Street View: Forecasted synergies from ConocoPhillips-Marathon Oil deal could be conservative

Marathon Oil

30/05/2024 10:59

** Top U.S. independent oil and gas producer ConocoPhillips
 COP.N  on Wednesday agreed to buy Marathon Oil  MRO.N  for
$22.5 billion, the latest in a series of mega-deals in the
energy industry
    ** 26 brokerages cover COP with a median PT of $142, while
the median PT of 22 brokerages tracking MRO is $34 - LSEG data
    
    SURPRISING BUT LOGICAL
    ** Truist Securities views the deal positively given the
immediate accretion on all metrics
    ** Brokerage says transaction adds quality acreage, making
COP one of the largest Bakken and Eagle Ford asset holders
    ** Jefferies says for COP the transaction was not about
inventory depth but value; also says the $500 million dollars of
synergies could be conservative
    ** RBC Capital Markets says though surprising, the deal
makes sense as there is asset overlap and it would generate
tangible synergies and free cash flow generation
    ** Also believes the combined market share in the overlap
area was not as concerning compared with recent transactions
that have been approved
    ** Roth MKM says there could be quite more synergies on the
capital side than the $100 million expected

 (Reporting by Gokul Pisharody in Bengaluru)
 ((Gokul.Pisharody@thomsonreuters.com))