Occidental Petroleum agreed to purchase US private shale oil company CrownRock in a deal estimated to be worth around $12 billion, including debt, the company said in a statement on Monday.
Midland, Texas-based CrownRock is a joint venture of CrownQuest Operating and Lime Rock Partners.
Through the acquisition, Oxy will obtain the company’s position in the Permian shale area, where CrownQuest is situated, along with its $1.2 billion in current debt.
According to Occidental, the acquisition will result in a 33% increase in its unconventional inventory, with a breakeven cost of less than $40 per barrel.
By 2024, Occidental hopes to increase production on high margin unconventional land by 170,000 barrels of oil equivalent per day.
This acquisition represents the most recent in a string of deals in the oil and gas industry.
In October, ExxonMobil Corporation agreed to acquire Pioneer Natural Resources for $59.5 billion which was followed by Chevron decision to buy independent producer Hess for $53 billion.
‘The acquisition of CrownRock’s assets adds to the strongest and most differentiated portfolio that Occidental has ever had,’ Occidental President and Chief Executive Officer Vicki Hollub was quoted as saying in the statement.
