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$22.5 Billion Shake-Up: ConocoPhillips Acquires Marathon Oil and Gains Major Influence in the Eagle Ford

The purchase of Marathon Oil adds 2,600 new drilling spots to ConocoPhillips' operations, boosting their total to over 13,000 across the U.S.

After the deal, ConocoPhillips is set to significantly increase its production in the Eagle Ford region, potentially exceeding its current output in the Delaware basin.

ConocoPhillips announced the acquisition of Marathon Oil for $22.5 billion. This deal comes in a period where the U.S. oil industry has seen massive consolidation, with last year alone witnessing mergers and acquisitions totaling $250 billion. The transaction is slated for completion in the fourth quarter of 2024.

The Houston-based company is poised to become the top producer in the Eagle Ford Shale, targeting an output of 400,000 barrels of oil equivalent per day and planning to upgrade 1,000 wells. Currently, EOG leads the region with 300,000 barrels per day of production.

"We’ve refined our techniques for enhancing old wells in Eagle Ford to match the economics of our top drilling sites, and we'll apply these methods to the Marathon properties."

Andy O’Brien, senior vice president at ConocoPhillips

ConocoPhillips will rank as the third-largest oil producer in the Permian region, just behind industry giants Exxon Mobil and Chevron. This acquisition follows closely behind significant industry deals such as Exxon's purchase of Pioneer Natural Resources and Chevron's $53 billion merger with Hess.

Following the announcement, Marathon Oil’s stock climbed by 8.7%, whereas ConocoPhillips saw a 3% dip. The merger is expected to generate $500 million in cost savings in the first year and augment ConocoPhillips' reserves by over 2 billion barrels.

Marathon Oil brings valuable assets from North Dakota’s Bakken basin, the Permian basin in West Texas, and the Eagle Ford basin in South Texas, enhancing ConocoPhillips’ already strong U.S. presence.

Additionally, ConocoPhillips intends to divest about $2 billion in assets and enhance its share repurchase program. The plan is to increase buybacks to $7 billion next year from the $5 billion scheduled for this year, aiming to buy back $20 billion of its shares in the three years following the merger.

This approach mirrors Devon Energy’s 2022 strategy when it acquired Validus Energy for $1.8 billion, securing 350 new drilling locations and up to 150 high-potential wells for enhancement.

With oil prices staying high, big oil companies are making huge profits. They're using this money to buy more assets in the Permian Basin, which has made the U.S. a top oil and gas producer.

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Ovintiv, Occidental, BP, Marathon Oil, ConocoPhillips, TC ENERGY Q1 Results and Sale of $1 Billion Permian Assets

As TC Energy expands its gas network to support the growing demand from data centers, driven by AI, Occidental is considering selling assets in the Permian Basin potentially worth over $1 billion. Keep reading. But first, let’s take a look at the Q1 2024 results for big names like Occidental (OXY), Ovintiv, BP, Marathon Oil, ConocoPhillips, and TC Energy.

Rystad Energy predicts that the merged company of Diamondback Energy and Endeavor Energy will produce 819,500 barrels of oil per day in the Permian Basin in 2024. Rystad, an energy research and business intelligence company from Norway, expects the ExxonMobil-Pioneer Natural Resources merger to lead the Permian in total net production for the year, with a projection of nearly 1.4 million barrels per day. Notably, about 53% of this production will be oil. Chevron is set to produce slightly more than Diamondback-Endeavor, with Occidental-CrownRock following closely. ConocoPhillips ranks fifth, with a production forecast of just under 800,000 barrels per day. Chevron's production is 47% oil, while Diamondback-Endeavor and ConocoPhillips have 57% oil in their mix, and Occidental-CrownRock is just below 50%.

Texas is taking bold steps toward a future powered by clean energy. Once known mainly for its oil and gas, the state is now a leader in wind, solar, and battery storage. But as electricity demand grows, so do the challenges of balancing energy needs with infrastructure limits. Here’s a look at how Texas is transforming and what hurdles lie ahead + find out who works with Facebook’s parent company Meta on new technology across the U.S.

Power Plants: 124955 MW Solar: 63726 MW Wind: 2204 MW Biodisel Plants: 1.5 Mmgal/yr capacity Source: Rextag Energy DataLink

The future once seemed optimistic for America’s climate ambitions, with rapid growth in renewable energy propelling the nation toward a cleaner, more sustainable future. However, a sobering reality has begun to sink in: despite some progress, the transition from fossil fuels is slowing down, and global emissions continue to rise.

2024 blog posts