ConocoPhillips Acquires Concho

ConocoPhillips (NYSE: COP) reported Friday that it has completed its acquisition of Concho Resources (NYSE: CXO), with shareholders of both firms having approved the combination.

“We appreciate the strong support for this transaction from the shareholders of both companies, which we view as further affirmation of the significant benefits it will deliver,” ConocoPhillips Chairman and CEO Ryan Lance commented in a written statement. “This acquisition results in the combination of two premier companies that can lead the structural change for our vital industry that’s critical to investors.”

According to a fact sheet on ConocoPhillips’ website, the transaction creates an approximately $60 billion company with:

• A resource base of approximately 23 billion barrels of oil equivalent with a WTI cost of supply below $40 per barrel and an average cost of supply below $30 per barrel
• Disciplined capital allocation with expected annual cost and capital savings of $500 million by next year
• A financial framework that provides more than 30 percent of cash from operations via dividend and other distributions
• Greater environmental, social, governance (ESG) focus with a new “Paris-Aligned Climate Risk” strategy.

“I also welcome (former Concho Chairman and CEO) Tim Leach to ConocoPhillips’ board of directors and executive leadership team,” Lance continued. “Tim and his organization built a best-in-class Permian company and we both look forward to creating significant value from this transaction. Thanks to the considerable efforts of our transition teams over these past few months, we’re off to a fast start toward seamlessly integrating our two companies and building momentum as a sector leader.”

As a December Bloomberg article posted to Rigzone noted, acquiring Concho will boost ConocoPhillips’ presence in the Permian Basin. The news service also reported, however, that the deal will bring significant job cuts. ConocoPhillips has warned that it could trim its Houston headquarters staff by up to 25 percent.

To contact the author, email mveazey@rigzone.com.