Occidental Petroleum is exploring a sale of a part of its operations in the Permian Basin that could fetch more than $1 billion for the energy producer, according to people familiar with the matter.
The company's divestment effort is linked to Occidental's broader plan to slash its debt, which stood at $18.5 billion at the end of 2023, the sources said, requesting anonymity as the discussions are confidential.
Related: Occidental to Divest Some Permian Assets after Closing CrownRock Deal
Occidental, which is backed by Warren Buffett's Berkshire Hathaway, is working with a financial adviser on the sale process for the assets in the Barilla Draw region of Texas, which is located within the Delaware portion of the Permian Basin, the sources said, cautioning a deal is not guaranteed.
A spokesperson for Occidental declined comment.
In February, Occidental's long-time CEO Vicki Hollub said the Federal Trade Commission's (FTC) second request for information on the company's $12 billion takeover of CrownRock had pushed back the deal's closing date to the second half of this year, forcing the Houston-based oil producer to postpone planned asset sales worth up to $6 billion.
Occidental plans to take on $9.1 billion of new debt to help fund its deal for CrownRock.
However, Occidental has kicked off the sale process for the Barilla Draw assets, as it sees an opportunity to attract strong interest from other Permian oil producers who have completed their recent dealmaking spree, the sources said.
The assets cover approximately 27,500 net acres and produces around 24,400 barrels of oil equivalent per day, the sources added.
Recommended Reading
‘Unexpected’ JV to Move Permian NatGas to Gulf Coast LNG Terminals
2024-03-26 - A trio of midstream companies—Enbridge, Whitewater and MPLX—will work together to build infrastructure to transport Permian Basin natural gas to Gulf Coast LNG terminals.
As ONEOK Digests Magellan, Sets Stage for More NGL Growth in 2024
2024-02-28 - ONEOK is continuing the integration of its newly acquired Magellan assets in 2024 as the company keeps an eye out for M&A opportunities and awaits regulatory approvals for certain projects.
EQT Deal to ‘Vertically Integrate’ Equitrans Faces Steep Challenges
2024-03-11 - EQT Corp. plans to acquire Equitrans Midstream with $5.5 billion equity, but will assume debt of $7.6 billion or more in the process, while likely facing intense regulatory scrutiny.
Global Partners Buys Four Liquid Energy Terminals from Gulf Oil
2024-04-10 - Global Partners initially set out to buy five terminals from Gulf Oil but the purchase of a terminal in Portland was abandoned after antitrust concerns were raised by the FTC and the Maine attorney general.
EQT Sees Clear Path to $5B in Potential Divestments
2024-04-24 - EQT Corp. executives said that an April deal with Equinor has been a catalyst for talks with potential buyers as the company looks to shed debt for its Equitrans Midstream acquisition.