Occidental Petroleum's Strategic Asset Sale Plan Amid Pending Acquisition

Monday, 6 May 2024, 10:15

Occidental Petroleum is gearing up to sell its Permian Basin assets to avoid a debt dilemma similar to past mistakes. The company plans to sell a portion of its assets to help pay off debt following the CrownRock acquisition. By kickstarting the asset sale early, Occidental aims to secure a strong financial position for the future.
https://store.livarava.com/5a4a8007-0b92-11ef-a6c2-63e1980711b2.jpg
Occidental Petroleum's Strategic Asset Sale Plan Amid Pending Acquisition

Starting the sales process

Occidental Petroleum is exploring the sale of its assets in the Barilla Draw region of Texas, part of the prolific Permian Basin. The company is looking to tap into the strong buyer interest for the assets and could fetch over $1 billion from the sale.

This move aligns with the company's strategy to sell $4.5 billion-$6 billion in assets to repay debt after acquiring CrownRock. Occidental plans to reduce its debt principle by at least $4.5 billion through asset sales and free cash flow, aiming to maintain its investment-grade credit rating.

A plan to get ahead of the situation

Occidental Petroleum is on track to close a $12 billion deal for CrownRock, significantly increasing its debt to nearly $29 billion. Learning from past experiences, the company is taking early steps to avoid repeating its 2019 Anadarko Petroleum acquisition situation.

Starting the sales process early and capitalizing on the strong market environment is a wise move to prevent potential financial risks for Occidental Petroleum.


This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.


Related posts


Newsletter

Get the most reliable and up-to-date financial news with our curated selections. Subscribe to our newsletter for convenient access and enhance your analytical work effortlessly.

Subscribe