After nearly eight months, Occidental Petroleum has sewn up its acquisition of Permian Basin E&P CrownRock LP. Occidental said in December it would acquire the company in a cash-and-stock deal valued at $12 billion, including debt.
Occidental has already started the process of reducing debt by a targeted $4.5 billion to $6 billion in asset sales. On July 29, the company agreed to sell its Delaware Basin Barilla Draw assets to Permian Resources in an $817.5 million deal.
The deal closed after Occidental said that its joint venture (JV) partner in the Midland Basin, Ecopetrol, declined to acquire interests in CrownRock LP, according to an Aug. 1 Securities and Exchange Commission filing. Under the terms of the companies’ JV agreement, the Colombian nation oil company had been in talks to acquire potentially 30% of CrownRock’s assets for an estimated $3.6 billion.
"By completing this transaction, Occidental adds assets that we believe make the best portfolio in our company's history even stronger and more differentiated,” Occidental President and CEO Vicki Hollub said in an Aug. 1 press release. “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."
CrownRock, a JV with CrownQuest Operating LLC and Lime Rock Partners, adds 1,700 undeveloped locations, with 1,250 development-ready at sub-$60 WTI breakevens, Occidental said. Of those locations, 750 break even at below $40 WTI, increasing Occidental’s U.S. onshore inventory with those economics by 25%.
The company said CrownRock would add high-margin, lower-decline unconventional production of approximately 170,000 boe/d in 2024.
The assets also include surface acreage of nearly 10,000 acres along with hundreds of miles of gathering and water infrastructure. The position is nearly 100% operated with an average working interest of 93%.