ConocoPhillips buying Marathon Oil for $17.B in all-stock deal as energy prices rise

M&A moves

The deal to combine the two Houston-headquartered companies is valued at $22.5 billion when including $5.4 billion in debt. Photo via conocophillips.com

ConocoPhillips is buying Marathon Oil in an all-stock deal valued at approximately $17.1 billion as energy prices rise and big oil companies reap massive profits.

The deal to combine the two Houston-headquartered companies is valued at $22.5 billion when including $5.4 billion in debt.

Crude prices have jumped more than 12% this year and the cost for a barrel rose above $80 this week. Oil majors put up record profits after Russia's invasion of Ukraine in 2022 and while those numbers have slipped, there has been a surge in mergers between energy companies flush with cash.

Chevron said last year that it was buying Hess in a $53 billion acquisition, though that deal faces headwinds. The company warned the buyout may be in jeopardy because it will require the approval of Exxon Mobil and a Chinese national oil company, which both hold rights to development of an oil field off the coast of the South American nation Guyana where Hess is a big player.

In July of last year, Exxon Mobil said that it would pay $4.9 billion for Denbury Resources, an oil and gas producer that has entered the business of capturing and storing carbon and stands to benefit from changes in U.S. climate policy. Three months later, Exxon announced the proposed acquisition of shale operator Pioneer Natural Resources for $60 billion.

All of the proposed acquisitions could face pushback from the U.S. which, under the Biden administration, has stepped up antitrust reviews for energy companies and other sectors as well, such as tech.

Federal Trade Commission, which enforces federal antitrust law, asked for additional information from Exxon and Pioneer about their proposed deal. The request is a step the agency takes when reviewing whether a merger could be anticompetitive under U.S. law. Pioneer disclosed the request in a filing in January.

As part of the ConocoPhillips transaction, Marathon Oil shareholders will receive 0.2550 shares of ConocoPhillips common stock for each share of Marathon Oil common stock that they own, the companies said Wednesday.

ConocoPhillips said Wednesday that the transaction will add highly desired acreage to its existing U.S. onshore portfolio.

“This acquisition of Marathon Oil further deepens our portfolio and fits within our financial framework, adding high-quality, low cost of supply inventory adjacent to our leading U.S. unconventional position,” ConocoPhillips Chairman and CEO Ryan Lance said in a prepared statement.

The deal is expected to close in the fourth quarter. It still needs approval from Marathon Oil stockholders.

Separate from the transaction, ConocoPhillips said that it anticipates raising its ordinary dividend by 34% to 78 cents per share starting in the fourth quarter. The company said that once the Marathon Oil deal closes and assuming recent commodity prices, ConocoPhillips plans to buy back more than $7 billion in shares in the first full year. It plans to repurchase more than $20 billion in shares in the first three years.

Shares of ConocoPhillips declined 3.3% before the market open, while Marathon Oil Corp.'s stock rose more than 7%.

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Texas named most vulnerable state to climate change in new report

lone star disappointment

The Lone Star State performed most averagely in a new report that ranked all 50 states on environmental protection.

Texas ranked No. 22 on the report from SmileHub, a nonprofit tech platform using data to evaluate charities. The report analyzed 23 metrics — from energy efficiency score and industrial toxins per square mile of land area to climate change vulnerability — factoring in data from U.S. Census Bureau, Internal Revenue Service, Department of Agriculture, and more.

"The U.S. produces over 292 million tons of waste per year, or over 4.9 pounds per person per day, according to the latest data from the Environmental Protection Agency," reads the report. "Additionally, due to pollution, California, Oregon, Michigan, Indiana and South Carolina each have over 12,000 miles of river unsuitable for human contact. Pollution and waste are issues across the U.S., but some states work harder than others to limit their impact."

In addition to its middle-of-the-pack No. 22 overall ranking, Texas took first place in the "Vulnerability to Climate Change" category. Here's how else the state measured up:

No. 18 – Environmental Protection Charities per Capita
No. 36 – Share of State Land Designated for Parks and Wildlife
No. 28 – Energy Efficiency Score
No. 28 – Share of Population Using Green Transportation
No. 33 – Total Tonnage of Landfill Waste per Capita
No. 28 – Industrial Toxins per Square Mile of Land Area

It's not the first time the state performed poorly on recent environmental reports. In April, WalletHub evaluated evaluated the current health of states' environment and residents’ environmental-friendliness. Texas ranked No. 38, meaning it was the thirteenth least green state, only scoring 50.40 points out of 100.

Additionally, Houston has stood out for the wrong reasons. In May, Houston was ranked as the No. 15 most polluted city in the U.S. according to data compiled by the National Public Utilities Council. No other Texas city appears in the ranking. Three California cities — Bakersfield, Visalia, and Fresno — took the top three spots.

Houston company breaks ground on North Texas solar project

coming soon

A Houston-area company has broken ground on a new 310-megawatt solar project located in Bosque County, Texas.

League City-based INEOS Olefins & Polymers and Florida-based NextEra Energy Resources announced the groundbreaking on INEOS Hickerson Solar, which will reportedly save over 310,000 tons of CO2 every year.

“INEOS O&P USA is committed to leading the petrochemical community in adopting renewable energy solutions,” says CEO Mike Nagle in a news release. “This solar project is a crucial step in our global efforts to reduce the carbon footprint of INEOS businesses.”

The INEOS Hickerson Solar project will be constructed, owned and operated by a subsidiary of NextEra Energy Resources, and the output will aim to cover the net purchased electricity load for all 14 of INEOS O&P USA’s manufacturing, fractionation and storage facilities. Commercial operation is expected by December 2025.

The project is expected to produce 730,000 megawatt-hours of clean energy annually, which is the equivalent to the annual electricity use of over 68,000 homes. INEOS hopes this will significantly contribute to reducing greenhouse gas emissions by approximately 310,000 tons per year.

This follows the recently signed renewable power purchase agreement with NextEra Energy Resources, which is the world's largest generator of renewable energy from wind and sun.

6 sustainability-minded Houston stores giving discounts for old clothes

CLOTHES THE LOOP

Shopping is fun, but it comes with the unseen price tag of more than 92 million tons of global textile waste generated each year. With the apparel industry's global emissions predicted to increase by 50 percent in just six years, many see this as a full-blown climate crisis that is already affecting people across the globe.

To combat this problem, several retailers have committed to bolstering their sustainability efforts. From recycling linens, towels, pillows, and robes to upcycling denim, companies are finding ways for every textile to be saved from the landfill and either re-worn, repurposed, or recycled.

Stores trying to make a difference include Patagonia, North Face, J.Jill, Carter's, and DSW Shoes. To make summer vacation and back-to-school shopping more environmentally friendly, we've rounded up six Houston retailers where customers can trade in used clothing and textiles for exclusive discounts.

Gap

Gap has partnered with ThredUp, an online resale company, to recycle gently used clothing for their Gap for Good initiative. Customers can activate a kit and get a label here, fill the bag, and drop it off at any FedEx or post office location. If ThredUp selects any items for resale, customers can choose to receive either cash or store credit. Those who opt for store credit and use it at any Gap Inc.-brand stores will receive an additional 15% off their purchase. For clothes not chosen for resale, ThredUp offers recycling services, or the items can be mailed back to the customer for a fee.

H&M

According to H&M's website, its worldwide garment recycling program, launched in 2013, is "the biggest of its kind in the world." Customers can get 15 percent off their purchase by bringing unwanted clothes or textiles — from any brand and in any condition — to one of its stores. Turn them in at the cashier's kiosk and receive a coupon for their next purchase. The clothing and textiles will be sorted into three categories: re-wear, reuse, or recycling.

Levi's

Levi's aims to keep its coveted jeans in circulation and out of landfills with its trade-in program. The brand accepts denim and trucker jackets that are still in good condition; they repair any minor damage, sanitize the items, and resell them through their secondhand shop. Customers will receive a gift card ranging from $5 to $30, depending on the value of the item traded in. Customers must make an appointment to take advantage of this program, and only certain types of denim are accepted. A complete list of requirements is available here.

Lululemon

Have a drawer full of old Lululemon workout gear? Trade it in for a gift card towards a future purchase. The garment does not need to have its care tag, size tag, or price tag for this initiative; the workout brand accepts clean and gently worn (items with no damage, pilling, rips, or discoloration) women's and men's Lululemon clothing and bags for their Like New program. Except for outlet stores, every Lululemon outpost can accept items for the Like New program. Check what they're taking before going to the store, because items cycle in and out depending on seasonality and inventory. The value of the gift card customers will receive is determined by the value of the items traded in, but generally ranges in price from $5 to $25 and can be redeemed in-store or online.

Madewell

Madewell is on a mission to become fully sustainable, defined as using only fibers sustainably sourced and free of virgin plastics, by 2025. It has partnered with Cotton's Blue Jeans Go Green program to repurpose denim and keep it out of landfills by turning old jeans into housing insulation.

To participate in Madewell's recycling program, bring any brand or style of jeans in any condition to any Madewell store. If shipping is more convenient, activate a Clean Out Kit here or print out a free shipping label and mail in women's previously used clothing, handbags, shoes, and accessories from any brand. In exchange, customers will get a coupon for $20 off purchasing one new pair of Madewell jeans.

Parachute

Parachute, the beloved home essentials brand, is celebrating its 10th anniversary by launching a recycling program. In partnership with SuperCircle, they accept used towels, sheets, and robes. Although there are several recycling programs for clothing, shoes, and accessories, Parachute is pioneering this type of program in the home textile sector.

To participate in the program, customers can take their sheets, towels, pillows, and robes in any condition from any brand to Parachute's Rice Village store. They'll sort and recycle donated items for a second life – from new textiles to new projects, including furniture batting, insulation, and padding – sending nothing to landfill. In return, customers will receive a discount on their next Parachute purchase.

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This article originally ran on CultureMap.

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