Top U.S. independent oil producer ConocoPhillips (COP.N) announced on Friday that it received a second request for information from the U.S. Federal Trade Commission (FTC) regarding its proposed acquisition of Marathon Oil (MRO.N).
Both companies received these requests on July 11 and are collaborating with the FTC to facilitate the merger review process.
In May, ConocoPhillips declared its intent to acquire Marathon Oil for $22.5 billion in stock.
This strategic move aims to enhance its production capacity and achieve significant economies of scale in U.S. shale fields and liquefied natural gas operations.
The announcement followed a series of notable acquisitions in the oil industry, including Exxon Mobil’s (XOM.N) $60 billion purchase of Pioneer Natural Resources, Chevron’s (CVX.N) proposed $53 billion merger with Hess, Chesapeake Energy’s (CHK.O) $7.4 billion acquisition of Southwestern Energy, and Occidental Petroleum’s (OXY.N) $12 billion bid for CrownRock.
The FTC’s request for additional information is expected to delay the deal’s closing.
Initially, ConocoPhillips had projected a “conservative” closing date in the fourth quarter of this year, aiming to realize the cost savings and benefits from shared equipment and staff promptly.
The company reiterated this timeframe on Friday.
Both ConocoPhillips and Marathon Oil have operations in the shale fields of West Texas, South Texas, and North Dakota, making their merger a significant consolidation in these key regions.
The merger between ConocoPhillips and Marathon Oil would result in a combined entity producing 2.26 million barrels of oil and gas per day.
It would also add 1.32 billion barrels of proved reserves to ConocoPhillips’ existing 6.8 billion barrels.
The offer of 0.255 shares of ConocoPhillips for each share of Marathon represented a 14.7% premium to Marathon’s pre-deal closing price.
This acquisition is part of a broader trend of consolidation in the oil industry, as major players seek to strengthen their positions and achieve greater efficiency amid fluctuating market conditions.
ConocoPhillips and Marathon Oil are now focused on navigating the regulatory review process to finalize their merger and capitalize on the anticipated benefits.