Occidental Petroleum hopes it will have closed its $12-billion planned acquisition of Permian oil and gas producer CrownRock by the next quarterly earnings report at some point in August 2024, Oxy’s chief executive Vicki Hollub said on the Q1 call with analysts.
At the end of last year, Oxy said it would buy CrownRock for cash and stock in a deal valued at around $12 billion, including debt, with which it joined the wave of mergers and acquisitions in the U.S. oil industry.
The acquisition will boost Occidental’s premier Permian portfolio with the addition of around 170,000 barrels of oil equivalent per day (boed) of high-margin, lower-decline unconventional production in 2024, as well as approximately 1,700 undeveloped locations.
At the time of the merger announcement in early December, Oxy and CrownRock expected to close the deal in the first quarter of 2024, subject to customary closing conditions and the receipt of regulatory approvals.
However, Occidental said in February 2024 it expects the closing of the deal to be delayed to the second half of 2024 as the Federal Trade Commission (FTC) had asked for additional information while it reviews the proposed transaction.
Replying to a question from an analyst on this week’s Q1 earnings call, Oxy’s Hollub said, referring to the timing for closing the deal,
“We’ll definitely provide an update when we have our next quarterly meeting. Because by that time, I believe, we will have closed, maybe not, but it’s going to be certainly sometime in the third quarter.”
Sunil Mathew, Senior Vice President and Chief Financial Officer, added,
“Our teams are working constructively with the FTC, and we anticipate that the transaction will close in the third quarter of this year.”
The FTC has been reviewing a number of proposed acquisitions in the U.S. oil and gas sector amid a wave of mergers and acquisitions in the industry.
Last week, ExxonMobil finalized its acquisition of Pioneer Natural Resources, marking a monumental milestone in the energy sector. With a price tag of $60 billion, this deal stands as one of the largest oil and gas acquisitions in recent memory, reshaping the landscape of the industry.
By Tsvetana Paraskova for Oilprice.com
Lead image (Credit: Reuters)
