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ConocoPhillips to amass Concho Sources for $ 9.7 billion as a part of the highest shale deal in 2020

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ConocoPhillips announced Monday that it will purchase the Permian-focused drill Concho Resources for $ 9.7 billion. This is the largest shale deal this year as oil and gas producers turn to consolidation to weather a slowdown in oil prices and demand.

The all-stock deal comes as U.S. shale companies suffered large losses due to weak crude oil prices amid the Covid-19 pandemic and struggled to raise new capital to restructure debt.

Concho shareholders will receive 1.46 shares of ConocoPhillips for each share held.

According to Reuters calculations, the deal for USD 49.30 per share corresponds to a premium of 1.4% compared to the Concho deal on Friday.

Together, the companies expect to achieve annual cost and capital savings of $ 500 million by 2022.

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Steven Gregory