- Acquisition, valued at approximately
$12.0 billion , generates immediate free cash flow accretion - CrownRock’s well-positioned assets expand Occidental’s scale in the
Midland Basin - CrownRock’s development-ready inventory high-grades Occidental’s premier
Permian Basin portfolio and increases low-breakeven inventory - Expected to add high-margin, lower-decline unconventional production of approximately 170 Mboed in 2024
- Supports quarterly dividend increase of 22% to
$0.22 per share - CrownRock’s operating team has a strong track record of running safe, efficient and highly productive assets and adds to Occidental’s capabilities
Highlights include:
- Expected to deliver increased free cash flow on a diluted share basis, including
$1 billion in the first year based on$70 per barrel WTI - Complements and enhances Occidental’s premier Permian portfolio with the addition of approximately 170 thousand barrels of oil equivalent per day (Mboed) of high-margin, lower-decline unconventional production in 2024, as well as approximately 1,700 undeveloped locations
- Increases Occidental’s Permian unconventional sub-$40 breakeven inventory by 33%
- CrownRock’s over 94,000 net acres of premium stacked pay assets and supporting infrastructure are well positioned alongside Occidental’s legacy
Midland Basin business - Increased cash flow, along with proceeds from a new
$4.5-$6.0 billion divestiture program, will enable Occidental to reduce its debt principal by at least$4.5 billion within 12 months and expect to retain its investment grade credit ratings - Combined position builds upon Occidental’s subsurface understanding and leading well performance, while providing operational flexibility and upside
Occidental also announced its intention to increase the quarterly common stock dividend per share by
“We believe the acquisition of CrownRock’s assets adds to the strongest and most differentiated portfolio that Occidental has ever had. We found
“Occidental’s purchase of
Transaction Details
The transaction’s total consideration is approximately
Additional Highlights
- 1,700 undeveloped locations, including 1,250 development-ready at sub-$60 WTI breakeven
- 750 locations are sub-$40 WTI breakeven, increasing Occidental’s
U.S. Onshore sub-$40 breakeven inventory by 25% - Greater basin diversification at top end of portfolio advances corporate returns and optionality
- Well-understood and rich subsurface is adjacent to some of the most prolific wells in the basin
- Majority of inventory is located in largely clean and undeveloped sections, providing ample opportunity for Occidental customization and upside
- Substantive surface acreage of nearly 10,000 acres, along with hundreds of miles of gathering and water infrastructure, provides material operational efficiency
- Acquisition expected to advance Occidental’s water recycling capability with assets that include four recycling plants
- Nearly 100% operated position with high average working interest of 93% amplifies Occidental’s capabilities
- Added position enables Occidental to build upon its deep horizon Barnett well performance leadership, in which new well production was 34% better than basin average
Conference Call / Webcast
Occidental will hold a conference call to discuss the acquisition at
Additional details are available in a presentation on the investor section on www.oxy.com.
Advisors
Occidental’s financial advisor is
CrownRock’s joint-lead financial advisors are
About Occidental
Occidental is an international energy company with assets primarily in
About CrownQuest Operating
CrownQuest Operating is a privately owned company based in
About
Since its inception in 1998, Lime Rock Management has raised over
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to statements about Occidental’s expectations, beliefs, plans or forecasts. Future declarations of quarterly dividends and the establishment of future record and payment dates are at the discretion of Occidental’s Board of Directors and will be based on a number of factors, including Occidental's future financial performance and other investment priorities. All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including, but not limited to: any projections of revenue or other financial items or future financial position or sources of financing; any statements of the plans, strategies and objectives of management for future operations or business strategy; any statements regarding future economic conditions or performance; any statements of belief; and any statements of assumptions underlying any of the foregoing. Words such as “estimate,” “project,” “will,” “should,” “could,” “may,” “anticipate,” “plan,” “intend,” “believe,” “expect,” “target,” "commit," "advance," or similar expressions that convey the prospective nature of events or outcomes are generally indicative of forward-looking statements. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release unless an earlier date is specified. Unless legally required, Occidental does not undertake any obligation to update, modify or withdraw any forward-looking statements as a result of new information, future events or otherwise.
Forward-looking statements involve estimates, expectations, projections, goals, forecasts, assumptions, risks and uncertainties. Actual outcomes or results may differ from anticipated results, sometimes materially. Factors that could cause actual results to differ include, but are not limited to: the ultimate outcome of the acquisition of
Additional information concerning these and other factors that may cause Occidental’s results of operations and financial position to differ from expectations can be found in Occidental’s filings with the
Contacts
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Source: Occidental
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