Occidental to sell portion of Delaware Basin assets to Permian Resources for $818 million

– U.S. oil and gas producer Occidental Petroleum said on Monday it plans to sell some assets in the Delaware Basin in Texas and New Mexico to Permian Resources for about $818 million as it plans to reduce debt.

The company also plans to shed about $152 million in assets, bringing the total proceeds from closed or announced sales so far this year to $970 million.

Occidental, which plans to take on additional debt to fund its $12 billion acquisition of rival CrownRock, said it plans to sell up to $6 billion in assets within 18 months of closing the CrownRock deal. Occidental had more than $18 billion in debt at the end of the first quarter.

Berkshire Hathaway owns almost 29% of Occidental.

The agreement with Permian Resources, reported by Reuters last week, will cover a total of 29,500 net acres in the Barilla Draw field in the Permian Basin, the world’s largest shale oil belt, potentially increasing Permian Resources’ production by an estimated total net production of 15,000 barrels of oil equivalent per day (boepd) in the fourth quarter of 2024.

The Permian Resources deal is expected to close in the third quarter of 2024. The acquisition of Barilla Draw’s assets would be the company’s largest since it struck a $4.5 billion deal with rival Earthstone Energy last year.

Permian Resources plans to report second-quarter results on Aug. 6, while Occidental is scheduled to do so on Aug. 8.

(Reporting by Seher Dareen and Sourasis Bose in Bengaluru; Editing by Shailesh Kuber)