U.S. oil and gas producer Occidental Petroleum said on Monday it would sell certain Delaware Basin assets in Texas and New Mexico to Permian Resources for about $818 million, as it plans to cut down debt.
It also plans to divest some $152 million worth of assets, bringing its total year-to-date proceeds of closed or announced divestments to $970 million.
Occidental, which is planning to take on additional debt to fund its $12 billion takeover of rival CrownRock, has said it plans to sell up to $6 billion of assets within 18 months of closing the CrownRock deal. Occidental has debt of over $18 billion at the end of the first quarter.
Berkshire Hathaway owns a nearly 29% stake in Occidental.
The deal with Permian Resources, reported by Reuters last week, would consist of a total of 29,500 net acres in the Barilla Draw Field of the Permian Basin, the largest shale oil belt in the world, potentially boosting Permian Resources’ output by estimated combined net production of 15,000 barrels of oil equivalent per day (boepd) in the fourth quarter of 2024.
The Permian Resources deal is expected to close in the third quarter of 2024. A takeover of the Barilla Draw assets would be its largest since the company clinched a $4.5 billion deal for rival Earthstone Energy last year.
Permian Resources plans to report its second-quarter earnings on Aug.6, while Occidental is scheduled to announce it results on Aug. 8.
Source: Reuters.com