Occidental Petroleum Corporation (OXY) is reportedly in talks to acquire CrownRock, a major energy producer in the western Texas area of the Permian basin. The negotiations, which could potentially be worth over $10 billion in debt, are expected to conclude soon if discussions remain on track and no competing bidders emerge.
CrownRock, led by Texas billionaire Timothy Dunn and supported by private-equity firm Lime Rock Partners, holds over 80,000 net acres in Texas’ Midland Basin, a section of the Permian Basin, which is the top oil-producing area in the U.S. The company has established a prominent position in a highly sought-after area of the basin through strategic trades and land swaps, securing leases in the region before the shale boom.
Occidental Petroleum, with a market value of approximately $53 billion, last made a significant acquisition in 2019 when it purchased Anadarko for $38 billion. This deal resulted in substantial debt for the company and caught the attention of activist investor Carl Icahn. The potential acquisition of CrownRock would further expand Occidental’s presence in the Permian basin and solidify its position as a key player in the energy industry.
The Permian basin has been a hotbed of activity in recent years, attracting major players in the oil and gas industry due to its vast resources and favorable production economics. Occidental’s interest in CrownRock underscores the continued importance of the Permian basin as a strategic location for energy production.
The news of Occidental’s potential acquisition of CrownRock comes at a time when the oil industry is facing significant challenges. The COVID-19 pandemic, along with the global push for renewable energy sources, has put pressure on traditional oil and gas companies to adapt and diversify their portfolios. The acquisition could be seen as a strategic move by Occidental to strengthen its position in the industry and ensure its long-term sustainability.
In the premarket trading, Occidental’s shares were up by 0.66% to $60.73. The potential acquisition of CrownRock could further boost investor confidence in Occidental’s growth prospects and contribute to its stock performance.
It is important to note that this article was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
