Occidental Petroleum to buy CrownRock in $US12 billion acquisition

The news: Occidental Petroleum announced it has entered into an agreement to acquire West Texas oil and gas producer CrownRock for USD12 billion ($18.26 billion).

The numbers: To finance the deal which is expected to close in Q1 2024, Occidental will issue USD9.1 billion of new debt, as well as approximately USD1.7 billion of common equity, and will assume USD1.2 billion of CrownRock’s existing debt.

The context: The purchase will allow Occidental access to CrownRock’s 94,000 net acres of the oil-rich Basin, 1,700 undeveloped locations, and will add around 170,000 barrels of oil equivalent per day to its 2024 production. The purchase would bolster Occidental as the second largest producer in the US South West’s Permian Basin, with first place going to Exxon following its USD64.5 billion acquisition of Pioneer in October. 2023 has seen a flurry of consolidations across energy markets, with Chevron acquiring Hess, for USD53 billion that same month.

Last week Australia’s liquified natural gas producers Woodside and Santos also confirmed that they have entered early discussions to consider a merger.