Occidental Petroleum Aims to Close CrownRock Deal by August
(Reuters) — Occidental Petroleum hopes to close its acquisition of shale oil producer CrownRock before its second-quarter earnings call, CEO Vicki Hollub said on Wednesday, a date that typically falls in August.
Occidental in December proposed to buy Permian producer CrownRock in a $12 billion cash-and-stock deal including debt. It wants to expand its presence in the largest U.S. oilfield as part of a wider consolidation wave among shale producers.
RELATED: Occidental Petroleum to Acquire Permian Oil, Gas Producer CrownRock for $12 Billion
"By that time, I believe, we will have closed," Hollub told analysts, in response to a question on when the company expects to incorporate CrownRock into its oil production guidance.
The company is answering a second request for information on the acquisition by U.S. regulators and does not anticipate any impediments, Hollub said.
Excluding the acquisition, Occidental said it plans to increase oil production in the Permian basin from current operations by 18,000 barrels per day in the second half of 2024, with gains in efficiency allowing the company to reduce the rig count, onshore operations executive Richard Jackson said.
RELATED: Occidental Says CrownRock Deal Delayed by FTC Requests of 'Everything'
Its first quarter profit beat analysts' consensus estimates on better-than-expected oil output. But shares fell more than 2% to $63.57 in afternoon trading.
Occidental reaffirmed its plans to sell $4.5 billion to $6 billion of assets within 18 months of closing the CrownRock purchase. The proceeds will help reduce the company's principal debt to $15 billion or below. Occidental plans to resume its share buybacks after its debt target is met.
"Assets within our portfolio have garnered much interest, and our teams have commenced the early stages of the divestiture process," Hollub said.
Occidental hopes "that high level of interest translates into appropriate levels of offers" for the assets, Hollub added.
"It all comes down to valuation, and that is going to make the difference for us because we do have options," she said.
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