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

Occidental Petroleum said on Monday it would buy energy producer CrownRock in a cash-and-stock deal valued at $12bn, to boost its acreage in the oil-rich Permian basin.

The CrownRock deal will give Occidental more than 94,000 net acres in the Midland basin in Texas – part of the Permian, the largest US oil-producing area.

The purchase is the latest in a series of big takeovers in the oil and gas industry. In October ExxonMobil agreed to buy the shale group Pioneer Natural Resources for $59.5bn and Chevron announced plans to buy the oil producer Hess Corporation in a $53bn deal.

Houston-based Occidental will finance the purchase with $9.1bn of new debt, the issuance of about $1.7bn of common equity and the assumption of CrownRock’s $1.2bn of existing debt.

The deal is expected to close in the first quarter of 2024.

Occidental president and chief executive officer Vicki Hollub said: “We are excited about combining CrownRock’s high-performing team into our organization and expect to continue Occidental’s exceptional operational and financial results for years to come.”

“Occidental’s purchase of CrownRock is a multi-win proposition for CrownRock, our employees and customers, and our community,” said CrownQuest operating chief executive officer Tim Dunn. “We congratulate Occidental and look forward to seeing their historically successful company continue to grow and prosper.”

Reuters contributed to this story.