ConocoPhillips in Talks to Acquire Marathon Oil, FT Reports

(Bloomberg) — ConocoPhillips is in advanced talks to acquire Marathon Oil Corp., which would extend a major wave of consolidation among the US oil and gas industry, according to people familiar with the matter.

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An announcement could come as soon as Wednesday morning in New York. The all-stock proposal would value the target at slightly more than its market capitalization of about $15 billion, according to the Financial Times, which reported the potential deal earlier.

Adding Marathon, which is almost entirely focused on the US, would broaden Conoco’s footprint in domestic shale fields from Texas to North Dakota.It would add to a slew of recent megadeals as producers seek to drive down costs and bet that oil and gas demand will remain robust for years to come.

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Marathon rose as much as 6.2% in premarket trading Wednesday, while Conoco edged lower. Neither company responded to Bloomberg News requests for comment outside normal business hours.

Conoco is among major drillers — including Exxon Mobil Corp. and Chevron Corp. — pursuing production growth via acquisitions. The company has already expanded in the Permian Basin in recent years through a $13 billion takeover of Concho Resources Inc. and a smaller purchase of Shell Plc assets in the region.

It has been vying with smaller rival Devon Energy Corp. to acquire Marathon for several weeks, the FT said. Devon previously held talks over a potential combination last year, people familiar with the matter told Bloomberg News at the time.

–With assistance from Subrat Patnaik and David Stringer.

(Updates first and second paragraph with sourcing)

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