Occidental Petroleum
Jay L. Clendenin | Los Angeles Times | Getty Images
Occidental Petroleum has agreed to buy CrownRock, a serious privately held power producer that operates within the Permian Basin, for $12 billion.
The deal is newest in a spate of consolidation within the U.S .power sector, significantly within the Permian, the most important oil-producing area within the U.S.
CrownRock is creating a 100,000 acre place within the Midland Basin, a portion of the Permian that spans 20 counties in western Texas. The Midland Basin produced 15% of U.S. crude in 2020, in accordance to the U.S. Energy Information Agency.
Occidental will subject $9.1 billion in debt and about $1.7 billion in widespread inventory to finance the transaction.
Separately, Occidental mentioned it’s elevating its quarterly dividend to 22 cents a share from 18 cents a share starting subsequent yr.
Led by Texas billionaire Timothy Dunn, CrownRock produced 140,000 of barrels per day of oil equal within the third quarter of 2022, up from 66,000 barrels per day in 2019, in accordance to a January report from Fitch Ratings.
CrownRock is among the final main non-public producers within the Permian alongside Endeavor Resources. The firm is backed by the Houston-based non-public fairness agency Lime Rock Partners.
Occidental is the ninth largest power firm within the U.S. with a market capitalization of $49.7 billion. Warren Buffett’s Berkshire Hathaway owns a few 26% stake within the firm. Occidental’s inventory is down 10% this yr.
The firm’s final main acquisition was its buy of Anadarko Petroleum for $55 billion in 2019. Occidental’s buy of Anadarko sparked a bitter dispute with activist investor Carl Icahn, who bought the rest of his stake within the firm in 2022.
Occidental’s buy of CrownRock is the third main deal within the power sector in lower than two months.
Exxon Mobil introduced in October that it’s buying Pioneer Natural Resources for about $60 billion. Pioneer is the most important producer within the Midland Basin, in accordance to Enverus.
Weeks later, Chevron introduced it had agreed to purchase Hess for $53 billion.