Occidental Petroleum (OXY) Makes $2B of Permian Basin and EOR Asset Acquisitions
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Occidental Petroleum Corporation (NYSE: OXY) announced it has acquired producing and non-producing leasehold acreage in the Permian Basin from private sellers. Separately, the company acquired interests in several Permian Basin enhanced oil recovery (EOR) and CO2 properties, and related infrastructure.
“These transactions further complement and solidify Occidental’s dominant position in the Permian Basin,” said President and Chief Executive Officer Vicki Hollub. “They leverage our existing infrastructure, utilize our strong balance sheet and create additional operational synergies.”
The total purchase price for these transactions is approximately $2 billion, which has been funded from existing cash on hand.
- The leasehold acquisition includes approximately 35,000 net acres in Reeves and Pecos counties, Texas, in the Southern Delaware Basin, in areas where Occidental currently operates or has working interests.
- Approximately 7,000 barrels of oil equivalent (BOE) per day of net production (72 percent oil) from 68 horizontal wells.
- A minimum of 700 gross estimated horizontal drilling locations targeting the Wolfcamp A, Wolfcamp B and Bone Spring, with meaningful upside potential through infill drilling and additional intervals.
- Proximity to other key Occidental development areas, such as Barilla Draw, allows for cost and infrastructure efficiencies and contiguous position enables longer lateral well development.
- Enables efficient development by gaining operatorship and provides capital flexibility as a high percentage of the acreage is held by production.
- Including this transaction, Occidental’s overall position in the leasehold area encompasses nearly 59,000 acres with an aggregate acquisition cost, inclusive of value given to current production and infrastructure, of approximately $2 billion.
- Acquired working interests in producing oil and gas CO2 floods and related EOR infrastructure, increasing Occidental’s ownership in several properties where it is currently the operator or an existing working interest partner.
- These properties have current production of approximately 4,000 BOE per day (80 percent oil), with estimated net proved developed producing reserves of approximately 25 million BOE and total proved reserves of approximately 41 million BOE.
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