ConocoPhillips, Marathon Oil get second US FTC request over $22.5 billion deal

[July 12, 2024]  (Reuters) - Top U.S. independent oil producer ConocoPhillips said on Friday it received a second request from the U.S. Federal Trade Commission for information on its proposed acquisition of rival Marathon Oil.   

The logo of American oil and natural gas exploration and production company ConocoPhillips is seen during the LNG 2023 energy trade show in Vancouver, British Columbia, Canada, July 12, 2023. REUTERS/Chris Helgren

ConocoPhillips said both companies received the requests on July 11 and are working with the FTC to review the merger.

CONTEXT

Conoco said in May it would pay $22.5 billion in stock for Marathon Oil to boost its output and achieve greater economies of scale in U.S. shale fields and in liquefied natural gas.

Its deal followed Exxon Mobil's $60 billion acquisition of Pioneer Natural Resources, Chevron's proposed $53 billion merger with Hess, Chesapeake Energy's $7.4 billion purchase of Southwestern Energy and Occidental Petroleum's $12 billion bid for CrownRock.

WHY IT'S IMPORTANT

The request for additional information is likely to slow the closing of the deal. ConocoPhillips had said in May a "conservative" estimate of when the deal will close is the fourth quarter of this year, putting off a full realization of the expected cost savings and benefits from shared equipment and staff. It reiterated the timeframe on Friday.

The two companies have operations in West Texas, South Texas and North Dakota's shale fields.

BY THE NUMBERS

The Conoco-Marathon combination would create a company pumping 2.26 million barrels of oil and gas per day, and add 1.32 billion barrels of proved reserves to ConocoPhillips' 6.8 billion.

The offer of 0.255 shares of ConocoPhillips for each share of Marathon represented a 14.7% premium to the company's pre-deal closing price.

(Reporting by Gary McWilliams and Sourasis Bose; Editing by Krishna Chandra Eluri)

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