One of the winners in Occidental Petroleum’s $12 billion purchase of CrownRock LP wasn’t part of the transaction.
Amid asset consolidation and the implementation of a debt reduction plan, Oxy moved to divest up to $6 billion in assets.
That’s when Permian Resources swooped in, picking up 30,000 acres in the Barilla Draw field for $817.5 million. The purchase closed in September.
“This is an asset we identified and did a bunch of work on and tried to buy from Oxy back during COVID,” Permian Resources Founder and co-CEO Will Hickey said Nov. 21 at Hart Energy’s Executive Oil Conference & Expo in Midland. “Unfortunately, they were too smart and wouldn’t sell it to us at that price deck. But as time went around and they landed the big CrownRock deal, they were willing to part with it.”
Hickey said the field delivers 15,000 bbl/d. It’s mostly in Reeves County, Texas, in the Permian’s Delaware Basin.
“This is an asset that we just plug in our best practices,” he said. “That was a property that was high-value to us and low-value to Oxy, which was kind of a sweetener that allowed that deal to get done.”
Permian’s cost structure in the Delaware Basin is a major competitive advantage, Hickey said. He expects more growth.
“We’ve been doing this 10 years now, and our ability to compound returns and grow value in the Delaware because of our cost structure doesn’t feel like it’s going anywhere,” he said. “Whether that happens for five more years, 10 more years or 20 more years, we’ve got a young team excited to do it.”