Occidental Announces Progress on Divestiture and Debt Reduction Program
Occidental (NYSE: OXY) has announced significant progress in its divestiture and debt reduction program. The company has agreed to sell certain Delaware Basin assets to Permian Resources for approximately $818 million. Additionally, Occidental has completed several dispositions in 2024, totaling approximately $152 million. These transactions bring the total year-to-date proceeds of closed or announced divestments to $970 million.
The sales are part of Occidental's previously announced $4.5 billion-$6 billion divestiture program, aimed at derisking the financing of the CrownRock acquisition and accelerating shareholder returns. The assets being sold to Permian Resources include 27,500 net acres in the Barilla Draw Field of the Texas Delaware Basin and 2,000 net acres in the New Mexico Delaware Basin, with combined net production estimated at 15,000 barrels of oil equivalent per day for Q4 2024.
Occidental (NYSE: OXY) ha annunciato progressi significativi nel suo programma di dismissione e riduzione del debito. L’azienda ha accettato di vendere alcuni asset del Delaware Basin a Permian Resources per circa 818 milioni di dollari. Inoltre, Occidental ha completato diverse dismissioni nel 2024, per un totale di circa 152 milioni di dollari. Queste transazioni portano il totale delle entrate da dismissioni chiuse o annunciate fino ad oggi a 970 milioni di dollari.
Le vendite fanno parte del programma di dismissione da 4,5-6 miliardi di dollari precedentemente annunciato da Occidental, mirato a ridurre il rischio del finanziamento dell'acquisizione di CrownRock e ad accelerare i ritorni per gli azionisti. Gli asset venduti a Permian Resources includono 27.500 acri netti nel Barilla Draw Field del Delaware Basin in Texas e 2.000 acri netti nel Delaware Basin del New Mexico, con una produzione netta combinata stimata di 15.000 barili di equivalente di petrolio al giorno per il quarto trimestre del 2024.
Occidental (NYSE: OXY) ha anunciado avances significativos en su programa de desinversión y reducción de deuda. La compañía ha acordado vender ciertos activos de la cuenca de Delaware a Permian Resources por aproximadamente 818 millones de dólares. Además, Occidental ha completado varias desinversiones en 2024, sumando aproximadamente 152 millones de dólares. Estas transacciones llevan el total acumulado hasta la fecha de los ingresos por desinversiones cerradas o anunciadas a 970 millones de dólares.
Las ventas son parte del programa de desinversión de 4.5 a 6 mil millones de dólares previamente anunciado por Occidental, dirigido a reducir el riesgo del financiamiento de la adquisición de CrownRock y acelerar los retornos para los accionistas. Los activos vendidos a Permian Resources incluyen 27,500 acres netos en el Barilla Draw Field de la cuenca de Delaware en Texas y 2,000 acres netos en la cuenca de Delaware de Nuevo México, con una producción neta combinada estimada de 15,000 barriles de equivalente de petróleo por día para el cuarto trimestre de 2024.
Occidental (NYSE: OXY)는 자산 매각 및 부채 감축 프로그램에서 상당한 진전을 발표했습니다. 이 회사는 델라웨어 분지의 특정 자산을 Permian Resources에 매각하기로 합의했습니다, 약 8억 1,800만 달러에 해당합니다. 또한, Occidental은 2024년에 총 약 1억 5,200만 달러에 달하는 여러 매각을 완료했습니다. 이 거래는 현재까지 종료되거나 발표된 매각에서 총 수익이 9억 7천만 달러에 달하는 성과를 가져왔습니다.
이번 매각은 Occidental이 이전에 발표한 45억 달러에서 60억 달러의 매각 프로그램의 일환으로, CrownRock 인수의 자금 리스크를 줄이고 주주 수익을 가속화하기 위한 것입니다. Permian Resources에 판매된 자산에는 텍사스 델라웨어 분지의 Barilla Draw Field의 27,500 에이커와 뉴멕시코 델라웨어 분지의 2,000 에이커가 포함되며, 2024년 4분기 기준으로 일일 15,000 배럴의 석유 등가물 생산량이 추정됩니다.
Occidental (NYSE: OXY) a annoncé des progrès significatifs dans son programme de cession et de réduction de la dette. La société a accepté de vendre certains actifs du Delaware Basin à Permian Resources pour environ 818 millions de dollars. De plus, Occidental a complété plusieurs cessions en 2024, pour un total d'environ 152 millions de dollars. Ces transactions portent le total des recettes à ce jour provenant des cessions clôturées ou annoncées à 970 millions de dollars.
Ces ventes font partie du programme de cession de 4,5 à 6 milliards de dollars précédemment annoncé par Occidental, visant à réduire le risque de financement de l'acquisition de CrownRock et à accélérer les retours pour les actionnaires. Les actifs vendus à Permian Resources comprennent 27 500 acres nets dans le Barilla Draw Field du Delaware Basin au Texas et 2 000 acres nets dans le Delaware Basin du Nouveau-Mexique, avec une production nette combinée estimée à 15 000 barils équivalent pétrole par jour pour le quatrième trimestre 2024.
Occidental (NYSE: OXY) hat bedeutende Fortschritte in seinem Programm zur Veräußerung und Schuldenreduzierung angekündigt. Das Unternehmen hat vereinbart, bestimmte Vermögenswerte aus dem Delaware Basin für ungefähr 818 Millionen Dollar an Permian Resources zu verkaufen. Darüber hinaus hat Occidental 2024 mehrere Veräußerungen abgeschlossen, die insgesamt ungefähr 152 Millionen Dollar betragen. Diese Transaktionen bringen die insgesamt bis heute erzielten Einnahmen aus abgeschlossenen oder angekündigten Veräußerungen auf 970 Millionen Dollar.
Die Verkäufe sind Teil des bereits angekündigten Veräußerungsprogramms von 4,5 bis 6 Milliarden Dollar, das darauf abzielt, das Risiko der Finanzierung der CrownRock-Akquisition zu verringern und die Renditen für die Aktionäre zu beschleunigen. Die an Permian Resources verkauften Vermögenswerte umfassen 27.500 Nettoacre im Barilla Draw Field des Delaware Basin in Texas und 2.000 Nettoacre im Delaware Basin von New Mexico, mit einer geschätzten kombinierten Nettoproduktion von 15.000 Barrel Öläquivalent pro Tag für das vierte Quartal 2024.
- Agreed to sell Delaware Basin assets for $818 million
- Completed additional dispositions totaling $152 million
- Total year-to-date proceeds from divestments reach $970 million
- Sales proceeds will be used to reduce debt
- Progressing towards $4.5 billion-$6 billion divestiture program goal
- Reduction in production assets by approximately 15,000 barrels of oil equivalent per day
Insights
Occidental's recent announcement of asset sales totaling
From a financial perspective, this is a positive development for Occidental. The company is proactively addressing its debt load, which has been a concern for investors. By selling non-core assets, Occidental can focus on higher-return properties while strengthening its balance sheet. The speed at which they're executing these sales - well ahead of their 18-month timeline - demonstrates management's commitment to financial discipline.
However, investors should consider the potential impact on production. The divested assets were producing approximately 15,000 barrels of oil equivalent per day. While this represents a small fraction of Occidental's total output, it's essential to monitor how the company plans to offset this loss in future earnings reports.
Overall, this move suggests Occidental is prioritizing financial health over pure production growth, a strategy that could resonate well with investors in the current market environment focused on capital discipline in the energy sector.
Occidental's divestiture of Delaware Basin assets to Permian Resources is a strategic move that reshapes the competitive landscape in one of the most prolific oil-producing regions in the U.S. This transaction underscores the ongoing consolidation trend in the Permian Basin, where companies are seeking to optimize their acreage positions and operational efficiencies.
The sale of approximately 29,500 net acres, primarily in the Barilla Draw Field, is significant. This area is known for its high-quality reservoirs and substantial remaining inventory. For Permian Resources, this acquisition bolsters their position in the Delaware Basin, potentially allowing for enhanced operational synergies and economies of scale.
From Occidental's perspective, while they're divesting productive assets, the company likely views these particular holdings as non-core to their overall Permian strategy. The decision to sell suggests that Occidental believes it can generate higher returns by deploying capital elsewhere in its portfolio, possibly in areas where they have a more dominant acreage position or operational advantages.
It's worth noting that this transaction occurs against the backdrop of volatile oil prices and increasing focus on capital discipline within the industry. Occidental's willingness to divest producing assets signals a shift from the 'growth at all costs' mentality that previously dominated the shale sector to a more measured approach focused on returns and financial stability.
As the energy transition gains momentum, strategic positioning in core areas becomes increasingly crucial. This deal allows both Occidental and Permian Resources to refine their asset bases, potentially improving their long-term competitiveness in a changing energy landscape.
Occidental's recent asset sales, particularly the
Firstly, the rapid execution of these divestitures - achieving
Secondly, by divesting assets in the Delaware Basin, Occidental is likely aiming to streamline its operations and focus on areas where it has the strongest competitive advantage. This strategic pruning of the portfolio can lead to improved operational efficiency and potentially higher returns on capital employed.
Thirdly, the commitment to use these proceeds for debt reduction signals a strong focus on improving the company's financial health. This is important not only for reducing interest expenses but also for enhancing financial flexibility, which could be valuable in pursuing future growth opportunities or navigating market downturns.
Lastly, this strategy aligns well with the broader industry trend towards capital discipline and shareholder returns. By demonstrating a clear path to deleveraging and portfolio optimization, Occidental is positioning itself to potentially increase shareholder distributions in the future, which could make the stock more attractive to investors.
While the strategy appears sound, its success will ultimately depend on execution and market conditions. Investors should closely monitor Occidental's progress in completing its divestiture program and the subsequent impact on its financial metrics and operational performance.
- Agreed to sell certain Delaware Basin assets in Texas and New Mexico to Permian Resources for approximately
$818 million
- Additional dispositions in 2024 with total purchase price proceeds of approximately
$152 million bring total year-to-date proceeds of closed or announced divestments to$970 million
- Sales proceeds will go toward reducing debt
HOUSTON, July 29, 2024 (GLOBE NEWSWIRE) -- Occidental (NYSE: OXY) today announced it has agreed to sell certain Delaware Basin assets in Texas and New Mexico to Permian Resources (NYSE: PR) for approximately
Occidental previously announced a
“We are pleased with the significant progress to date on our divestiture program, which is aimed at derisking the financing of the CrownRock acquisition and accelerating our shareholder return pathway,” said President and CEO Vicki Hollub.
Occidental is selling Permian Resources approximately 27,500 net acres in the Barilla Draw Field of the Texas Delaware Basin and approximately 2,000 net acres in the New Mexico Delaware Basin, with combined net production for the fourth quarter of 2024 estimated at approximately 15,000 barrels of oil equivalent per day. The Permian Resources transaction is expected to close in the third quarter of 2024, subject to customary closing conditions.
For this divestiture, Occidental’s financial advisor was RBC Capital Markets, LLC and legal advisor was White & Case LLP.
About Occidental
Occidental is an international energy company with assets primarily in the United States, the Middle East and North Africa. We are one of the largest oil and gas producers in the U.S., including a leading producer in the Permian and DJ basins, and offshore Gulf of Mexico. Our midstream and marketing segment provides flow assurance and maximizes the value of our oil and gas. Our chemical subsidiary OxyChem manufactures the building blocks for life-enhancing products. Our Oxy Low Carbon Ventures subsidiary is advancing leading-edge technologies and business solutions that economically grow our business while reducing emissions. We are committed to using our global leadership in carbon management to advance a lower-carbon world. Visit oxy.com for more information.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to statements about Occidental’s expectations, beliefs, plans or forecasts. All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including, but not limited to: any projections of revenue or other financial items or future financial position or sources of financing; any statements of the plans, strategies and objectives of management for future operations or business strategy; any statements regarding future economic conditions or performance; any statements of belief; and any statements of assumptions underlying any of the foregoing. Words such as “estimate,” “project,” “will,” “should,” “could,” “may,” “anticipate,” “plan,” “expect,” "commit," "advance," or similar expressions that convey the prospective nature of events or outcomes are generally indicative of forward-looking statements. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release unless an earlier date is specified. Unless legally required, Occidental does not undertake any obligation to update, modify or withdraw any forward-looking statements as a result of new information, future events or otherwise.
Forward-looking statements involve estimates, expectations, projections, goals, forecasts, assumptions, risks and uncertainties. Actual outcomes or results may differ from anticipated results, sometimes materially. Factors that could cause actual results to differ include, but are not limited to: general economic conditions, including slowdowns and recessions, domestically or internationally; Occidental’s indebtedness and other payment obligations, including the need to generate sufficient cash flows to fund operations; Occidental’s ability to successfully monetize select assets and repay or refinance debt and the impact of changes in Occidental’s credit ratings or future increases in interest rates; assumptions about energy markets; global and local commodity and commodity-futures pricing fluctuations and volatility; supply and demand considerations for, and the prices of, Occidental’s products and services; actions by the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC oil producing countries; results from operations and competitive conditions; future impairments of Occidental's proved and unproved oil and gas properties or equity investments, or write-downs of productive assets, causing charges to earnings; unexpected changes in costs; inflation, its impact on markets and economic activity and related monetary policy actions by governments in response to inflation; availability of capital resources, levels of capital expenditures and contractual obligations; the regulatory approval environment, including Occidental's ability to timely obtain or maintain permits or other government approvals, including those necessary for drilling and/or development projects; Occidental's ability to successfully complete, or any material delay of, field developments, expansion projects, capital expenditures, efficiency projects, acquisitions or divestitures, including the Permian Resources transaction and the CrownRock acquisition; risks associated with acquisitions, mergers and joint ventures, such as difficulties integrating businesses, uncertainty associated with financial projections, projected synergies, restructuring, increased costs and adverse tax consequences; uncertainties and liabilities associated with acquired and divested properties and businesses; uncertainties about the estimated quantities of oil, natural gas liquids and natural gas reserves; lower-than-expected production from development projects or acquisitions; Occidental’s ability to realize the anticipated benefits from prior or future streamlining actions to reduce fixed costs, simplify or improve processes and improve Occidental’s competitiveness; exploration, drilling and other operational risks; disruptions to, capacity constraints in, or other limitations on the pipeline systems that deliver Occidental’s oil and natural gas and other processing and transportation considerations; volatility in the securities, capital or credit markets, including capital market disruptions and instability of financial institutions; government actions, war (including the Russia-Ukraine war and conflicts in the Middle East) and political conditions and events; health, safety and environmental (HSE) risks, costs and liability under existing or future federal, regional, state, provincial, tribal, local and international HSE laws, regulations and litigation (including related to climate change or remedial actions or assessments); legislative or regulatory changes, including changes relating to hydraulic fracturing or other oil and natural gas operations, retroactive royalty or production tax regimes, and deep-water and onshore drilling and permitting regulations; Occidental's ability to recognize intended benefits from its business strategies and initiatives, such as Occidental's low-carbon ventures businesses or announced greenhouse gas emissions reduction targets or net-zero goals; potential liability resulting from pending or future litigation, government investigations and other proceedings; disruption or interruption of production or manufacturing or facility damage due to accidents, chemical releases, labor unrest, weather, power outages, natural disasters, cyber-attacks, terrorist acts or insurgent activity; the scope and duration of global or regional health pandemics or epidemics, and actions taken by government authorities and other third parties in connection therewith; the creditworthiness and performance of Occidental's counterparties, including financial institutions, operating partners and other parties; failure of risk management; Occidental’s ability to retain and hire key personnel; supply, transportation, and labor constraints; reorganization or restructuring of Occidental’s operations; changes in state, federal or international tax rates; and actions by third parties that are beyond Occidental’s control.
Additional information concerning these and other factors that may cause Occidental’s results of operations and financial position to differ from expectations can be found in Occidental’s filings with the U.S. Securities and Exchange Commission, including Occidental’s 2023 Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.
Contacts
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