Conocophillips (COP.US), the largest independent oil producer in the US, said on Friday that it had received a second request from the US Federal Trade Commission (FTC) for information related to its acquisition of Marathon Oil (MRO.US), its rival. The two companies both received the request on July 11, and are working with the FTC to review the merger.
Conocophillips announced in May that it would buy Marathon Oil for $22.5bn, including $5.4bn of net debt. The company hopes the deal will boost its production and achieve greater economies of scale in the U.S. shale oil and liquefied natural gas sectors.
Under the terms of the deal, Marathon Oil shareholders will receive 0.255 shares of Conocophillips common stock for each share of Marathon Oil common stock. Conocophillips said the acquisition would add highly synergistic acreage to its existing US onshore investment portfolio, adding more than 2bn barrels of resources and expected average cost of supply below $30/barrel.
The requirement to provide more information to regulators could delay the completion of the deal. Conocophillips said in May that its “conservative” estimate for the closing of the deal was in the fourth quarter of this year. On Friday, Conocophillips reiterated that timeline.
US oil and gas M&A activity is busy
US oil and gas M&A activity has been busy since the M&A boom of 2023. In October last year, Exxon (XOM.US) announced it would buy Pioneer Natural Resources (PXD.US) for $59.5bn, which was approved by US regulators earlier this month. The combined company will have more than 14mn net acres in Pennsylvania and the Midland Basin, with an estimated 1.6bn barrels of oil equivalent.
In October last year, Chevron (CVX.US) agreed to buy Hess (HES.US), the fourth-largest oil company in the US, for $53bn. The deal will give Chevron a 30 per cent stake in the Guyana Stabroek block.
In December last year, Occidental Petroleum (OXY.US) announced it would buy CrownRock for about $12bn, adding important assets in the Anadarko Basin. Prior to that, Conocophillips and Devon Energy were potential bidders. CrownRock is estimated to be worth between $10bn and $15bn and has about 860,000 net acres in the northern part of the Midland Basin, which is part of the Anadarko Basin.