Occidental is in talks to sell a 30% stake in CrownRock, a significant asset in the oil and gas sector. This development follows Occidental’s agreement to acquire CrownRock for approximately $12 billion last December. The deal, valued at around $3.6 billion, includes various purchase price adjustments.
The negotiations take place under the umbrella of a joint venture established by Occidental and Ecopetrol in 2019 for developing and operating oil and gas assets in the Midland basin. This agreement gave each company the right to invest in assets acquired by the other in areas of mutual interest. In late May,
Ecopetrol confirmed its intention to buy the 30% stake.
Occidental executives expect a successfully negotiated deal to be worth $3.6 billion, which they plan to use to pay down some of the company’s debts. As of March, Occidental had about $18.5 billion in long-term debt, which accounted for about 60% of its shareholders’ equity.
CrownRock had revenues of $2.5 billion in 2023 and is expected to produce approximately 170,000 barrels of oil equivalent per day in 2024 from its 94,000 acres in the Permian basin. At the time of the purchase announcement, Occidental planned to divest between $4.5 billion and $6 billion worth of US assets by mid-2025.
Shares of Occidental (Ticker: OXY) were down by nearly 2% on July 22, trading at around $62. Over the past six months, shares have risen about 10%, increasing the company’s market capitalization to $55 billion.
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**Additional Reading:**
– Occidental to Acquire CrownRock, Strengthening its U.S. Onshore Portfolio with Premier Permian Basin Assets.
– CrownRock