ConocoPhillips is buying Marathon Oil in an all-stock deal valued at approximately $17.1 billion.
The deal 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.
As part of the 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 complementary acreage to its existing U.S. onshore portfolio.
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.
