Occidental to Sell $1.2 Billion Assets in Permian, Rockies

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Occidental to Sell $1.2 Billion Assets in Permian, Rockies

Occidental Petroleum Corp. announced Tuesday two agreements to divest several United States assets in the Permian Basin and the Rocky Mountains to undisclosed buyers for a combined price of $1.2 billion as part of its debt management plan. The sale, expected to close this quarter, involves stakes not included in the Houston, Texas-based company’s near-term […]

The sale, expected to close this quarter, involves stakes not included in the Houston, Texas-based company’s near-term development plan, Occidental said in an online statement.

“The resulting proceeds will be applied to the company’s remaining 2025 debt maturities”, the hydrocarbon and chemical producer said.

Billionaire Warren Buffett-backed Occidental said it had achieved its near-term debt repayment goal of $4.5 billion in the fourth quarter of 2024.

Occidental launched a $4.5 billion-$6 billion divestiture program when it announced its merger with CrownRock LP late 2023. It announced the completion of the $12.4 billion purchase August 1, 2024.

“We were pleased to reach the near-term deleveraging milestone in the fourth quarter of 2024, within five months of closing the CrownRock acquisition, and seven months ahead of our goal”, commented president and chief executive Vicki Hollub.

“The transactions announced today continue to high-grade our portfolio and accelerate the progress toward achieving both our medium-term balance sheet deleveraging target and shareholder return pathway”.

The company said, “Occidental will continue to advance deleveraging via free cash flow and divestitures”.

It owed $1.14 billion in current maturities from long-term debt as of the end of 2024. Occidental accrued total current liabilities of $9.52 billion, according to annual results it filed with the Securities and Exchange Commission Tuesday.

It ended the year with $2.13 billion in cash and cash equivalents, while its total current assets stood at $9.07 billion.

Occidental logged a net loss of $297 million, or $0.32 per share, and adjusted income of $792 million, or $0.8 per share, for the fourth quarter of 2024. The adjustment was related to a new environmental liability that Occidental is contesting in court, according to a quarterly statement released separately Tuesday.

The adjusted figure beat the Zacks Consensus Estimate of $0.67. Occidental shares closed higher at $48.84 on the New York Stock Exchange on results day.

Oil and gas pre-tax income was $1.2 billion. Occidental produced 1.46 million barrels of oil equivalent a day (boed) in the October-December period, exceeding the midpoint of guidance by 13,000 boed thanks to domestic assets including the Permian and the Rockies.

It raised its proven and probable reserves to 4.6 billion boe as of year-end 2024, up from four billion boe at year-end 2023 mainly thanks to the CrownRock acquisition.

Occidental’s chemicals segment logged a $270 million pre-tax income. Midstream and marketing suffered a $134 million loss.

“Fourth quarter of 2024 after-tax items affecting comparability of $1.1 billion mainly comprised of booking a long-term environmental liability increase based on a recent federal court ruling”, Occidental said. “Occidental has appealed the ruling and will seek cost recovery from all potentially responsible parties.

“It is expected that the cash outlay for remediation costs will be expended over 10 to 20 years, or more”.

Occidental registered $3.6 billion in operating cash flow – $3.1 billion before working capital.

It increased its quarterly dividend by nine percent to $0.24 per share.

Earlier this month Buffett’s Berkshire Hathaway Inc. increased its ownership in Occidental to about 28 percent.

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