ConocoPhillips CEO Ryan Lance said the takeover of Marathon Oil would boost profitability by adding 'high-quality' low-cost assets. Photo: KARIM JAAFAR / AFP/File
The acquisition"further deepens our portfolio and fits within our financial framework, adding high-quality, low cost of supply inventory," ConocoPhillips chairman and chief executive officer Ryan Lance said in a company statement. It will enable ConocoPhillips to strengthen its position in shale oil and gas-rich regions such as the Bakken Basin in the northern United States, the EagleA company presentation highlighted the proximity of Marathon's acreage in these regions to ConocoPhillips' holdings, creating potential economies of scale.
The deal, which is expected to close in the fourth quarter of this year, gives Marathon Oil shareholders 0.255 shares of ConocoPhillips common stock for each share of Marathon Oil common stock.A note from JPMorgan Chase said the takeover solves a challenging outlook for Marathon, which has done"an excellent job in the field" but would have needed to do more"to address inventory renewal over time.