(Reuters) – ConocoPhillips COP.N said on Monday it will buy Permian-focused driller Concho Resources Inc CXO.N for $9.7 billion, the largest shale deal this year as oil and gas producers turn to consolidation to survive a slowdown in oil prices and demand.

The all-stock deal comes as U.S. shale companies have posted big losses due to weak crude prices amid the COVID-19 pandemic and have struggled to raise new capital to restructure debt.

Concho shareholders will receive 1.46 shares of ConocoPhillips for each share held.

The deal for $49.30 per share, represents a 1.4% premium to Concho’s closing close on Friday, according to Reuters calculations.

Together, the companies expect to capture $500 million of annual cost and capital savings by 2022.