ConocoPhillips is acquiring Permian heavyweight Concho Resources in an all-stock deal for $49.30 per share (total equity value of $9.7 billion) and a total enterprise value of $13.3 billion. The acquisition adds 550,000 net acres in the Permian (350,000 Delaware acres and 200,000 Midland acres) plus 200,000 bbl/d oil output and 719 MMcf/d gas production for 2Q20 to Conoco’s portfolio, increasing Permian output six-fold. Only 20% of Concho’s leasehold is located on federal land.
“Concho Resources is one of the premier acquisition targets among U.S. shale drillers and Conoco is on a very short list of potential buyers, so this deal looks to be a natural fit on both sides,” said Enverus M&A analyst Andrew Dittmar. The $13.3 billion acquisition is the largest upstream deal entirely focused on shale since BHP bought Petrohawk for $15.1 billion in 2011.