Occidental Petroleum
announced it will acquire energy producer CrownRock in a deal valued at $12 billion.
Occidental
said Monday that the acquisition will help increase the company’s position in the Midland Basin, and will add 170,000 barrels of oil per day to the company’s production. The Midland Basin is part of the oil-rich Permian Basin in west Texas and southeastern New Mexico.
“We believe the acquisition of CrownRock’s assets adds to the strongest and most differentiated portfolio that Occidental has ever had,” Chief Executive Vicki Hollub said in the release. “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 said it plans to pay for the $12 billion acquisition through the purchase of $9.1 billion of new debt, and the issuance of about $1.7 billion of common equity. It also will assume CrownRock’s $1.2 billion of existing debt.
The deal is expected to close in the first quarter of 2024.
Energy acquisitions have been hot this year with large oil producers looking to expand their assets.
Exxon Mobil
announced in October that it would be acquiring
Pioneer Natural Resources
for a whopping $64.5 billion.
Chevron
said October that it agreed to buy
Hess
for $53 billion.
Occidental also said that it would be raising its quarterly dividend by 4 cents to 22 cents a share.
Shares of Occidental were up 0.7% Monday to $56.87. The stock has fallen 10% this year.
Write to Angela Palumbo at [email protected]
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