(Reuters) – Occidental Petroleum (OXY.N) said on Monday it would buy energy producer CrownRock in a cash-and-stock deal valued at $12 billion, to boost its acreage in the oil-rich Permian basin.
Houston-based Occidental will finance the purchase with $9.1 billion of new debt, the issuance of about $1.7 billion of common equity and the assumption of CrownRock’s $1.2 billion of existing debt.
The deal, expected to close in the first quarter of 2024, will immediately add to Occidental’s free cash flow, it said.
The CrownRock deal will give Occidental more than 94,000 net acres in the Midland basin in Texas – part of the Permian, the largest U.S. oil-producing area.
Shares of Occidental fell 1.2% in premarket trading.
Reuters first reported in September that CrownRock was preparing to explore a sale that could value it at well over $10 billion including debt.
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