Occidental Petroleum (OXY) has announced that it is buying privately held energy producer CrownRock in a deal worth $12 billion U.S.
In a news release, Occidental said that the acquisition will boost its acreage in the oil-rich Permian basin located in Texas.
Occidental Petroleum added that it will finance the purchase with $9.1 billion U.S. of new debt, the issuance of $1.7 billion U.S. of common stock, and the assumption of CrownRock's $1.2 billion U.S. of existing debt.
The deal is expected to close in the first quarter of 2024 and will be immediately accretive to Occidental Petroleum's cash flow, the company said.
The CrownRock deal will provide Occidental Petroleum with more than 94,000 net acres of land in the Permian basin, which is the largest oil area in America.
Shares of Occidental Petroleum declined 1.2% on news of the deal. Year-to-date, the company’s stock is down 8% amid a steady decline in crude oil prices.
CrownRock is privately held, and its stock does not trade on a public exchange.
