Occidental to acquire CrownRock in USD12 billion deal

Occidental Petroleum has announced its strategic acquisition of CrownRock, in a cash and stock transaction valued at approximately USD12.0 billion, including the assumption of CrownRock’s debt. Midland, Texas, U.S.A.-based oil and gas producer CrownRock L.P. is a joint venture of CrownQuest Operating LLC and Lime Rock Partners.

Occidental, based in Houston, Texas, is one of the largest oil and gas producers in the U.S., including a leading producer in the Permian and DJ basins, and offshore Gulf of Mexico.

The move significantly bolsters Occidental’s U.S. onshore portfolio with high-quality assets in the Permian Basin. The acquisition 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.

This acquisition marks a major step for Occidental in strengthening its position in the U.S. onshore sector. The Permian Basin, known for its rich oil reserves, is a key area for energy companies. By acquiring CrownRock, Occidental not only expands its operational footprint but also enhances its production capabilities in one of the most prolific oil-producing regions in the United States.

CrownRock, a prominent player in the Permian Basin, has established itself with a portfolio of premier assets. These assets are known for their high productivity and potential for further development. The integration of CrownRock’s assets into Occidental’s portfolio is expected to drive significant operational synergies and boost overall production efficiency.

Occidental’s strategic vision

Occidental’s acquisition aligns with its long-term strategy to optimise its asset base, focusing on areas with high-return potential. The company has been actively pursuing opportunities to expand its core operations, and the CrownRock acquisition is a testament to this strategic direction. This move is anticipated to deliver substantial value to Occidental’s shareholders and play a crucial role in its growth trajectory.

The acquisition underscores the ongoing consolidation in the industry, where companies are seeking to strengthen their portfolios through strategic acquisitions. The Permian Basin, in particular, has been a focal point for such activities, given its status as a major oil-producing region.

With the integration of CrownRock’s assets, Occidental is poised to become a more dominant player in the U.S. onshore oil and gas sector. The company is expected to leverage CrownRock’s existing infrastructure and expertise to enhance its operational efficiencies and scale up production. This acquisition is a clear indicator of Occidental’s commitment to solidifying its presence in key oil-producing regions and driving sustainable growth.