Published: December 12, 2023 | Share This

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Occidental has entered into a purchase agreement to acquire Midland-based oil and gas producer CrownRock, a joint venture of CrownQuest Operating and Lime Rock Partners, for cash and stock in a transaction valued at approximately $12 billion, including the assumption of CrownRock’s debt.

“We believe the acquisition of CrownRock’s assets adds to the strongest and most differentiated portfolio that Occidental has ever had. We found CrownRock to be a strategic fit, giving us the opportunity to build scale in the Midland Basin and positioning us to drive value creation for our shareholders with immediate free cash flow accretion,” said Occidental President and Chief Executive Officer Vicki Hollub.

“We are excited about combining CrownRock’s high-performing team into our organization and expect to continue Occidental’s exceptional operational and financial results for years to come,” added Hollub.

“Occidental’s purchase of CrownRock is a multi-win proposition for CrownRock, our employees and customers, and our community,” said CrownQuest Operating Chief Executive Officer Tim Dunn.

“We congratulate Occidental and look forward to seeing their historically successful company continue to grow and prosper,” added Dunn.

HIGHLIGHTS INCLUDE:

• Expected to deliver increased free cash flow on a diluted share basis, including $1 billion in the first year based
  on $70 per barrel WTI
• Complements and enhances Occidental’s premier Permian portfolio with the addition of approximately 170
  thousand barrels of oil equivalent per day (Mboed) of high-margin, lower-decline unconventional production
  in 2024, as well as approximately 1,700 undeveloped locations
• Increases Occidental’s Permian unconventional sub-$40 breakeven inventory by 33 percent
• CrownRock’s more than 94,000 net acres of premium stacked pay assets and supporting infrastructure are well
  positioned alongside Occidental’s legacy Midland Basin business
• Increased cash flow, along with proceeds from a new $4.5-$6 billion divestiture program, will enable Occidental
  to reduce its debt principal by at least $4.5 billion within 12 months and expect to retain its investment grade
  credit ratings
• Combined position builds upon Occidental’s subsurface understanding and leading well performance, while
  providing operational flexibility and upside

Occidental is an international energy company with assets primarily in the United States, the Middle East, and North Africa. They are one of the largest oil producers in the U.S., including a leading producer in the Permian and DJ basins, and offshore Gulf of Mexico. Its midstream and marketing segment provides flow assurance and maximizes the value of its oil and gas. Their chemical subsidiary OxyChem manufactures the building blocks for life-enhancing products. Their Oxy Low Carbon Ventures subsidiary is advancing leading-edge technologies and business solutions that economically grow their business while reducing emissions. They are committed to using their global leadership in carbon management to advance a lower-carbon world.

CrownQuest Operating is a privately owned company based in Midland, Texas. It has managed the CrownRock partnership since its inception in 2007. CrownQuest and its predecessors have operated in the Permian Basin since their founding in 1996. The company continues its other business interests, primarily in land and minerals management.

Since its inception in 1998, Lime Rock Management has raised more than $10 billion in private equity funds and affiliated co-investment vehicles for investment in the energy industry through three strategies: Lime Rock Partners, investors of growth capital in E&P and oilfield service companies; Lime Rock Resources, acquirers and operators of oil and gas properties in the United States; and Lime Rock New Energy, investors of growth capital in new energy companies in North America. With more than 100 portfolio company investments made over the last 25 years, Lime Rock Partners is a creative investment partner in building differentiated oil and gas businesses, side by side, with entrepreneurs every day.

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