ConocoPhillips is buying Concho Resources in a $9.7 billion all-stock deal that provides a stark sign of how the pandemic is prompting new consolidation, they announced Monday.
Why it matters: It's the largest deal yet in the U.S. oil patch since the COVID-19 crisis, which has sharply cut demand and sent prices downward.
What they're saying: The companies said the deal will provide $500 in annual savings by 2022. They said their combined resource base is competitive even at modest oil prices.
The big picture: The combined company "will be one of the dominant operators in the Permian Basin of West Texas and New Mexico, rivaling only the likes of Occidental Petroleum Corp. and Chevron Corp. in terms of crude output," Bloomberg notes.
Catch up fast: It follows Chevron's deal to buy the big independent Noble Energy announced in July (which also provided Chevron new gas assets in the Mediterranean Sea).
And oil-and-gas producers Devon Energy and WPX Energy announced a merger in late September.
