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Direct Investment  + Commodities  + Markets  |  December 11, 2023
Occidental Inks $12B Deal to Buy Permian Producer Crownrock
By: Joe Palmisano

Occidental Inks $12B Deal to Buy Permian Producer Crownrock

Occidental Petroleum will pay $12 billion in cash and stock for privately held Permian oil and gas producer CrownRock L.P., a joint venture of CrownQuest Operating LLC and Lime Rock Partners, marking the latest large acquisition in the U.S. oil industry.

Occidental, based in Houston, will finance the acquisition with $9.1 billion in new debt, $1.7 billion in common equity, and the assumption of CrownRock’s existing debt of $1.2 billion. The deal is expected to be completed in the first quarter of 2024.

The transaction, Occidental’s first since 2019, will immediately deliver free cash flow, including $1 billion in the first year based on $70 per barrel WTI. In 2024, it will add around 170,000 barrels of oil equivalent per day, as well as over 1,700 undeveloped areas.

The news is the latest in a string of high-profile purchases that are set to reshape the U.S. oil industry.

ExxonMobil announced a $60 billion buyout of shale rival Pioneer Natural Resources in October. Soon after, Chevron stepped in with a $53 billion bid to buy Hess, gaining access to the company’s unique position in the Guyana oil discoveries.

Occidental claims that by acquiring CrownRock, it will receive substantial development-ready and low-breakeven inventory in the Permian basin, where CrownRock owns over 94,000 net acres of premium pay assets and infrastructure.

“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,” said Occidental president and CEO Vicki Hollub.

Occidental also announced its intention to increase its quarterly dividend per share by $0.04 to $0.22 in February 2024.

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Inside The Story

Occidental Petroleum CrownRock L.P.

About Joe Palmisano

Joe Palmisano is Editorial Director for Connect Money, where he brings nearly three decades experience of market insights as a financial journalist, analyst and senior portfolio manager for leading financial publications, advisory firms, and hedge funds. In his role as Editorial Director, Joe is responsible for the selection of content and creation of daily business news covering the financial markets, including Alternative Assets, Direct Investment and Financial Advisory services. Before joining Connect Money, Joe was a financial journalist for the Wall Street Journal, regularly publishing feature stories and trend pieces on the foreign exchange, global fixed income and equity markets. Joe parlayed his experience as a financial journalist into roles as a Senior Research Analyst and Portfolio Manager, writing daily and weekly market analysis and managing a FX and US equity portfolio. Joe was also a contributing writer for industry magazines and publications, including SFO Magazine and the CMT Association. Joe earned a B.S.B.A. in Finance from The American University. He holds the Chartered Market Technician (CMT) designation and is a member of the CFA Institute.
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