The move from one of America’s largest independent oil explorers would be a bold bet on shale during an historic industry downturn, noted Bloomberg in its report.
The companies may announce a deal in the next few weeks. No final decision has been made and talks could fall through.
Shares of Concho Resources rose 12.49% to $49.65 in trading Wednesday. ConocoPhillips was up 1.06% to $35.25.
Concho Resources has a market value of about $8.8 billion, while the market cap for ConocoPhillips is nearly $38.2 billion.
ConocoPhillips, Bloomberg said, has been hinting about a potential deal for months. In July, CEO Ryan Lance said the company was encouraged by the low premiums needed for acquisitions in the shale sector, citing Chevron’s (CVX) - Get Chevron Corporation Report deal to buy Noble Energy (NBL) - Get Noble Energy, Inc. (NBL) Report for about $5 billion.
“We’re looking at asset deals, we’re looking at asset deals, we’re looking at corporate deals, we look across the board,” Lance told Bloomberg at the time.
Chevron announced in July that it reached an agreement to acquire Noble Energy amid one of the most difficult routs in the oil patch in decades, sparked by the coronavirus pandemic.
Buying Houston-based Noble, which has both U.S. and international operations, compliments Chevron’s presence in the oil-rich deposits of the DJ Basin of Colorado and Permian Basin, which span West Texas and New Mexico.
It also gives Chevron assets in the eastern Mediterranean and West Africa.