ConocoPhillips to Buy Marathon Oil in $17 Billion All-stock Deal

29 may

ConocoPhillips has agreed to buy Marathon Oil (NYSE:MRO) in an all-stock transaction worth $17 billion, bolstering its shale assets as the broader oil and gas industry undergoes a wave of consolidation. The deal will add 2 billion barrels of resources to ConocoPhillips' inventory in the U.S., extending the company's reach across shale fields in Texas, New Mexico, and North Dakota. ConocoPhillips CEO Ryan Lance said the acquisition further deepens its portfolio and fits within its financial framework, adding high-quality, low-cost of supply inventory adjacent to its leading U.S. unconventional position.

The acquisition follows blockbuster deals announced last fall by its two bigger rivals, Exxon Mobil and Chevron, as the industry undergoes a transformational wave of consolidation. The U.S. oil majors are growing even larger, buying up lucrative oil fields to boost shareholder returns even as governments try to accelerate the transition away from fossil fuels to mitigate climate change.

ConocoPhillips' stock was down 3.3% in early trading following the announcement as Marathon Oil shares surged 8.54%. ConocoPhillips is the third-largest U.S. oil company with a market capitalization of $137 billion, while Marathon Oil (NYSE:MRO) has a market cap of $14.4 billion. ConocoPhillips is the last of the top three U.S. oil companies to pull the trigger on a big acquisition.

Technically, Marathon Oil (NYSE:MRO) stock is in a Bullish trend with the Relative Strength Index (RSI) at 67.06 further accentuating to the bullish campaign is the "Golden Cross" pattern depicted in the daily price chart and the bullish flag pattern. NYSE:MRO's bullish campaign will be validated if the stock bridges the $30 pivot point that move position the RSI at 70.