Why Occidental Petroleum Is Spending $12 Billion To Buy CrownRock

By
Bill McColl
Bill McColl
Full Bio

Bill McColl has 25+ years of experience as a senior producer and writer for TV, radio, and digital media leading teams of anchors, reporters, and editors in creating news broadcasts, covering some of the most notable news stories of the time.

Learn about our editorial policies
Published December 11, 2023
Sign outside Occidental Petroleum Corp. headquarters in Carlsbad, New Mexico.

Callaghan O'Hare / Bloomberg via Getty Images

Key Takeaways

  • Occidental Petroleum Corp. said Monday that it was buying Midland, Texas-based oil and gas producer CrownRock L.P. for $12 billion.
  • Occidental Petroleum said the deal would boost its assets in the Midland region of the petroleum-rich Permian Basin.
  • Occidental also raised its quarterly dividend to 22 cents per share from 18 cents.

With a $12 billion price tag, Occidental Petroleum Corp.'s (OXY) deal to buy Midland, Texas-based oil and gas producer CrownRock L.P, is essentially a move to expand the company's reach in the Permian Basin and other petroleum-rich regions.

Occidental said the purchase would complement and enhance its Permian Basin portfolio by adding about 170,000 barrels of oil equivalent per day of “high-margin, lower-decline unconventional production in 2024, as well as approximately 1,700 undeveloped locations.” CrownRock L.P. is a joint venture of CrownQuest Operating LLC and Lime Rock Partners.

Chief Executive Officer (CEO) Vicki Hollub said the addition of CrownRock assets “adds to the strongest and most differentiated portfolio that Occidental has ever had,” noting that it will help the company “build scale” in the Midland section of the Permian Basin. 

The transaction is expected to close in the first quarter of next year.

The Occidental move comes less than two months after two other blockbuster deals in the oil patch: Exxon Mobil Corp. (XOM) buying Pioneer Natural Resources (PXD) for about $60 billion and Chevron Corp. (CVX) acquiring Hess Corp. (HES) for $53 billion.

In addition to the CrownRock purchase, Occidental announced it was increasing its quarterly dividend by 4 cents to 22 cents a share. It explained that the move was “consistent with the company’s shareholder return priorities.”

Shares of Occidental Petroleum, which is a favorite of famed investor Warren Buffett, rose about 0.2% to $56.56 at midday Monday after the news.

OXY share price performance since 2019

TradingView
Do you have a news tip for Investopedia reporters? Please email us at
Article Sources
Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy.

  1. Occidental Petroleum. "Occidental To Acquire CrownRock, Strengthening Its U.S. Onshore Portfolio with Premier Permian Basin Assets."

Take the Next Step to Invest
×
The offers that appear in this table are from partnerships from which Investopedia receives compensation. This compensation may impact how and where listings appear. Investopedia does not include all offers available in the marketplace.