Occidental (NYSE: OXY) reported Thursday that it has agreed to sell non-strategic acreage in the Permian Basin to a Colgate Energy Partners III, LLC, affiliate for $508 million.
Slated to close in the third quarter of this year, the definitive agreement will give Colgate approximately 25,000 net acres in the Southern Delaware Basin in Texas, Occidental noted in a written statement emailed to Rigzone. Occidental added the acreage currently produces approximately 10,000 barrels of oil equivalent per day from roughly 360 active wells. It plans to apply proceeds from the sale toward debt reduction.
“We continue to advance our divestiture and deleveraging goals while delivering value for our shareholders,” remarked Occidental President and 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 in assets.”
In October 2020 Occidental reported an approximately $825 million deal to sell its onshore Colombia assets to The Carlyle Group.
The map below highlights the Oxy acreage in Reeves and Ward counties, Texas, that Colgate is acquiring.
SOURCE: Business Wire
The transaction’s effective date is April 1, 2021, Midland-based Colgate noted in a separate written statement.
“The acquisition of these assets in the core of the Southern Delaware Basin is a transformational deal for Colgate that checks all of the boxes of our acquisition criteria,” commented Colgate Co-CEO Will Hickey. “It is a great mix of low decline production and high rate of return locations that will immediately compete for capital with our existing portfolio. 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.”
To contact the author, email mveazey@rigzone.com.