Occidental to acquire CrownRock in a deal worth $12 billion

The energy behemoth Occidental has revealed that it is purchasing Midland-based CrownRock LP, an oil and gas producer.

The deal, which is estimated to be worth $12 billion, includes taking on CrownRock's current debt in addition to cash and stock.

"We think that Occidental now has a stronger and more unique portfolio than it did before, thanks to the acquisition of CrownRock's assets. Vicki Hollub, president and chief executive officer of Occidental, said, "We found CrownRock to be a strategic fit, giving us the opportunity to build scale in the Midland Basin and positioning us to drive value creation for our shareholders with immediate free cash flow accretion."

Lime Rock Partners and CrownQuest Operating jointly own CrownRock LP.

With the goal of improving Occidental's financial position strategically, the acquisition is expected to result in higher free cash flow on a diluted share basis.

Operating under a reference price of $70 per barrel for WTI crude oil, the company expects to generate $1 billion in revenue in the first year after the acquisition.

(Sources: investing.com, reuters.com)