U.S. oil producer Occidental Petroleum is nearing a deal to sell its assets in the Barilla Draw region of Texas to Permian Resources for about $1 billion, people familiar with the matter told Reuters on July 25.
The two companies are in the process of finalizing the deal that could be announced in the coming weeks if the talks don't fall apart, the sources said, cautioning that a deal is not guaranteed and that a rival suitor for the Permian Basin assets could emerge.
The sources requested anonymity as the discussions are confidential. Occidental and Permian Resources did not immediately respond to requests for comment.
Reuters reported in May that Occidental was exploring a sale of the assets as part of a broader plan to slash its debt.
Backed by Warren Buffett's Berkshire Hathaway, Occidental's debt stood at over $18 billion at the end of the first quarter. Occidental, which is planning to take on additional debt to fund its $12 billion takeover of rival CrownRock, has said it plans to sell up to $6 billion of assets within 18 months of closing the deal.
A deal for the Barilla Draw assets is expected to boost Permian Resources' output by about 24,000 boe/d. It would also add about 27,500 net acres to the producer's footprint in the Permian Basin, which is the largest shale oil belt in the world.
High oil prices have resulted in a spate of dealmaking in the U.S. shale patch in the last two years, as companies sought producing wells to guarantee future supplies after Russia's invasion of Ukraine.
Several large-cap oil producers that splurged on dealmaking over the past year are now expected to divest billions of dollars of non-core assets.
Permian Resources, formed after Colgate Energy merged with Centennial Resources in 2022, has been an active acquirer in the Permian region. A takeover of the Barilla Draw assets would be its largest since the company clinched a $4.5 billion deal for rival Earthstone Energy last year.
Permian Resources plans to report its second-quarter earnings on Aug. 6, while Occidental is scheduled to announce results on Aug. 8.
Recommended Reading
Mach Prices Common Units, Closes Flycatcher Deal
2025-02-06 - Mach Natural Resources priced a public offering of common units following the close of $29.8 million of assets near its current holdings in the Ardmore Basin on Jan. 31.
Berry Closes Debt Refinancing to Uphold Growth Commitments
2024-12-26 - Berry Corp. closed a debt refinancing agreement to continue its corporate strategy of promoting scale and diversification.
Phillips 66’s NGL Focus, Midstream Acquisitions Pay Off in 2024
2025-02-04 - Phillips 66 reported record volumes for 2024 as it advances a wellhead-to-market strategy within its midstream business.
EON Deal Adds Permian Interests, Restructures Balance Sheet
2025-02-11 - EON Resources Inc. will acquire Permian overriding royalty interests in a cash-and-equity deal with Pogo Royalty LLC, which has agreed to reduce certain liabilities and obligations owed to it by EON.
Devon CEO Muncrief to Retire, COO Gaspar to Take Top Job in March
2024-12-09 - Devon Energy President and CEO Rick Muncrief, who has led Devon during past four years, will retire March 1. The board named COO Clay Gaspar as his successor.
Comments
Add new comment
This conversation is moderated according to Hart Energy community rules. Please read the rules before joining the discussion. If you’re experiencing any technical problems, please contact our customer care team.