Occidental Announces Sale of Wyoming, Colorado, and Utah Land Grant Assets to Orion Mine Finance for $1.33 Billion

Rhea-AI Summary

Occidental (NYSE: OXY) has entered a purchase and sale agreement to divest its Wyoming, Colorado, and Utah land grant assets for approximately $1.33 billion to Orion Mine Finance. This transaction, expected to close in Q4 2020, includes around 4.5 million mineral acres. Occidental will retain cash flow from producing oil and gas properties, primarily cost-free royalties. The deal aims to meet their $2 billion divestiture target for 2020, while retaining core assets in the Rockies, including Colorado's DJ Basin.

Positive

• Divestiture of $1.33 billion improves cash position.
• Progress toward $2 billion divestiture goal for 2020.
• Retains core oil and gas assets in prime regions like DJ Basin.

Negative

• None.

HOUSTON, Aug. 19, 2020 (GLOBE NEWSWIRE) -- Occidental (NYSE: OXY) today announced it has entered into a purchase and sale agreement to divest Wyoming, Colorado, and Utah Land Grant assets to Orion Mine Finance (Orion) for approximately $1.33 billion. The transaction, which is expected to close in the fourth quarter of 2020, has a footprint of approximately 4.5 million mineral acres and 1 million fee surface acres. Occidental will retain all cash flow from currently producing oil and gas properties on the position, which are primarily cost-free royalties. Not included in the sale is approximately 2.5 million mineral acres derived from the land grant in Colorado, including Occidental’s core DJ Basin position.

“This transaction significantly advances the progress against our $2 billion plus divestiture target for 2020,” said President and CEO Vicki Hollub. “We will retain our core oil and gas assets in the Rockies, including the prolific DJ Basin in Colorado and the highly prospective Powder River Basin in Wyoming.”

In this transaction, Orion is acquiring mineral rights to the world’s largest known trona deposit. Trona is a mineral used to make soda ash, the principal ingredient in baking soda, global glass manufacturing, pollution control systems, as well as other critical chemical applications.

Oskar Lewnowski, Chief Investment Officer of Orion, said: “Acquiring high-quality producing royalties is a core component of our investment strategy and we are thrilled to be partnering with Occidental in this transaction. This transaction offers significant royalty cash flow from the trona mines and has strong potential for mineral development.” He added, “As a firm we recognize the importance of US mineral and energy production and are pleased to be able to offer our support to the existing world-class operators and their associated communities.”

The acquired properties will be held under Sweetwater Royalties, a new base metals and industrial minerals royalty company, managed by Orion.

Occidental was advised by RBC Capital Markets, CBRE Group Inc., and Latham & Watkins, LLP. Orion was advised by Citi and Shearman & Sterling LLP.

About Occidental

Occidental is an international energy company with operations in the United States, Middle East, Africa and Latin America. We are the largest onshore oil producer in the U.S., including in the Permian Basin, and a leading offshore producer in the 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 dioxide management to advance a lower-carbon world. Visit oxy.com for more information.

About Orion

Orion Resource Partners is a global alternative investment management firm with approximately $6.2 billion under management (as of 3/31/2020). Orion specializes in institutional metals and mining investment strategies in the base and precious metals space. Our private equity, hedge fund, and merchant service divisions enable us to access in-depth knowledge of the global metals and mining supply chain and robust insight into the physical and financial demand driving global metals prices. We are an industry leader in delivering comprehensive and customized financial solutions to mining companies and base and precious metals investors. For more information visit www.orionresourcepartners.com.

Cautionary Statement Concerning Forward-Looking Statements

This press release contains forward-looking statements that involve risks and uncertainties that could materially affect expected results of operations, liquidity, cash flows and business prospects. Actual results may differ from anticipated results, sometimes materially, and reported results should not be considered an indication of future performance. Factors that could cause the results to differ include, but are not limited to: the scope and duration of the COVID-19 pandemic and actions taken by governmental authorities and other third parties in response to the pandemic; 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, repay or refinance its debt and the impact of changes in Occidental’s credit ratings; assumptions about energy markets; global and local commodity and commodity-futures pricing fluctuations, such as the sharp decline in crude oil prices that occurred in the first half of 2020; supply and demand considerations for, and the prices of, Occidental’s products and services; actions by the Organization of 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; 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 governmental 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 dispositions; 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 and natural gas liquids 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; general economic conditions, including slowdowns, domestically or internationally, and volatility in the securities, capital or credit markets; uncertainty from the expected discontinuance of LIBOR and transition to any other interest rate benchmark; governmental actions and political conditions and events; legislative or regulatory changes, including changes relating to hydraulic fracturing or other oil and natural gas operations, retroactive royalty or production tax regimes, deepwater and onshore drilling and permitting regulations, and environmental regulation (including regulations related to climate change); environmental risks and liability under international, provincial, federal, regional, state, tribal, local and foreign environmental laws and regulations (including remedial actions); potential liability resulting from pending or future litigation; disruption or interruption of production or manufacturing or facility damage due to accidents, chemical releases, labor unrest, weather, natural disasters, cyber-attacks or insurgent activity; 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; reorganization or restructuring of Occidental’s operations; changes in state, federal or foreign tax rates; and actions by third parties that are beyond Occidental’s control.

Words such as “estimate,” “project,” “predict,” “will,” “would,” “should,” “could,” “may,” “might,” “anticipate,” “plan,” “intend,” “believe,” “expect,” “aim,” “goal,” “target,” “objective,” “likely” or similar expressions that convey the prospective nature of events or outcomes generally indicate forward-looking statements. You should not place undue reliance on these forward-looking statements, which speak only as of this press release. Unless legally required, we undertake no obligation to update, modify or withdraw any forward-looking statements, as a result of new information, future events or otherwise. Factors that could cause actual results to differ and that may affect Occidental’s results of operations and financial position appear in Part I, Item 1A “Risk Factors” of Occidental’s Annual Report on Form 10-K for the year ended December 31, 2019, and in Occidental’s other filings with the U.S. Securities and Exchange Commission.

Contacts
Occidental
Media	Investors
Melissa E. Schoeb	Jeff Alvarez
713-366-5615	713-215-7864
melissa_schoeb@oxy.com	jeff_alvarez@oxy.com
Orion Mine Finance
Media	Investors
Andrew Merrill	Matthew Zales
917-622-1252	917-612-1025
amerrill@prosek.com	mzales@orionrp.com

FAQ

What assets is Occidental divesting in the recent transaction?

Occidental is divesting Wyoming, Colorado, and Utah land grant assets.

How much is the divestiture agreement with Orion worth?

The divestiture agreement is worth approximately $1.33 billion.

When is the Occidental divestiture expected to close?

The divestiture is expected to close in the fourth quarter of 2020.

What impact does the divestiture have on Occidental's divestiture target for 2020?

The divestiture significantly advances Occidental's progress against their $2 billion divestiture target for 2020.

What will Occidental retain after the divestiture?

Occidental will retain cash flow from currently producing oil and gas properties, primarily cost-free royalties.