US oil company Occidental Petroleum has reached a deal to buy rival American energy producer CrownRock for $12 billion, it announced Monday in a statement.
The acquisition, which will strengthen Occidental’s position in the Permian Basin — the largest oil producing region in the United States — is the latest in a series of acquisitions made by energy giants in recent months as the sector consolidates.
The…
US oil company Occidental Petroleum has reached a deal to buy rival American energy producer CrownRock for $12 billion, it announced Monday in a statement.
The acquisition, which will strengthen Occidental’s position in the Permian Basin — the largest oil producing region in the United States — is the latest in a series of acquisitions made by energy giants in recent months as the sector consolidates.
The assets of privately-held CrownRock will expand Occidental’s scale in a region, including Permian’s Midland Basin, that has made Texas the top oil producing US state.
Occidental president and chief executive Vicki Hollub called the deal a “strategic fit.”
“We believe the acquisition of CrownRock’s assets adds to the strongest and most differentiated portfolio that Occidental has ever had,” Hollub said in the statement.
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The transaction, which requires regulatory approvals, is expected to close in the first quarter of 2024.
Occidental said it would finance the purchase with $9.1 billion in new debt, the issuance of about $1.7 billion of common equity and the take-on of CrownRock’s $1.2 billion of existing debt.
The US oil industry in recent months has seen an increasing number of large-scale transactions, buoyed by a strong cash position following substantial profits in 2022.
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In October ExxonMobil said it was buying out rival Pioneer Natural Resources for some $60 billion — in a similar bid to strengthen position in the coveted Permian Basin.
A few days later energy giant Chevron announced the purchase of oil and gas producer Hess for $53 billion.
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