NorthAmOil: Occidental to acquire CrownRock for $12bn

In the latest mega-deal, Occidental Petroleum has announced a $12bn cash and stock agreement to acquire the privately held West Texas producer CrownRock as consolidation in the Permian Basin continues to heat up. More deals are expected, say experts.

Occidental said the acquisition would strengthen its US onshore portfolio with premier Permian Basin assets, expanding its scale in the prolific and liquids-rich Midland Basin.

The Permian, in Texas and New Mexico, offers a prime opportunity for consolidation. It is well-endowed with both oil and infrastructure, and is positioned near the Gulf Coast.  CrownRock is one of the largest private operators in the Permian, along with Endeavor Energy Resources, and was a leading target for a take-over.

The CrownRock deal, said Occidental, is expected to add high-margin, lower-decline unconventional production of around 170,000 barrels of oil equivalent (boe) in 2024 as well as approximately 1,700 undeveloped locations.

It will also increase Occidental’s Permian unconventional sub-$40 breakeven inventory by 33%, the company said. CrownRock’s more than 380.4 square km of premium stacked pay assets and supporting infrastructure are well positioned alongside Occidental’s legacy Midland Basin business, added Occidental.

Occidental said it will take on $9.1bn of new debt, would issue around $1.7bn of common equity and adopt CrownRock’s $1.2bn in existing debt. The transaction is expected to close in the first quarter of 2024.