Occidental CEO Vicki Hollub speaks at the panel dicscussion during the Abu Dhabi International Petroleum Exhibition and Conference held at ADNEC Exhibition Center on October 2, 2023. (Photo by Ryan LIM / AFP) (Photo by RYAN LIM/AFP via Getty Images)
Occidental PetroleumOXY (Oxy) said Monday it would acquire the assets of privately held CrownRock in a stock-and-cash deal valued at $12 billion. The acquisition adds more than 1700 new potential locations to the shale giant’s drilling prospect inventory along with 170 thousand barrels of oil per day equivalent (Mboed) in existing production.
It’s another bolt-on acquisition by one of the Permian Basin’s majors of leasehold and drilling prospects that are highly contiguous to Oxy’s existing asset base in the Midland Basin, which makes up the eastern third of the greater Permian Basin region. As with recent major deals by ExxonMobilXOM, ChevronCVX and others, the idea is to purchase contiguous operations that maximize the ability to streamline operations and cut costs via taking advantage of improved economies of scale.
“We believe the acquisition of CrownRock’s assets adds to the strongest and most differentiated portfolio that Occidental has ever had. We found CrownRock to be a strategic fit, giving us the opportunity to build scale in the Midland Basin and positioning us to drive value creation for our shareholders with immediate free cash flow accretion,” Occidental President and Chief Executive Officer Vicki Hollub said in a release. “We are excited about combining CrownRock’s high-performing team into our organization and expect to continue Occidental’s exceptional operational and financial results for years to come.”
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