ConocoPhillips is buying Marathon Oil in a stock deal worth about $17.1 billion as energy prices rise and major oil companies post huge profits.
The deal is valued at $22.5 billion, including $5.4 billion in debt.
Crude oil prices have risen more than 12% this year, with the cost of a barrel rising above $80 this week.
As part of the transaction, Marathon Oil shareholders will receive 0.2550 shares of ConocoPhillips common stock for each share of Marathon Oil common stock they own, the companies said Wednesday.
ConocoPhillips said Wednesday that the transaction will add highly desirable acreage to its existing U.S. onshore portfolio.
“This acquisition of Marathon Oil further deepens our portfolio and fits within our financial framework, adding high-quality inventory at low delivery costs, adjacent to our leading U.S. unconventional position,” ConocoPhillips Chairman and CEO Ryan Lance said in a prepared statement.
The deal is expected to close in the fourth quarter. It still needs approval from Marathon Oil shareholders.
Separately from the transaction, ConocoPhillips said it expects to increase its regular dividend 34% to 78 cents per share starting in the fourth quarter. The company said that once the Marathon Oil deal closes and based on recent commodity prices, ConocoPhillips plans to repurchase more than $7 billion of shares in the first full year. It plans to buy back more than $20 billion worth of shares in the first three years.
