Occidental has wrapped up the previously announced $12bn acquisition of US-based Midland Basin oil and gas producer CrownRock.
Announced in December 2023, the cash and stock deal enables Occidental to expand its holdings by acquiring over 94,000 net acres. These assets, which include premium stacked pay resources and supporting infrastructure, are strategically positioned to complement Occidental’s existing Midland Basin operations.
Occidental President and CEO Vicki Hollub said: “By completing this transaction, Occidental adds assets that we believe make the best portfolio in our company’s history even stronger and more differentiated.
“We also welcome new team members who will combine with ours to form a high-performing employee base that is focused on safely and efficiently developing low-emission, low-cost energy.”
Before the acquisition, CrownRock was a joint venture between upstream company CrownQuest Operating and private equity firm Lime Rock Partners. CrownRock was established in 2007.
Occidental anticipates that the acquisition will enhance its Permian portfolio, integrating approximately 170 thousand barrels of oil equivalent per day (Mboed) of high-margin, lower-decline unconventional production by 2024. The deal also includes around 1,700 undeveloped locations.
With this acquisition, Occidental expects to see increased free cash flow on a diluted share basis, forecasting $1bn in the first year, assuming a West Texas Intermediate (WTI) price of $70 per barrel.
At the time of the acquisition announcement, Occidental stated that the consideration would be funded through $9.1bn in new debt, approximately $1.7bn in common equity, and by assuming CrownRock’s existing debt of $1.2bn.
Additionally, Occidental indicated that Colombian energy company Ecopetrol would not acquire a potential 30% stake in CrownRock. According to a regulatory filing filed last month, Occidental had been in discussions with Ecopetrol regarding the purchase of this stake by the latter for $3.6bn.
The completion of the CrownRock acquisition comes shortly after Occidental’s $818m sale of certain Delaware Basin assets to Permian Resources. This deal, announced in late July, involves the divestiture of nearly 29,500 net acres, around 9,900 net royalty acres, and approximately 15,000 barrels of oil equivalent per day (Boe/d) of production from both the Barilla Draw field in Texas and the New Mexico Delaware Basin.
