Occidental Petroleum is buying CrownRock for $12 billion

CrownRock is in focus this morning after Occidental Petroleum Corp (NYSE: OXY) said it will buy the energy producer for about $12 billion.

Details of Occidental-CrownRock deal

The hydrocarbon exploration giant will issue $1.7 billion worth of stock and $9.1 billion of debt to finance the acquisition.

On Monday, Occidental revealed plans of lifting its quarterly dividend as well to 22 cents per share in 2024. Vicki Hollub – its Chief Executive said in a press release today:

We found CrownRock to be a strategic fit to build scale in the Midland Basin and positioning us to drive value creation for our shareholders with immediate free cash flow accretion.

The announcement arrives about a month after Occidental Petroleum reported its financial results for the third quarter that handily topped Street estimates.

CrownRock says it’s a ‘multi-win proposition’

Note that the Midland Basin made up 15% of the crude the United States produced in 2020, as per the Energy Information Agency. CrownRock has a 100,000-acre position in that Basin.

The oil driller expects the deal with Occidental Petroleum that it dubbed a “multi-win proposition” in its press release today to complete in the first quarter of the coming year.

CrownRock produced 140,000 oil-equivalent barrels a day in 2022 – more than double what it produced per day in 2019.

Earlier this year, Occidental Petroleum spent $1.1 billion on buying Carbon Engineering as Invezz reported here. Shares of the New York listed firm are currently trading near their year-to-date low.