TEXAS, USA — While Occidental does have a deal in place to acquire CrownRock, it has reached a slight delay.
However, it hasn't stopped oil and gas production in the Permian Basin from going up.
This acquisition would allow Oxy to be able to open up oil and gas production to a larger part of the Permian Basin.
“CrownRock is a major independent producer of oil and gas. The Permian Basin has a lot of shale resources that it controls," said Ray Perryman of The Perryman Group. "Oxy is a much larger global company and, with this acquisition, they'll have a greater presence in the Permian Basin and be able to increase their efficiencies and development of more reserves and things of that nature.”
According to Perryman delays like this for a deal of this magnitude is commonplace.
“Every time you have a deal of this size, it has to go to the Federal Trade Commission to evaluate its impact on competition and consumers in the marketplace," Perryman said. "They've asked for some more time, it's more information to review and that's caused a delay.”
When companies make major acquisitions like this, it gives them more of an opportunity to get creative when it comes to oil and gas production.
“All of them are designed to allow companies to reduce cost to be more competitive," Perryman said. "It will also encourage more research and development to find new technologies to recover more of the oil and to reduce the carbon content as we move forward with climate issues.”
Oil and gas production is still going up despite the delay in the deal, with Perryman saying that up to six million barrels of oil are produced a day in the Permian Basin alongside 24 billion cubic feet of natural gas.
Oxy is going to need proper manpower to keep up the tempo… which leads Perryman to believe that this should have little effect on the workers.
“They're still going to need the people out there to produce the oil in the fields and they’re still going to need the support groups," Perryman said. "I don’t think you’ll see any shifting in personnel or anything in that nature because in essence, it’s a process that requires a certain number of people with certain skills and abilities to do it.”
Oxy told NewsWest 9 in a statement that, "We believe the transaction positions Oxy to deliver immediate and significant free cash flow per diluted share and build better scale in the midland basin along with a unique opportunity to high-grade our premier U.S. onshore asset portfolio. We are looking forward to working with the CrownRock employees as they join us after close."
The acquisition is expected to be finalized in the third quarter of 2024.