Market Updates
Occidental to Acquire CrownRock for $12 Billion
Scott Peters
11 Dec, 2023
New York City
Occidental Petroleum Corp. declined 0.8% to $56.0 after the company said it agreed to buy CrownRock for $12 billion.
The company said after the merger, free cash flow is expected to increase on a diluted share basis, including $1 billion in the first year based on the WTI crude oil price of $70 per barrel.
Occidental intends to finance the $12.0 billion purchase with the incurrence of $9.1 billion of new debt, the issuance of approximately $1.7 billion of common equity, and the assumption of CrownRock’s $1.2 billion of existing debt.
The deal will add approximately 170,000 barrels of oil equivalent per day and 1,700 undeveloped locations to Occidental's portfolio in the Permian Basin.
The transaction to acquire a Midland, Texas-based company is expected to close in the first quarter of 2024.
Occidental also announced its plan to increase its quarterly cash dividend by 4 cents to 22 cents in February 2024.
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