ConocoPhillips is set to buy its rival shale oil producer Concho Resources Inc for $9.7 billion, in an all-stock deal that would make it the largest U.S. independent oil and gas firm despite persistent collapse in prices and demand of fuel in the global market due to coronavirus pandemic.
U.S. oil and gas giant ConocoPhillips announced on Monday that has agreed to buy its rival shale oil producer Concho Resources Inc for $9.7 billion, becoming the biggest shale industry agreement done amid the prevalent oil and crude demand downturn due to the pandemic crisis.
The low-premium and all-stock acquisition deal aims to make ConocoPhillips become the largest independent oil and gas firm in the U.S. as several shale companies continue to face severe losses.
In the two companies’ joint statement on Monday, they said that investors would acquire 1.46 Conoco shares for each Concho share. Their combination would become one of the top crude producers in the Permian Basin of West Texas and New Mexico.
Concho is one of Permian’s largest producer, pumping approximately 319,000 barrels per day (bpd).
Conoco is the largest oil producer in Alaska. However, it only pumps nearly 50,000 bpd in its shale field in the Permian.
“Sector consolidation is both necessary and inevitable,” ConocoPhillips CEO Ryan Lance said in a statement on Monday following the announcement of the deal. “We both believe our industry needs solutions that address the lack of scale, poor returns and, increasingly, the challenges and opportunities of environmental, social and governance matters.”
© Fourth Estate® — All Rights Reserved.
This material may not be published, broadcast, rewritten or redistributed.