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Occidental in Talks to Buy Permian Driller CrownRock
Posted on 11/30/23 at 4:39 pm
Posted on 11/30/23 at 4:39 pm
quote:
Occidental Petroleum is in talks for the potential acquisition of fellow oil and gas producer CrownRock, active in the Permian, the Wall Street Journal has reported, citing unnamed sources familiar with the development.
According to these sources, the deal could value CrownRock at over $10 billion, including debt, the report noted.
CrownRock operates in the northern part of the Midland Basin and has some 80,000 net acres to its name. The company pumps some 150,000 barrels of oil equivalent daily, per Fitch Ratings data cited by the Wall Street Journal.
If the deal is confirmed and sealed, it would be the latest addition to a series of major acquisitions in the shale patch with a focus on the Permian-the most prolific of the shale basins.
Consolidation has become the preferred method of growth for the large players in the U.S. shale patch. The last two years saw a string of large deals, including Occidental's acquisition of Anadarko for some $38 billion, with the financial backing of Warren Buffett's Berkshire Hathaway.
Pioneer Natural Resources was among the most active buyers aiming to grow through acquisitions, buying Parsley Energy for over $7 billion in 2020 and DoublePoint Energy for over 6 billion in 2021. This year, Pioneer became an acquisition target itself, with Exxon striking a deal worth close to $60 billion to take over the company.
Analysts have expected more and larger acquisitions in the shale patch for some time now, noting that as untapped acreage ran out the larger drillers did not have a lot of growth options left on the table besides acquiring smaller rivals and absorbing their acreage.
The Wall Street Journal report is the latest confirmation that this process of consolidation is well underway and it will likely end with a lot fewer players in the Permian than there are now.
LINK
Exxon bought Pioneer. Chevron bought Hess (though not really much in the way of Permian acreage there). And now looks like Oxy buying CrownRock is speculated as the next domino. Devon has been rumored to be courting Marathon.
Also, interesting, while there has been many articles published about Exxon and Oxy getting into the carbon sequestration and “energy transition” game, moves like this are good for showing that they are still oil & gas companies at this time, first and foremost, if there’s at least any validity in these reports on Oxy’s behalf.
It was rumored a couple months back that Chevron was courting CrownRock.
This post was edited on 11/30/23 at 4:54 pm
Posted on 11/30/23 at 4:48 pm to ragincajun03
That's a crazy valuation
Posted on 11/30/23 at 4:56 pm to castorinho
I’m pulling back out of oil and gas right now. I got a handful, but I’m scared of getting burned like I did in 2015-2109.
Posted on 11/30/23 at 4:57 pm to Motownsix
Scared money dont make money
Posted on 11/30/23 at 4:58 pm to castorinho
quote:
That's a crazy valuation
Finance bros stacked
Long term investors fricked
Posted on 11/30/23 at 5:05 pm to ragincajun03
Wonder if Vicki H at Oxy secured another high interest loan from Warren Buffet for this acquisition - see her acquisition of Anadarko
Posted on 11/30/23 at 5:18 pm to LCrox
quote:
high interest loan
CoC on this transaction will be back breaking if they’re using debt. Idk anything about it but if they are every investor needs to dump that shite and run. The service expense will be brutal.
Posted on 11/30/23 at 5:20 pm to RefineryRich
quote:
Scared money dont make money
Hey, Billy, would you please come back and be our coach?
Posted on 11/30/23 at 5:28 pm to ragincajun03
A lot people chasing inventory at high prices.
Posted on 11/30/23 at 5:41 pm to Motownsix
quote:
I’m scared of getting burned like I did in 2015-2109.
Posted on 11/30/23 at 5:41 pm to billjamin
I recall Buffett loaned her $10 billion at like 7% interest when she could have gotten the money cheaper. In the beginning Oxy couldn’t pay Buffett one interest in cash so they gave him Oxy shares instead. It’s been a few years since the deal happened but this is what I remember. The Buffett deal infuriated Carl Icahn that he began effort to get seats on Oxy Board.
Posted on 11/30/23 at 8:56 pm to LCrox
Good time to be an employee at Oxy. Truck nuts incoming.
Posted on 11/30/23 at 8:57 pm to ragincajun03
How does this affect crawfish prices?
Posted on 11/30/23 at 9:57 pm to ragincajun03
Yes, slide me some backhand cash
Posted on 11/30/23 at 10:24 pm to ragincajun03
quote:
, if there’s at least any validity in these reports on Oxy’s behalf.
They did buy Anadarko a few years ago so it's not far fetched. They are still big into the chemical side as well.
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