- ConocoPhillips (NYSE: COP) announced that it is buying Concho Resources Inc (NYSE: CXO) in an all-stock deal valued at $9.7 billion. These are the details.
ConocoPhillips (NYSE: COP) announced that it is buying Concho Resources Inc (NYSE: CXO) in an all-stock deal valued at $9.7 billion. Under the terms of the deal, each share of Concho Resources’ common stock is going to be exchanged for a fixed ratio of 1.46 shares of ConocoPhillips common stock. ConocoPhillips noted that the transaction will create a company with about a $60 billion enterprise value.
The deal combines two asset portfolios that create a combined resource base of approximately 23 billion barrels of oil equivalent with a less than $40 per barrel WTI cost of supply and an average cost of supply below $30 per barrel WTI. And ConocoPhillips and Concho expect to capture $500 million of annual cost and capital savings by 2022.
Upon the closing of the deal, Concho’s Chairman and Chief Executive Officer Tim Leach will join ConocoPhillips’ board of directors and executive leadership team as executive vice president and president, Lower 48.
KEY QUOTES:
“The leadership and boards of both companies believe today’s transaction is an affirmation of our commitment to lead a structural change for our vital industry. Concho is a tremendous fit with ConocoPhillips. Together, ConocoPhillips and Concho will have unmatched scale and quality across the important value drivers in our business: an enviable low cost of supply asset base, a strong balance sheet, a disciplined capital allocation approach, ESG excellence and great people. Importantly, the transaction meets our long-stated and clear criteria for mergers and acquisitions because it is completely consistent with our financial and operational framework.”
— Ryan Lance, ConocoPhillips chairman and chief executive officer
“Through this combination, we are joining a diversified energy company with even more scale and resources to create shareholder value in today’s markets and beyond. Thanks to our team, Concho is one of the largest unconventional shale producers in the United States, with a high-quality asset base, a culture of operational excellence, safety and efficiency, and a strong balance sheet. Through consolidation, we will apply our assets, capabilities and superior performance to the business model of the future, creating a better-capitalized company with enhanced capital discipline, more flexibility, and an unwavering commitment to sustainability. From our position of strength and in light of market trends, our board of directors and management team evaluated a wide range of options and unanimously determined that combining with ConocoPhillips is the best path forward for Concho and our shareholders. We look forward to bringing together our complementary operations, teams, and cultures to realize the upside potential of this exciting combination.”
— Tim Leach, chairman and chief executive officer of Concho Resources
