Occidental Petroleum to buy Permian producer CrownRock for $12 billion, raise dividend
Occidental Petroleum on Monday agreed to buy CrownRock, a major privately held energy producer that operates in the Permian Basin, for $12 billion.
The deal is latest in a spate of consolidation in the U.S .energy sector, particularly in the Permian, the largest oil-producing region in the U.S. The transaction is expected to close in the first quarter of 2024.
CrownRock is developing a 100,000-acre position in the Midland Basin, a portion of the Permian that spans 20 counties in western Texas. The Midland Basin produced 15% of U.S. crude in 2020, according to the U.S. Energy Information Agency.
The transaction will add 170,000 barrels of oil equivalent per day to Occidental’s production as well as 1,700 undeveloped locations to the company’s operations in the Permian.
Occidental will issue $9.1 billion in debt and about $1.7 billion in common stock to finance the transaction.
Occidental Petroleum
Jay L. Clendenin | Los Angeles Times | Getty Images
Occidental CEO Vicki Hollub said the company is purchasing CrownRock to increase its scale in the Midland Basin.
“It’s the scale, it’s the inventory, and all of that has helped now for us also to step up our dividend,” Hollub told CNBC’s “Squawk Box” on Monday. Occidental is raising its quarterly dividend to 22 cents a share from 18 cents a share beginning next year.
CrownRock is one of the last major private producers in the Permian alongside Endeavor Resources. The company is led Texas billionaire Timothy Dunn and backed by the Houston-based private equity firm Lime Rock Partners.
Occidental is the ninth-largest energy company in the U.S. with a market capitalization of $49.7 billion. Warren Buffett‘s Berkshire Hathaway owns about a 26% stake in the company. Occidental’s stock has fallen 10% this year. Its shares were down less than 1% in premarket trading Monday.
Hollub said Berkshire Hathaway was not involved in the CrownRock deal, though Occidental did discuss with Buffett how the company fits into its corporate strategy.
Occidental’s last major acquisition was its purchase of Anadarko Petroleum for $55 billion in 2019. The buy of Anadarko loaded the company with debt and sparked a bitter dispute with activist investor Carl Icahn, who sold the remainder of his stake in the company in 2022.
Hollub said Occidental’s goal is to slash its debt below $15 billion even with the $9.1 billion in obligations the company is assuming through the CrownRock acquisition. Occidental plans to do this by divesting some domestic assets that are not core to the company’s portfolio, the CEO said.
“The debt picture over the next two to three years is actually about what it would have been without this acquisition because we use the combination of cash flow and the divestitures to work that down,” Hollub said. “So the metrics are going to be about the same as they would have been.”
Occidental’s purchase of CrownRock is the third major deal in the energy sector in less than two months.
Exxon Mobil announced in October that it is acquiring Pioneer Natural Resources for about $60 billion. Pioneer is one of the largest producers in the Midland Basin, according to Enverus. Weeks later, Chevron announced it had agreed to purchase Hess for $53 billion.
Hollub said Exxon’s acquisition of Pioneer did not influence Occidental’s decision to purchase CrownRock.
When asked about falling oil prices, Hollub said Occidental expects U.S. crude to average $80 a barrel. West Texas Intermediate was trading around $71 on Monday. Hollub attributed dropping crude prices to record U.S. production.
“It would be prudent of U.S. producers to be careful in terms of putting too much supply in the market,” Hollub said.
She said the company is able to breakeven with oil at $40 a barrel: “We have the capability to continue to deliver value to keep our production and even grow our production modestly,” Hollub said.
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Baidu- and Geely-backed JiYue brand unveils ROBO X EV that goes 0-100 km/h in under 1.9 sec
JiYue, a Chinese EV brand focused on delivering all-electric “robocars” to the masses, has unveiled its latest model, and it’s quite a deviation from its previous EVs—but in the best way. Earlier today, JiYue launched the ROBO X supercar, designed for high-speed racing. By high speed, we mean 0-100 km/h acceleration in under 1.9 seconds. My mouth is watering.
JiYue has only existed since 2021, when parent tech company Baidu announced it was expanding from software development into physical EV production, joining forces with multinational automotive manufacturer Geely.
The new “robotic EV” marque initially launched as JIDU with $300 million in startup capital before garnering an additional $400 million in Series A funding, led by Baidu, in January 2022.
In August 2023, Geely took on a larger role in JIDU alongside a greater financial stake as the brand reimagined itself as JiYue, inheriting the JIDU logo and its flagship model, the 01 ROBOCAR.
In December 2023, Baidu and Geely unveiled a second model called the JiYue 07. It was born from JIDU’s ROBO-02 concept, which debuted in 2023 and was designed to compete against the Tesla Model 3 in China.
The 07 finally launched in China earlier this year with 545 miles of range. With an all-electric SUV and sedan on the market, JiYue has unveiled an exciting new entry in the form of a performance supercar called the ROBO X. Check it out:
JiYue’s new ROBO X EV is available for pre-order now
JiYue showcased its new ROBO X hypercar in front of the crowd at the 2024 Guangzhou Auto Show earlier today. Similar to previous models but with a unique spin, JiYue described the ROBO X as an AI smart-driving supercar that, for the first time, blends artificial intelligence and autonomous driving into a high-performance, race-ready EV.
When we say “high performance,” we mean a quad motor liquid-cooled drive system that can propel the ROBO X from 0 to 100 km/h (0 to 62 mph) in under 1.9 seconds. JiYue called the new ROBO X a “performance beast” with “the perfect balance of excellent aerodynamic performance and high downforce.” JiYue CEO Joe Xia was even bolder in his statements about the ROBO X:
For the next 20 years, the design of supercars will bear the shadow of Robo X. This is the best design in the history of Chinese automobiles today, and it is a landmark presence.
Fighter-style airflow ducts bolster the EV’s aerodynamics, efficiency, and overall posture. Per JiYue, the two-seater ROBO X is expected to deliver a maximum range of over 650 km (404 miles).
The new supercar features falcon-wing doors, a carbon fiber integrated frame, and a professional racing HALO safety system offering 360° of support. The interior features an AI smart cockpit with SIMO real-time feedback to give drivers an immersive racing experience.
Furthermore, JiYue said the vehicle will utilize parent company Baidu’s Apollo self-driving technology, which could make it the first electric supercar to apply pure-vision ADAS technology that enables track-level autonomous driving.
Following today’s unveiling of the ROBO X, JiYue has officially opened up pre-orders in China for RMB 49,999 ($6,915). That said, reservation holders will need to be patient as JiYue shared that it doesn’t expect to begin mass production of the ROBO X until 2027.
What do you think? Will people be talking about the ROBO X for the next 20 years?
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This week on Electrek’s Wheel-E podcast, we discuss the most popular news stories from the world of electric bikes and other nontraditional electric vehicles. This time, that includes the launch of the Lectric XPedition 2.0, Yamaha e-bikes pulling out of North America, LiveWire unveils an electric scooter concept, PNY readying its cargo e-scooters for pilot testing, Royal Enfield’s first electric motorcycle, and more.
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Crude oil futures were on pace Friday for loss for the week, as a supply gut and a strong dollar depresses the market.
U.S. crude oil is down more than 2% this week, while Brent has shed nearly 2%.
Here are Friday’s energy prices:
- West Texas Intermediate December contract: $68.56 per barrel, down 14 cents, or 0.2%. Year to date, U.S. crude oil has shed about 4%.
- Brent January contract: $72.36 per barrel, down 20 cents, or 0.28%. Year to date, the global benchmark has lost nearly 6%.
- RBOB Gasoline December contract: $1.99 per gallon, up 0.46%. Year to date, gasoline has fallen more than 1%.
- Natural Gas December contract: $2.70 per thousand cubic feet, down 2.98%. Year to date, gas has gained more than 4%.
The International Energy Agency has forecast a surplus of more than 1 million barrels per day in 2025 on robust production in the U.S. OPEC revised down its demand forecast for the fourth consecutive month as demand in China remains soft.
A strong dollar also hangs over the market, as the greenback has surged in the wake of President-elect Donald Trump’s election victory.
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