Occidental Petroleum to buy Permian producer CrownRock in $12bn deal

Occidental Petroleum said on Monday that it has agreed to buy CrownRock, a privately-held oil and gas producer that operates in the Permian basin, for around $12bn.

The deal is expected to deliver increased free cash flow on a diluted share basis, including $1bn in the first year based on $70 per barrel WTI.

Occidental said the acquisition complements and enhances its "premier" Permian portfolio with the addition of around 170, 000 barrels of oil equivalent per day of high-margin, lower-decline unconventional production in 2024, as well as about 1,700 undeveloped locations.

President and chief executive officer Vicki Hollub, 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 with immediate free cash flow accretion.

"We are excited about combining CrownRock’s high-performing team into our organisation and expect to continue Occidental’s exceptional operational and financial results for years to come."

Occidental also announced plans to lift its quarterly dividend per share by $0.04 to $0.22, starting with the February 2024 declaration.