Occidental Petroleum Corporation has announced that it is divesting some of its non-strategic assets in the Permian Basin and at the same time is buying a new EOR projects in the Permian.
Occidental in a statement said it will reduce its Permian Resources position by 13,000 net acres, divesting non-strategic acreage in Andrews, Martin and Pecos Counties but will be adding acreage in Glasscock County. Occidental will make US$600 million from the sale.
Vicki Hollub, president and chief executive officer said: “By monetising 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.”
Occidental will also acquire new stakes in the basin from Hess Corp for $600 million. The EOR transaction includes the acquisition of working interests in the Seminole-San Andres Unit, a premier CO2 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 CO2 pipelines.
The deal should close in early August 2017.
“These transactions support our pathway to breakeven at $50 after dividend and production growth and our long-term, returns-focused value proposition. The combined results accelerate cash flow and enhance our future returns by exchanging low-priority development acreage for low decline, low capital intensity EOR production that has significant opportunity for value improvement,” added Vicki Hollub.