ConocoPhillips and Concho Resources have announced that they have entered into a definitive agreement to combine companies in an all-stock transaction for a total of $9.7 billion in an attempt to further consolidate the shale industry, according to a press release

The deal sees the merging of two high-level industry leaders to create a company with an enterprise value of $60 billion.  

Ryan Lance, CEO of ConocoPhillips, said, “Concho is a tremendous fit with ConocoPhillips. Together, ConocoPhillips and Concho will have unmatched scale and quality across the important value drivers in our business: an enviable low cost of supply asset base, a strong balance sheet, a disciplined capital allocation approach, ESG excellence, and great people.”

The asset portfolio will now mean a combined resource base of approximately 23 billion barrels of oil equivalent (boe). Furthermore, ConocoPhillips and Concho expect to capture $500 million of annual cost and capital savings by 2022.

In the terms of the deal, common stock will be exchanged for a fixed ratio of 1.46 shares of ConocoPhillips common stock, representing a 15% premium to closing share prices on October 13.