Go faster

19 October 2020 By Robert Cyran Follow @rob_cyran

ConocoPhillips is scooping up Concho for $10 bln after the oil price rout cut its stock nearly in half. Cost cuts are in theory worth three times the premium. But drillers consistently burn cash. Consolidation helps, but oil’s dimming future means they are racing against time.

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Oil and gas driller ConocoPhillips is buying rival fossil fuel producer Concho Resources in an all-stock deal valued at $9.7 billion, the companies said on Oct. 19. Concho shareholders will receive 1.46 shares in ConocoPhillips stock for each Concho share held, representing a premium of 15% on Conoco’s closing price Oct. 13, prior to Bloomberg reporting the two companies were in talks.

The combined company, which will have a value of approximately $60 billion including debt, should be able to obtain $500 million of annual cost and capital savings by 2022.

In July, Chevron said that it would buy Noble Energy for $5 billion. That deal closed earlier this month.

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