Houston-based Occidental Petroleum said Monday it agreed to purchase Midland-based oil and gas producer CrownRock in a cash-and-stock transaction valued at about $12 billion. Occidental said CrownRock’s more than 94,000 net acres of “premium stacked pay assets and supporting infrastructure are well positioned alongside Occidental’s legacy Midland Basin business.” This acquisition complements and enhances Occidental’s Permian portfolio with the addition of about 1,700 undeveloped locations and about 170,000 boed of high-margin, lower-decline unconventional production in 2024. It increases Oxy’s Permian unconventional sub-$40 breakeven inventory by 33 percent.
Vicki Hollub, president and CEO, said, “We believe the acquisition of CrownRock’s assets adds to the strongest and most differentiated portfolio that Occidental has ever had. 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.” Oxy plans to sell from $4.5 billion to $6 billion of domestic assets in the next 18 months.
Closing is expected in 2024Q1. The acquired assets are located primarily in Glasscock, Howard, Martin and Midland counties. The infrastructure includes four water recycling plants and 55 miles of freshwater pipelines. Projected 2024 capital spending on the CrownRock operations is forecast to be $900 million with five drilling rigs.
Enverus Intelligence Research said the deal is the latest evidence that U.S. shale inventories continue to gain in value. Privately-held CrownRock is a joint business of Lime Rock Partners and GOP megadonor Tim Dunn’s Crownquest Operating.