Occidental Petroleum has agreed to several purchase and sale transactions in the Permian Basin, US.
These deals are expected to add 3,500 barrels of oil equivalent per day to the company’s production.
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As part of the company’s divestiture programme, Occidental intends to reduce its Permian resources position by 13,000 net acres through divesting non-strategic acreage in Andrews, Martin and Pecos Counties.
In addition, the firm is looking to increase its acreage to enhance a future core development area in Glasscock County.
Occidental agreed to raise its ownership interests and become an operator of a CO2 enhanced oil recovery (EOR) property.
An agreement was signed to purchase US-based Hess’ interests in enhanced oil recovery (EOR) assets in the Permian Basin for $600m.
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By GlobalDataOccidental Petroleum president and CEO Vicki Hollub said: “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.”
According to Occidental, the net Permian resources transactions will generate proceeds of around $600m.
The company further added that it did not have any significant near-term development plans for the divested acres, while its acquired acreage provides additional value within the future development area.
The assets to be purchased from Hess include working interests in the Seminole-San Andres Unit and the Seminole gas processing plant in Texas.
Other assets purchased by Occidental include source fields at Bravo Dome Unit and West Bravo Dome Unit in New Mexico, as well as the Sheep Mountain and Rosebud CO2 pipelines.
The total purchase of these assets is valued at $600m.
Occidental has been maintaining an ownership interest in these EOR assets since 2000. Seminole-San Andres Unit will become Occidental’s largest domestic oil producing EOR unit.
All proposed transactions are expected to be completed by the end of this year's third quarter.
