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ConocoPhillips buying Concho in $9.7B all-stock deal

By CATHY BUSSEWITZ sin and has more time than
AP Business Writer most peers before signifi-
NEW YORK (AP) — Cono- cant long-term debt mile-
coPhillips is buying shale stone payments arrive," he
producer Concho Resourc- said.
es in an all-stock deal val- ConocoPhillips had acre-
ued at $9.7 billion, making age in the Permian Basin,
it a major presence in the but it was small compared
Permian Basin, the top-pro- to the company's size, and
ducing oil field in the U.S. the deal "gets them a pre-
The combined company, mier position in the Perm-
if approved, would be ian," LeBlanc said.
among the largest U.S. oil "Concho is a tremendous
producers, with produc- fit with ConocoPhillips," said
tion of more than 1.5 mil- CEO and Chairman Ryan
lion barrels of oil equivalent Lance in a prepared state-
per day, a resource base ment.
of approximately 23 billion The companies, both
barrels of oil and an enter- based in Texas, will com-
prise value of about $60 bil- bine their acreage across
lion. the Delaware and Midland
The deal comes as many oil Associated Press basins — both part of the
producers are struggling to "When we add it all up, comment. "Because of their discipline, Permian — and also in-
make ends meet. Oil pric- we see an industry that will Many shale producers they're now in a position of cludes positions in the Ea-
es have remained low for remain challenged and were struggling before the strength to go ahead and gle Ford and Bakken basins
months, mainly because smaller producers are rec- pandemic struck, racking buy people who were fast and the Montney in Can-
efforts to contain the coro- ognizing this, accepting up huge, unsustainable growers," such as Concho, ada. The Permian basin
navirus halted most travel, smaller or no premiums for debts to find oil and gas us- LeBlanc said. stretches from the northern
obliterating demand for their companies than they ing unconventional, costly There were a flurry of deals reaches of Texas across the
fuel. had received in the past," techniques. Those massive in the third quarter, which New Mexico border.
The price for a barrel of said PeterMcNally, global debts are now coming could be the start of a "Through this combination,
crude is down more than sector lead for industrials, due, and it's catching up long-overdue consolida- we are joining a diversi-
30% since the start of the materials and energy at with the companies that tion phase, said Stewart fied energy company with
year, and it has been hov- Third Bridge Group. were most aggressive. Glickman, energy equity even more scale and re-
ering around $40 a barrel, The combination, which is More than 200 oil produc- analyst at CFRA. sources to create share-
below what most produc- expected to close in the ers have filed for bankrupt- A tie-up with ConocoPhil- holder value in today's
ers in the U.S. need to break first quarter of next year, cy protection in the past lips was expected after ru- markets and beyond," said
even. could help the companies five years. mors of talks began to sur- Tim Leach, chairman and
In this year's third quarter, achieve $500 million in an- ConocoPhillips was more face, but analysts at CFRA CEO of Concho Resources,
17 oil and gas producers nual cost and capital sav- conservative about growth, were surprised that Con- in a prepared statement.
filed for bankruptcy pro- ings by 2022. and was sometimes per- cho's board agreed to the Concho's common stock
tection, which was a 21% The companies did not say ceived as slow, said Raoul acquisition, Glickman said. will be exchanged for 1.46
increase compared to last how the cost savings would LeBlanc, vice president of Concho "has the advan- shares of ConocoPhillips.
year according to law firm be achieved, and did not North American uncon- tage of a large acreage Shares of both companies
Haynes and Boone. respond to requests for ventionals at IHS Markit. position in the Permian Ba- rose slightly Monday.q

Report showing gains in bank access overshadowed by COVID

By KEN SWEET outside the traditional bank tell the full story, mostly be-
AP Business Writer system. While a small num- cause racial and ethnic
CHARLOTTE, N.C. (AP) — ber of Americans choose minorities are dispropor-
More Americans than ever not to have a bank ac- tionately more likely to be
obtained a basic bank ac- count due to their distrust unbanked. The FDIC study
count in 2019, the Federal of the banking system, shows only 2.5% of white
Deposit Insurance Corp. most unbanked are in pov- households are unbanked,
said Monday. But data was erty and more likely to be while 13.8% of Black house-
gathered before the out- Black and Latino, a rem- holds and 12.2% of Hispan-
break of the coronavirus nant of the systemic racism ic households are consid-
pandemic and start of this that plagues the financial ered unbanked. Roughly
historic recession. system. The FDIC estimates one out of four households
But the agency noted that that 5.4% of Americans in making less than $15,000 a
the loss of jobs and incomes 2019 were considered un- year do not have a bank
due to the pandemic in banked, a record low for account.
2020 likely reversed these that metric since the report The FDIC was unable to give In this March 24, 2020 file photo, a Chase bank employee,
positive trends. started in 2009, down from an estimate on how much right, disinfects the branches ATMs to fend off coronavirus as
The FDIC study looks at the 6.5% in 2017 which is when the COVID pandemic has a customer uses another in the Flushing neighborhood of the
unbanked — Americans the FDIC looked at the un- moved banked Americans Queens borough of New York. Associated Press
who do not have a basic banked. That is equal to into the unbanked, but it
checking or savings ac- roughly 7.1 million house- almost certain that figure millions of Americans to lose hit a record high of 8.2% in
count — and the reasons holds, the FDIC said. is climbing currently. The their bank account, and 2011 in the aftermath of the
why these individuals are The 5.4% figure does not Great Recession caused the number of unbanked financial crisis.q