will deliver significant shareholder value over the long term," said Lee Tillman, Chairman, President, and CEO of Marathon Oil.

Transaction advantages:

Immediate accretion: This acquisition promptly enhances ConocoPhillips' earnings, cash flow from operations, free cash flow, and return of capital per share to shareholders.

Delivers substantial synergies in costs and capital: Leveraging the proximity of the acquired assets and a shared operational approach, ConocoPhillips anticipates achieving the full $500 million synergy run rate within the initial full year post-closing. The identified efficiencies will stem from reduced general and administrative expenses, lowered operating costs, and enhanced capital effectiveness.

Enhances Premier Lower 48 Portfolio: This acquisition strengthens ConocoPhillips' U.S. onshore holdings by adding highly complementary acreage, contributing over 2 billion barrels of resources with an estimated average forward cost of supply under $30 per barrel WTI.

Capital return update:

Irrespective of the transaction, ConocoPhillips anticipates a 34% rise in its regular base dividend to 78 cents per share, commencing in the fourth quarter of 2024. Following the transaction's closure and accounting for current commodity prices, ConocoPhillips intends to:

• Repurchase shares worth more than $7 billion in the initial full year, an increase from the standalone figure of over $5 billion.

• Repurchase shares worth more than $20 billion in the initial three years.