- Warren Buffett’s Berkshire Hathaway-backed Occidental Petroleum intends to acquire CrownRock, a privately-held oil and gas producer operating in the Permian basin for $12 billion.
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CrownRock’s assets are seen as a strategic fit for Occidental, providing an opportunity to build scale in the Midland Basin. The deal includes the addition of approximately 170,000 barrels of oil equivalent per day of high-margin, lower-decline unconventional production in 2024. Furthermore, about 1,700 undeveloped locations are part of the acquisition, enhancing Occidental’s growth prospects.
This move solidifies the ongoing trend of major consolidations within the US energy sector and strengthens Occidental’s foothold in one of the nation’s key oil-producing regions.
Vicki Hollub, President and CEO of Occidental, expressed confidence in the strategic significance of the deal, stating, “We believe the acquisition of CrownRock’s assets adds to the strongest and most differentiated portfolio that Occidental has ever had.”
We found CrownRock to be a strategic fit, giving us the opportunity to build scale in the Midland Basin and positioning us to drive value creation for our shareholders with immediate free cash flow accretion,” Hollub added.
Occidental intends to finance the acquisition through a combination of new debt, equity issuance, and assuming CrownRock’s existing debt. The deal is expected to close in the first quarter of 2024, subject to regulatory approvals.
This acquisition follows a series of significant transactions in the US oil and gas sector, including ExxonMobil’s $60 billion deal for Pioneer Natural Resources and Chevron’s $53 billion acquisition of Hess.
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