ConocoPhillips to acquire Marathon Oil Corporation in all-stock transaction; provides shareholder distribution update

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• Acquisition of Marathon Oil Company is anticipated to be instantly accretive to earnings, money flows and return of capital per share.
• ConocoPhillips expects to attain no less than $500 million of run price price and capital financial savings inside the first full 12 months following the closing of the transaction.
• Impartial of the transaction, ConocoPhillips expects to extend its unusual base dividend by 34% to 78 cents per share beginning within the fourth quarter of 2024.
• Upon closing of the transaction, ConocoPhillips expects share buybacks to be over $20 billion within the first three years, with over $7 billion within the first full 12 months, at latest commodity costs.

HOUSTON – ConocoPhillips (NYSE: COP) and Marathon Oil Company (NYSE: MRO) introduced at the moment that they’ve entered right into a definitive settlement pursuant to which ConocoPhillips will purchase Marathon Oil in an all-stock transaction with an enterprise worth of $22.5 billion, inclusive of $5.4 billion of internet debt. Below the phrases of the settlement, Marathon Oil shareholders will obtain 0.2550 shares of ConocoPhillips widespread inventory for every share of Marathon Oil widespread inventory, representing a 14.7% premium to the closing share worth of Marathon Oil on Might 28, 2024, and a 16.0% premium to the prior 10-day volume-weighted common worth.

“This acquisition of Marathon Oil additional deepens our portfolio and matches inside our monetary framework, including high-quality, low price of provide stock adjoining to our main U.S. unconventional place,” mentioned Ryan Lance, ConocoPhillips chairman and chief government officer. “Importantly, we share comparable values and cultures with a concentrate on working safely and responsibly to create long-term worth for our shareholders. The transaction is straight away accretive to earnings, money flows and distributions per share, and we see important synergy potential.”

“It is a proud second to look again on what we achieved at Marathon Oil. Powered by our devoted staff and contractors, we constructed a prime performing portfolio with a multi-year observe file of peer-leading operational execution, robust monetary outcomes and compelling return of capital to our shareholders – all whereas holding true to our core values of security and environmental excellence. ConocoPhillips is the correct residence to construct on that legacy, providing a really distinctive mixture of added scale, resilience and long-term sturdiness. With its premier international asset base, robust steadiness sheet and laser concentrate on operational excellence, ConocoPhillips’ observe file of long-term investments, differentiated shareholder distributions and energetic portfolio administration are unmatched. When mixed with the worldwide ConocoPhillips portfolio, I’m assured our belongings and other people will ship important shareholder worth over the long run,” mentioned Lee Tillman, Marathon Oil chairman, president and chief government officer.

Transaction advantages

• Instantly accretive: This acquisition is straight away accretive to ConocoPhillips on earnings, money from operations, free money stream and return of capital per share to shareholders.
• Delivers important price and capital synergies: Given the adjoining nature of the acquired belongings and a typical working philosophy, ConocoPhillips expects to attain the total $500 million of price and capital synergy run price inside the first full 12 months following the closing of the transaction. The recognized financial savings will come from diminished common and administrative prices, decrease working prices and improved capital efficiencies.

• Additional enhances premier Decrease 48 portfolio: This acquisition will add extremely complementary acreage to ConocoPhillips’ present U.S. onshore portfolio, including over 2 billion barrels of useful resource with an estimated common level ahead price of provide of lower than $30 per barrel WTI.

Return of capital replace

Impartial of the transaction, ConocoPhillips expects to extend its unusual base dividend by 34% to 78 cents per share beginning within the fourth quarter of 2024. Upon closing of the transaction and assuming latest commodity costs, ConocoPhillips plans to:

• Repurchase over $7 billion in shares within the first full 12 months, up from over $5 billion standalone.
• Repurchase over $20 billion in shares within the first three years.

“We stay dedicated to our differentiated money from operations distribution framework of returning better than 30% to our shareholders, with a observe file of returning over 40% since our 2016 technique reset,” added Lance. “We plan to boost our unusual dividend by 34% within the fourth quarter and we’ll proceed to focus on top-quartile dividend development relative to the S&P 500 going ahead. Moreover, we intend to prioritize share repurchases following the shut of the transaction, with a plan to retire the equal quantity of newly issued fairness within the transaction in two to 3 years at latest commodity costs.”

Transaction particulars

The transaction is topic to the approval of Marathon Oil stockholders, regulatory clearance and different customary closing situations. The transaction is anticipated to shut within the fourth quarter of 2024.

ConocoPhillips will host a convention name at the moment at 10 a.m. Japanese time to debate this announcement. To hearken to the decision and think about associated presentation supplies, go to www.conocophillips.com/investor.

Advisors

Evercore is serving as ConocoPhillips’ monetary advisor and Wachtell, Lipton, Rosen & Katz is serving as ConocoPhillips’ authorized advisor for the transaction. Morgan Stanley & Co. LLC is serving as Marathon Oil’s monetary advisor and Kirkland & Ellis LLP is serving as Marathon Oil’s authorized advisor for the transaction.

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About ConocoPhillips

ConocoPhillips is likely one of the world’s main exploration and manufacturing corporations primarily based on each manufacturing and reserves, with a globally diversified asset portfolio. Headquartered in Houston, Texas, ConocoPhillips had operations and actions in 13 international locations, $95 billion of whole belongings, and roughly 10,000 staff at March 31, 2024. Manufacturing averaged 1,902 MBOED for the three months ended March 31, 2024, and proved reserves have been 6.8 BBOE as of Dec. 31, 2023. For extra info, go to www.conocophillips.com.

Contacts

Dennis Nuss (media)
281-293-1149
[email protected]

Investor Relations
281-293-5000
[email protected]

About Marathon Oil

Marathon Oil (NYSE: MRO) is an unbiased oil and fuel exploration and manufacturing (E&P) firm targeted on 4 of probably the most aggressive useful resource performs within the U.S. – Eagle Ford, Texas; Bakken, North Dakota; Permian in New Mexico and Texas, and STACK and SCOOP in Oklahoma, complemented by a world-class built-in fuel enterprise in Equatorial Guinea. The Firm’s Framework for Success is based in a robust steadiness sheet, ESG excellence and the aggressive benefits of a high-quality multi-basin portfolio. For extra info, please go to www.marathonoil.com.

Contacts

Karina Brooks (media)
713-296-2191

Investor Relations
Man Baber: 713-296-1892
John Reid: 713-296-4380

Ahead-Trying Statements

This information launch contains “forward-looking statements” as outlined below the federal securities legal guidelines. All statements aside from statements of historic truth included or included by reference on this information launch, together with, amongst different issues, statements concerning the proposed enterprise mixture transaction between ConocoPhillips (“ConocoPhillips”) and Marathon Oil Company (“Marathon”), future occasions, plans and anticipated outcomes of operations, enterprise methods, the anticipated advantages of the proposed transaction, the anticipated influence of the proposed transaction on the mixed firm’s enterprise and future monetary and working outcomes, the anticipated quantity and timing of synergies from the proposed transaction, the anticipated deadline for the proposed transaction and different features of ConocoPhillips’ or Marathon’s operations or working outcomes are forward-looking statements. Phrases and phrases resembling “ambition,” “anticipate,” “estimate,” “consider,” “finances,” “proceed,” “may,” “intend,” “could,” “plan,” “potential,” “predict,” “search,” “ought to,” “will,” “would,” “count on,” “goal,” “projection,” “forecast,” “objective,” “steerage,” “outlook,” “effort,” “goal” and different comparable phrases can be utilized to establish forward-looking statements. Nevertheless, the absence of those phrases doesn’t imply that the statements are usually not forward-looking. The place, in any forward-looking assertion, ConocoPhillips or Marathon expresses an expectation or perception as to future outcomes, such expectation or perception is expressed in good religion and believed to be cheap on the time such forward-looking assertion is made. Nevertheless, these statements are usually not ensures of future efficiency and contain sure dangers, uncertainties and different elements past ConocoPhillips’ or Marathon’s management. Due to this fact, precise outcomes and outcomes could differ materially from what’s expressed or forecast within the forward-looking statements.

The next necessary elements and uncertainties, amongst others, may trigger precise outcomes or occasions to vary materially from these described in forward-looking statements: ConocoPhillips’ means to efficiently combine Marathon’s companies and applied sciences, which can consequence within the mixed firm not working as successfully and effectively as anticipated; the chance that the anticipated advantages and synergies of the proposed transaction is probably not totally achieved in a well timed method, or in any respect; the chance that ConocoPhillips or Marathon will likely be unable to retain and rent key personnel; the chance related to Marathon’s means to acquire the approval of its stockholders required to consummate the proposed transaction and the timing of the closing of the proposed transaction, together with the chance that the situations to the transaction are usually not glad on a well timed foundation or in any respect or the failure of the transaction to shut for some other motive or to shut on the anticipated phrases, together with the anticipated tax remedy (and with respect to will increase in ConocoPhillips’ share repurchase program, such will increase are usually not meant to exceed shares issued within the transaction); the chance that any regulatory approval, consent or authorization that could be required for the proposed transaction shouldn’t be obtained or is obtained topic to situations that aren’t anticipated; the incidence of any occasion, change or different circumstance that would give rise to the termination of the proposed transaction; unanticipated difficulties, liabilities or expenditures referring to the transaction; the impact of the announcement, pendency or completion of the proposed transaction on the events’ enterprise relationships and enterprise operations usually; the impact of the announcement or pendency of the proposed transaction on the events’ widespread inventory costs and uncertainty as to the long-term worth of ConocoPhillips’ or Marathon’s widespread inventory; dangers that the proposed transaction disrupts present plans and operations of ConocoPhillips or Marathon and their respective administration groups and potential difficulties in hiring or retaining staff because of the proposed transaction; ranking company actions and ConocoPhillips’ and Marathon’s means to entry short- and long-term debt markets on a well timed and inexpensive foundation; adjustments in commodity costs, together with a chronic decline in these costs relative to historic or future anticipated ranges; international and regional adjustments within the demand, provide, costs, differentials or different market situations affecting oil and fuel, together with adjustments ensuing from any ongoing army battle, together with the conflicts in Ukraine and the Center East, and the worldwide response to such battle, safety threats on amenities and infrastructure, or from a public well being disaster or from the imposition or lifting of crude oil manufacturing quotas or different actions that is perhaps imposed by Group of Petroleum Exporting Nations and different producing international locations and the ensuing firm or third-party actions in response to such adjustments; inadequate liquidity or different elements that would influence ConocoPhillips’ means to repurchase shares and declare and pay dividends such that ConocoPhillips suspends its share repurchase program and reduces, suspends or completely eliminates dividend funds sooner or later, whether or not variable or fastened; adjustments in anticipated ranges of oil and fuel reserves or manufacturing; potential failures or delays in reaching anticipated reserve or manufacturing ranges from present and future oil and fuel developments, together with resulting from working hazards, drilling dangers or unsuccessful exploratory actions; sudden price will increase, inflationary pressures or technical difficulties in developing, sustaining or modifying firm amenities; legislative and regulatory initiatives addressing international local weather change or different environmental considerations; public well being crises, together with pandemics (resembling COVID-19) and epidemics and any impacts or associated firm or authorities insurance policies or actions; funding in and improvement of competing or different power sources; potential failures or delays in delivering on ConocoPhillips’ present or future low-carbon technique, together with ConocoPhillips’ lack of ability to develop new applied sciences; disruptions or interruptions impacting the transportation for ConocoPhillips’ or Marathon’s oil and fuel manufacturing; worldwide financial situations and change price fluctuations; adjustments in worldwide commerce relationships or governmental insurance policies, together with the imposition of worth caps, or the imposition of commerce restrictions or tariffs on any supplies or merchandise (resembling aluminum and metal) used within the operation of ConocoPhillips’ or Marathon’s enterprise, together with any sanctions imposed because of any ongoing army battle, together with the conflicts in Ukraine and the Center East; ConocoPhillips’ means to gather funds when due, together with ConocoPhillips’ means to gather funds from the federal government of Venezuela or PDVSA; ConocoPhillips’ means to finish some other introduced or some other future inclinations or acquisitions on time, if in any respect; the likelihood that regulatory approvals for some other introduced or any future inclinations or some other acquisitions is not going to be acquired on a well timed foundation, if in any respect, or that such approvals could require modification to the phrases of these transactions or ConocoPhillips’ remaining enterprise; enterprise disruptions following any introduced or future inclinations or different acquisitions, together with the diversion of administration time and a focus; the flexibility to deploy internet proceeds from ConocoPhillips’ introduced or any future inclinations within the method and timeframe anticipated, if in any respect; potential legal responsibility for remedial actions below present or future environmental laws; potential legal responsibility ensuing from pending or future litigation; the influence of competitors and consolidation within the oil and fuel business; restricted entry to capital or insurance coverage or considerably increased price of capital or insurance coverage associated to illiquidity or uncertainty within the home or worldwide monetary markets or investor sentiment; common home and worldwide financial and political situations or developments, together with because of any ongoing army battle, together with the conflicts in Ukraine and the Center East; adjustments in fiscal regime or tax, environmental and different legal guidelines relevant to ConocoPhillips’ or Marathon’s companies; disruptions ensuing from accidents, extraordinary climate occasions, civil unrest, political occasions, struggle, terrorism, cybersecurity threats or info know-how failures, constraints or disruptions; and different financial, enterprise, aggressive and/or regulatory elements affecting ConocoPhillips’ or Marathon’s companies usually as set forth of their filings with the Securities and Change Fee (the “SEC”). The registration assertion on Type S-4 and proxy assertion/prospectus that will likely be filed with the SEC will describe extra dangers in reference to the proposed transaction. Whereas the listing of things offered right here is, and the listing of things to be offered within the registration assertion on Type S-4 and proxy assertion/prospectus are thought of consultant, no such listing needs to be thought of to be a whole assertion of all potential dangers and uncertainties. For extra details about different elements that would trigger precise outcomes to vary materially from these described within the forward-looking statements, please confer with ConocoPhillips’ and Marathon’s respective periodic experiences and different filings with the SEC, together with the chance elements contained in ConocoPhillips’ and Marathon’s most up-to-date Quarterly Experiences on Type 10-Q and Annual Experiences on Type 10-Ok.  Ahead-looking statements symbolize present expectations and are inherently unsure and are made solely as of the date hereof (or, if relevant, the dates indicated in such assertion).  Besides as required by legislation, neither ConocoPhillips nor Marathon undertakes or assumes any obligation to replace any forward-looking statements, whether or not because of new info or to mirror subsequent occasions or circumstances or in any other case.

No Provide or Solicitation

This information launch shouldn’t be meant to and shall not represent a proposal to purchase or promote or the solicitation of a proposal to purchase or promote any securities, or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction by which such provide, solicitation or sale can be illegal previous to registration or qualification below the securities legal guidelines of any such jurisdiction.  No providing of securities shall be made, besides via a prospectus assembly the necessities of Part 10 of the U.S. Securities Act of 1933, as amended.  

Extra Details about the Merger and The place to Discover It

In reference to the proposed transaction, ConocoPhillips intends to file with the SEC a registration assertion on Type S-4, which can embody a proxy assertion of Marathon that additionally constitutes a prospectus of ConocoPhillips widespread shares to be supplied within the proposed transaction.  Every of ConocoPhillips and Marathon might also file different related paperwork with the SEC concerning the proposed transaction. This information launch shouldn’t be an alternative to the proxy assertion/prospectus or registration assertion or some other doc that ConocoPhillips or Marathon could file with the SEC.  The definitive proxy assertion/prospectus (if and when accessible) will likely be mailed to stockholders of Marathon.  INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT, PROXY STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS THAT MAY BE FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY IF AND WHEN THEY BECOME AVAILABLE BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION.  Traders and safety holders will have the ability to acquire free copies of the registration assertion and proxy assertion/prospectus (if and when accessible) and different paperwork containing necessary details about ConocoPhillips, Marathon and the proposed transaction, as soon as such paperwork are filed with the SEC by way of the web site maintained by the SEC at www.sec.gov.  Copies of the paperwork filed with the SEC by ConocoPhillips will likely be accessible freed from cost on ConocoPhillips’ web site at www.conocophillips.com or by contacting ConocoPhillips’ Investor Relations Division by e mail at [email protected] or by telephone at 281-293-5000.  Copies of the paperwork filed with the SEC by Marathon will likely be accessible freed from cost on Marathon’s web site at ir.marathonoil.com or by contacting Marathon at 713-629-6600.

Members within the Solicitation

ConocoPhillips, Marathon and sure of their respective administrators and government officers could also be deemed to be contributors within the solicitation of proxies in respect of the proposed transaction.  Details about the administrators and government officers of ConocoPhillips is about forth in (i) ConocoPhillips’ proxy assertion for its 2024 annual assembly of stockholders below the headings “Government Compensation”, “Merchandise 1: Election of Administrators and Director Biographies” (together with “Associated Celebration Transactions” and “Director Compensation”), “Compensation Dialogue and Evaluation”, “Government Compensation Tables” and “Inventory Possession”, which was filed with the SEC on April 1, 2024 and is out there at https://www.sec.gov/ix?doc=/Archives/edgar/information/1163165/000130817924000384/cop4258041-def14a.htm, (ii) ConocoPhillips’ Annual Report on Type 10-Ok for the fiscal 12 months ended December 31, 2023, together with below the headings “Merchandise 10. Administrators, Government Officers and Company Governance”, “Merchandise 11. Government Compensation”, “Merchandise 12. Safety Possession of Sure Useful House owners and Administration and Associated Stockholder Issues” and “Merchandise 13. Sure Relationships and Associated Transactions, and Director Independence”, which was filed with the SEC on February 15, 2024 and is out there at https://www.sec.gov/ix?doc=/Archives/edgar/information/1163165/000116316524000010/cop-20231231.htm and (iii) to the extent holdings of ConocoPhillips securities by its administrators or government officers have modified because the quantities set forth in ConocoPhillips’ proxy assertion for its 2024 annual assembly of stockholders, such adjustments have been or will likely be mirrored on Preliminary Assertion of Useful Possession of Securities on Type 3, Assertion of Adjustments in Useful Possession on Type 4 or Annual Assertion of Adjustments in Useful Possession of Securities on Type 5, filed with the SEC (which can be found at EDGAR Search Outcomes https://www.sec.gov/edgar/search/#/class=form-cat2&ciks=0001163165&entityName=CONOCOPHILLIPSpercent2520(COP)%2520(CIKpercent25200001163165)). Details about the administrators and government officers of Marathon is about forth in (i) Marathon’s proxy assertion for its 2024 annual assembly of stockholders below the headings “Proposal 1: Election of Administrators”, “Director Compensation”, “Safety Possession of Sure Useful House owners and Administration”, “Compensation Dialogue and Evaluation”, “Government Compensation” and “Transactions with Associated Individuals”, which was filed with the SEC on April 10, 2024 and is out there at https://www.sec.gov/ix?doc=/Archives/edgar/information/101778/000010177824000082/mro-20240405.htm, (ii) Marathon’s Annual Report on Type 10-Ok for the fiscal 12 months ended December 31, 2023, together with below the headings “Merchandise 10. Administrators, Government Officers and Company Governance”, “Merchandise 11. Government Compensation”, “Merchandise 12. Safety Possession of Sure Useful House owners and Administration and Associated Stockholder Issues” and “Merchandise 13. Sure Relationships and Associated Transactions, and Director Independence”, which was filed with the SEC on February 22, 2024 and is out there at https://www.sec.gov/ix?doc=/Archives/edgar/information/101778/000010177824000023/mro-20231231.htm and (iii) to the extent holdings of Marathon securities by its administrators or government officers have modified because the quantities set forth in Marathon’s proxy assertion for its 2024 annual assembly of stockholders, such adjustments have been or will likely be mirrored on Preliminary Assertion of Useful Possession of Securities on Type 3, Assertion of Adjustments in Useful Possession on Type 4, or Annual Assertion of Adjustments in Useful Possession of Securities on Type 5, filed with the SEC (which can be found at EDGAR Search Outcomes https://www.sec.gov/edgar/search/#/class=form-cat2&ciks=0000101778&entityName=MARATHONpercent2520OILpercent2520CORPpercent2520(MRO)%2520(CIKpercent25200000101778)).

Different info concerning the contributors within the proxy solicitations and an outline of their direct and oblique pursuits, by safety holdings or in any other case, will likely be contained within the proxy assertion/prospectus and different related supplies to be filed with the SEC concerning the proposed transaction when such supplies grow to be accessible.  Traders ought to learn the proxy assertion/prospectus rigorously when it turns into accessible earlier than making any voting or funding choices.  Copies of the paperwork filed with the SEC by ConocoPhillips and Marathon will likely be accessible freed from cost by way of the web site maintained by the SEC at www.sec.gov. Moreover, copies of paperwork filed with the SEC by ConocoPhillips will likely be accessible freed from cost on ConocoPhillips’ web site at www.conocophillips.com/ and people filed by Marathon will likely be accessible freed from cost on Marathon’s web site at ir.marathonoil.com/.

Use of Non-GAAP Monetary Data and Different Phrases – This information launch accommodates sure monetary measures that aren’t ready in accordance with GAAP, together with money from operations (CFO), free money stream and internet debt. CFO is calculated by eradicating the influence from working working capital from money offered by working actions. Free money stream is CFO internet of capital expenditures and investments. Web debt is whole steadiness sheet debt much less money, money equivalents and short-term investments. This information launch additionally accommodates the phrases enterprise worth, price of provide and return of capital. Enterprise worth included on this launch is calculated primarily based on the sum of internet debt as of March 31, 2024, and anticipated shares to be issued on the fastened change ratio of 0.2550 measured at ConocoPhillips’ closing share worth on Might 28, 2024. Value of provide is the WTI equal worth that generates a ten % after-tax return on a point-forward and totally burdened foundation. Totally burdened contains capital infrastructure, overseas change, price-related inflation, G&A and carbon tax (if presently assessed). If no carbon tax exists for the asset, carbon pricing aligned with inner power eventualities are utilized. All barrels of useful resource are discounted at 10 %. Return of capital is outlined as the whole of the unusual dividend, share repurchases and variable return of money (VROC).

Cautionary Word to U.S. Traders – The SEC permits oil and fuel corporations, of their filings with the SEC, to reveal solely proved, possible and doable reserves. We could use the time period “useful resource” on this launch that the SEC’s tips prohibit us from together with in filings with the SEC. U.S. buyers are urged to contemplate carefully the oil and fuel disclosures in our Type 10-Ok and different experiences and filings with the SEC. Copies can be found from the SEC and from the ConocoPhillips web site.