Linus Unah – Fourth Estate Contributor
Houston, TX, United States (4E) – Occidental Petroleum Corp has announced today that it has agreed to several purchase-and-sale transactions in the Permian basin, saying the transactions require no net cash outlay.
Houston-based Occidental said in a news release that the deal would add about 3,500 barrels of oil equivalent per day to the its production.
In addition, the company said it would reduce its Occidental will reduce its Permian resources position by 13,000 net acres, divesting “non-strategic” acreage in Andrews, Martin and Pecos Counties.
“These transactions support our pathway to breakeven at $50 after dividend and production growth and our long-term, returns-focused value proposition,” Vicki Hollub, president and chief executive officer of Occidental, said in a statement.
“The combined results accelerate cash flow and enhance our future returns by exchanging low-priority development acreage…. By monetizing assets in the tail of the portfolio that were not strategic to us, but are synergistic to other companies, we are creating value for our shareholders.”
The net Permian Resources transactions will generate proceeds of about $600 million, according to the company.
The Permian enhanced oil recovery transaction includes the acquisition of working interests in the Seminole-San Andres Unit, a premier Carbon dioxide flood, interests in the Seminole Gas Processing Plant, source fields at Bravo Dome Unit and West Bravo Dome Unit and the Sheep Mountain and Rosebud Carbon dioxide pipelines for $600 million.
Occidental has had an ownership interest in these enhanced oil recovery assets since 2000.
Seminole-San Andres Unit will become Occidental’s largest domestic oil producing EOR unit, the company added.
All the transactions are expected to close by the third quarter.
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