Following the planned acquisition of Marathon Oil Corporation MRO in the recent past by ConocoPhillips COP, the former has now announced a major layoff from its Houston facility affecting about 500 employees. The company has filed a Worker Adjustment & Retraining Notification with the Texas Workforce Commission.
The company further indicated that the job status of the affected employees would be notified within a month of the close of the merger. While some of the employees will be retrained for transition roles, most are set to face permanent job losses. Although the scope and duration of transition roles are still being defined, more than half are expected to extend beyond six months.
Details of COP’s $22.5B Acquisition of MRO
ConocoPhillips, in May 2024, announced an accord with Marathon Oil to acquire it in an all-stock transaction valued at $22.5 billion. The deal, expected to close in the fourth quarter of 2024, will add to COP’s extensive unconventional oil portfolio. The acquisition will add a high-quality inventory at a low cost and help the company achieve its financial and operational goals. The deal is expected to become attractive for shareholders as it is anticipated to enhance earnings, cash flows and per-share distributions.
Transition and Synergy
Although the merger is a strategic move for the company to expand its portfolio and streamline its operations, it is challenging for the employees who are about to face layoffs. Both companies share similar values focused on safe operations and long-term shareholder value; therefore, the merger would improve performance and reduce operating costs.
MRO and COP’s Zacks Rank and Key Picks
Houston, TX-based Marathon Oil Corporation is a leading oil and natural gas exploration and production company with operations in the United States and Africa. Currently, MRO has a Zacks Rank #4 (Sell).
Headquartered in Houston, TX, ConocoPhillips is involved in the exploration and production of oil and natural gas. Currently, COP has a Zacks Rank #3 (Hold).
Investors interested in the energy sector might look at some better-ranked stocks like Smart Sand, Inc. SND and Nine Energy Service, Inc. NINE.While Smart Sand currently sports a Zacks Rank #1 (Strong Buy), Nine Energy carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Smart Sand produces northern white raw frac sand for the oil and gas industry. It offers proppant and related logistics services for oil and gas recovery from unconventional wells. SND’s expected EPS (earnings per share) growth rate for the next quarter is 125%, which compares favorably with the industry's growth rate of 13.68%.
Nine Energy Service provides onshore completion and production services for unconventional oil and gas resource development. NINE’s expected EPS growth rate for the next year is 35.77%, which compares favorably with the industry's growth rate of 19.80%.
Research Chief Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.
Free: See Our Top Stock And 4 Runners UpConocoPhillips (COP) : Free Stock Analysis Report
Marathon Oil Corporation (MRO) : Free Stock Analysis Report
Smart Sand (SND) : Free Stock Analysis Report
Nine Energy Service, Inc. (NINE) : Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
