Search

Oil & Gas

Thursday
09 May 2024

Occidental Petroleum Says Crownrock Deal Could Close by August

09 May 2024   

The logo for Occidental Petroleum is displayed on a screen on the floor at the New York Stock Exchange (NYSE) in New York, U.S., April 30, 2019. REUTERS/Brendan McDermid/File Photo Purchase Licensing Rights
Occidental Petroleum (OXY.N), opens new tab hopes to close its acquisition of shale oil producer CrownRock before its second-quarter earnings call, CEO Vicki Hollub said on Wednesday. The event typically falls in early August.

Occidental in December proposed to buy Permian producer CrownRock in a $12 billion cash-and-stock deal including debt. It wants to expand its presence in the largest U.S. oilfield as part of a wider consolidation wave among shale producers.

"By that time, I believe, we will have closed," Hollub told analysts, in response to a question on when the company expects to incorporate CrownRock into its oil production guidance.

The company is answering a second request for information on the acquisition by U.S. regulators and does not anticipate any impediments, Hollub said.

Excluding the acquisition, Occidental said it plans to increase oil production in the Permian Basin from current operations by 18,000 barrels per day in the second half of 2024, with gains in efficiency allowing it to reduce the rig count, onshore operations executive Richard Jackson said.

Its first-quarter profit beat analysts' consensus estimate on better-than-expected oil output. But shares fell more than 2% to close at $63.68 on Wednesday.

Occidental reaffirmed its plans to sell $4.5 billion to $6 billion of assets within 18 months of closing the CrownRock purchase. Proceeds will help reduce the company's principal debt to $15 billion or below. Occidental plans to resume its share buybacks after its debt target is met.

"Assets within our portfolio have garnered much interest, and our teams have commenced the early stages of the divestiture process," Hollub said.

Occidental hopes "that high level of interest translates into appropriate levels of offers" for the assets, Hollub added.

"It all comes down to valuation, and that is going to make the difference for us because we do have options," she said.

Keywords

More News

Loading……