A consolidation wave continues to wash over the oil patch. ExxonMobil kicked off the current boom in mergers and acquisitions last year with its recently closed $60 billion deal for Pioneer Natural Resources.

Rival Chevron followed with its acquisition of , which it hopes to close in the coming months. The sector has seen several smaller transactions as oil companies pair up to enhance their positions and reduce costs.

The latest industry tie-up will see ConocoPhillips (NYSE: COP) acquire Marathon Oil (NYSE: MRO) in a $22.5 billion all-stock deal (which includes the assumption of Marathon's $5.4 billion of net debt). The transaction will create a much larger-scale and lower-cost global oil and gas producer. And the combined company will generate more free cash flow, which it expects to return to investors via a rapidly rising dividend and meaningful share repurchase program.

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Source Fool.com