[Editor's note: This is a developing story. Last updated at 9:10 a.m.]

Occidental Petroleum Corp. (NYSE: OXY) will take control of 35,000 net Delaware Basin acres and other Permian Basin interests in a $2 billion deal, the company said Oct. 31.

Oxy said the company purchased producing and non-producing leasehold acreage in the Permian as well as interests in enhanced oil recovery (EOR) and CO2 properties and related infrastructure. The deal was made with multiple, undisclosed parties.

The purchase price, subtracting production value, is about $42,000 per acre, said Guy Baber, senior research analyst at Piper Jaffray & Co.

“We believe this is the second-highest price paid for Delaware acreage this year, trailing on the recent RSPP/ Silver Hill deal, which was done at $46,000-$50,000 per acre,” Baber said.

In the Southern Delaware, Oxy added acreage in Reeves and Pecos counties, Texas, in areas where the company already holds working interests.

Baber said the acquisition price was funded from cash on hand. The company’s second quarter cash balance of $3.75 billion could decline to $1.3 billion by the close of 2016 — when also factoring in projected outspend in the second half of 2016.

RELATED: SandRidge Gives Away Production, Midstream Assets To Break Contract

Occidental Petroleum, Permain Basin, Delaware Basin, Texas, Reeves County, Pecos County, CO2, EOR, oil, natural gas, acquisition, Southern Delaware, map

The acquisition:

  • Includes production of about 7,000 net barrels of oil equivalent per day (boe/d) (72% oil) from 68 horizontal wells;
  • Adds an inventory of about 700 gross horizontal drilling locations targeting the Wolfcamp A and B and Bone Spring as well as potential for additional zones; and
  • Boosts the company’s leasehold Delaware position to nearly 59,000 acres.

Oxy’s acquired working interests in producing oil and gas CO2 floods and related EOR infrastructure adds production of 4,000 boe/d (80% oil).

Oxy also gains net proved developed producing reserves of about 25 MMboe and total proved reserves of approximately 41 MMboe.

“These transactions further complement and solidify Occidental’s dominant position in the Permian Basin,” Oxy President and CEO Vicki Hollub said. “They leverage our existing infrastructure, utilize our strong balance sheet and create additional operational synergies.”

Darren Barbee can be reached at dbarbee@hartenergy.com.