U.S. oil and gas giant Occidental Petroleum (OXY) is selling some of its assets in the Delaware Basin of Texas and New Mexico to Permian Resources (PR) for $818 million U.S.
Occidental said in a news release that it is selling the assets to raise cash that can be used to pay down its debt.
The move comes as Occidental Petroleum takes on additional debt to fund its $12 billion U.S. takeover of privately held rival CrownRock.
Management at Occidental Petroleum have said that they could sell up to $6 billion U.S. worth of assets within 18 months of closing the CrownRock deal.
Even before the CrownRock deal is finalized, Occidental Petroleum has debt of about $18 billion U.S. Company executives have said that reducing the debt load is a strategic priority.
The asset sale to Permian Resources involves 29,500 net acres of land in the Barilla Draw Field of the Permian Basin, the largest shale oil area in the world.
The sale to Permian Resources is expected to close in this year’s third quarter.
Warren Buffett’s holding company Berkshire Hathaway (BRK.A/BRK.B) is Occidental Petroleum’s largest shareholder with a 29% stake in the energy company.
The stock of Occidental Petroleum has declined 4% in the last 12 months to trade at $60.54 U.S. per share.
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