Permian Resources has agreed to acquire certain Delaware Basin assets in the US states of Texas and New Mexico from Occidental for a price of around $818m.
Through the deal, the Texas-based Permian Resources will add 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 in both the Barilla Draw field in Texas and the New Mexico Delaware Basin.
The large, contiguous acreage position directly offsets its current position in Reeves County, said the New York Stock Exchange (NYSE) listed oil and natural gas company.
The acreage requires minimal future drilling and is approximately 99% held by production.
Permian Resources said that it has identified over 200 gross operated locations, that are immediately competitive for capital investment. Development on these acquired properties is anticipated to commence in Q4 2024.
Total production for this period is projected to be around 15MBoe/d, with approximately 55% derived from oil.
The assets acquired in Reeves County also come with a fully integrated midstream system, offering enhanced economic efficiency and flexibility. The infrastructure includes over 160km of operated oil and gas gathering systems and spans over 10,000 surface acres.
Additionally, the acquisition includes water infrastructure, such as saltwater disposal wells, frac ponds, a recycling facility, and water wells.
Permian Resources co-CEO Will Hickey said: “This acquisition is a natural fit for us given its high-return inventory and proximity to our current operated position.
“As the Delaware Basin’s low-cost leader, we are highly confident that our team will be able to leverage its operational expertise of the asset to significantly reduce costs and drive meaningful synergies, maximising value for our shareholders.”
Occidental has disclosed that it has finalised several asset sales amounting to approximately $152m this year. In addition to the latest transaction, the company intends to use the proceeds to lower its net debt.
Previously, Occidental announced a divestiture initiative valued between $4.5bn and $6bn, which is set to be completed within 18 months following the $12bn acquisition of Midland Basin oil and gas producer CrownRock, anticipated to close in August 2024.
Occidental president and CEO Vicki Hollub said: “We are pleased with the significant progress to date on our divestiture program, which is aimed at derisking the financing of the CrownRock acquisition and accelerating our shareholder return pathway.”
Subject to customary closing conditions, the transaction with Permian Resources is expected to close by the end of Q3 2024. Occidental engaged RBC Capital Markets as its financial adviser while its legal adviser was White & Case.
