Houston-based Occidental Petroleum continues its divestment campaign with a new $508 million deal to sell Permian Basin acreage to Colgate Energy Partners III LLC, a Midland, Texas-based oil and gas producer.
The agreement, which is expected to close in the third quarter of 2021, includes approximately 25,000 net acres in the Southern Delaware Basin in Texas with current production of approximately 10,000 barrels of oil equivalent per day from about 360 active wells, the company said in a press release.
“We continue to advance our divestiture and deleveraging goals while delivering value for our shareholders,” said CEO Vicki Hollub. “This transaction brings our post-Colombia divestiture total to over $1.3 billion of the planned $2 billion to $3 billion, and since August 2019 we have divested more than $9 billion of assets.” Occidental sold its onshore assets in Colombia in 2020.
In a company statement, Colgate Co-CEO Will Hickey said that this is a transformational deal that checks all of the boxes of its acquisition criteria. The acquired acreage is adjacent to Colgate’s existing location in Reeves and Ward Counties and the company expects to have a five- to six-rig program running by the end of the year, bringing its total production for 2022 to about 75,000 barrels per day,
"Given the proximity to our current assets, we are confident that we can leverage our ongoing operations to maximize the value of this acquisition for our investors,” said Hickey.
