Occidental Petroleum to buy CrownRock for $12B

NEW YORK, United States  -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.

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.

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.