Occidental joins in on US oil and gas mega-mergers

Occidental Petroleum Corporation has decided to acquire local competitor CrownRock Minerals in a deal valued at USD 12 billion, the Houston-based E&P player announced on Monday.

If approved, the acquisition would up Occidental’s production by 170,000 bpd of oil and gas in the Midland basin to 750,000 bpd. At the end of September, Occidental’s total production was 1.2 million boepd.

The acquisition would create the largest shale gas player in the USA, larger than both Chevron and Hess Corporation combined.

The cash-and-stock transaction will be financed through the purchase of USD 9.1 billion in new debt and taking on CrownRock’s existing debt of USD 1.2 billion. The company will also issue USD 1.7 billion in common stock for the purchase.

According to Vicki Hollub, CEO of Occidental, the company plans to reduce its debt by between USD 15 billion and USD 4.5 billion in the following year from asset sales and cash flow.

The deal is expected to close in Q1 2024.

The discussion also follows a slew of high-profile mergers involving American energy giants signed in 2023, including Chevron agreeing to acquire Hess International for USD 60 billion and ExxonMobil agreeing to purchase Pioneer Natural Resources for USD 64 billion in October 2023.

Outside of the market, Australia’s top oil and gas producers, Woodside Energy and Santos, have begun discussions to merge into a USD 52-billion giant.