Category Archives: News

Occidental to Acquire CrownRock, Strengthening its U.S. Onshore Portfolio with Premier Permian Basin Assets

  • Acquisition, valued at approximately $12.0 billion, generates immediate free cash flow accretion 
  • CrownRock’s well-positioned assets expand Occidental’s scale in the Midland Basin 
  • CrownRock’s development-ready inventory high-grades Occidental’s premier Permian Basin portfolio and increases low-breakeven inventory 
  • Expected to add high-margin, lower-decline unconventional production of approximately 170 Mboed in 2024 
  • Supports quarterly dividend increase of 22% to $0.22 per share 
  • CrownRock’s operating team has a strong track record of running safe, efficient and highly productive assets and adds to Occidental’s capabilities 

HOUSTON — December 11, 2023 — Occidental (NYSE: OXY) today announced it entered into a purchase agreement to acquire Midland-based oil and gas producer CrownRock L.P., a joint venture of CrownQuest Operating LLC and Lime Rock Partners, for cash and stock in a transaction valued at approximately $12.0 billion, including the assumption of CrownRock’s debt. 

Highlights include: 

  • Expected to deliver increased free cash flow on a diluted share basis, including $1 billion in the first year based on $70 per barrel WTI 
  • Complements and enhances Occidental’s premier Permian portfolio with the addition of approximately 170 thousand barrels of oil equivalent per day (Mboed) of high-margin, lower-decline unconventional production in 2024, as well as approximately 1,700 undeveloped locations 
  • Increases Occidental’s Permian unconventional sub-$40 breakeven inventory by 33% 
  • CrownRock’s over 94,000 net acres of premium stacked pay assets and supporting infrastructure are well positioned alongside Occidental’s legacy Midland Basin business 
  • Increased cash flow, along with proceeds from a new $4.5-$6.0 billion divestiture program, will enable Occidental to reduce its debt principal by at least $4.5 billion within 12 months and expect to retain its investment grade credit ratings 
  • Combined position builds upon Occidental’s subsurface understanding and leading well performance, while providing operational flexibility and upside 

Occidental also announced its intention to increase the quarterly common stock dividend per share by $0.04 to $0.22, beginning with the February 2024 declaration, consistent with the company’s shareholder return priorities. 

“We believe the acquisition of CrownRock’s assets adds to the strongest and most differentiated portfolio that Occidental has ever had. We found CrownRock to be a strategic fit, giving us the opportunity to build scale in the Midland Basin and positioning us to drive value creation for our shareholders with immediate free cash flow accretion,” said Occidental President and Chief Executive Officer Vicki Hollub. “We are excited about combining CrownRock’s high-performing team into our organization and expect to continue Occidental’s exceptional operational and financial results for years to come.” 

“Occidental’s purchase of CrownRock is a multi-win proposition for CrownRock, our employees and customers, and our community,” said CrownQuest Operating Chief Executive Officer Tim Dunn. “We congratulate Occidental and look forward to seeing their historically successful company continue to grow and prosper.” 

Transaction Details

The transaction’s total consideration is approximately $12.0 billion. Occidental intends to finance the purchase with the incurrence of $9.1 billion of new debt, the issuance of approximately $1.7 billion of common equity and the assumption of CrownRock’s $1.2 billion of existing debt. The transaction is expected to close in the first quarter of 2024, subject to customary closing conditions and the receipt of regulatory approvals. 

Additional Highlights

  • • 1,700 undeveloped locations, including 1,250 development-ready at sub-$60 WTI breakeven 
  • • 750 locations are sub-$40 WTI breakeven, increasing Occidental’s U.S. Onshore sub-$40 breakeven inventory by 25% 
  • • Greater basin diversification at top end of portfolio advances corporate returns and optionality 
  • • Well-understood and rich subsurface is adjacent to some of the most prolific wells in the basin 
  • • Majority of inventory is located in largely clean and undeveloped sections, providing ample opportunity for Occidental customization and upside 
  • • Substantive surface acreage of nearly 10,000 acres, along with hundreds of miles of gathering and water infrastructure, provides material operational efficiency 
  • • Acquisition expected to advance Occidental’s water recycling capability with assets that include four recycling plants 
  • • Nearly 100% operated position with high average working interest of 93% amplifies Occidental’s capabilities 
  • • Added position enables Occidental to build upon its deep horizon Barnett well performance leadership, in which new well production was 34% better than basin average 

Conference Call/Webcast

Occidental will hold a conference call to discuss the acquisition at 11 a.m. Eastern/10 a.m. Central on December 11, 2023. The conference call may be accessed by calling 1-866-871-6512 (international callers dial 1-412-317-5417) or via webcast at oxy.com/investors. Participants can register for the conference call at https://dpregister.com/sreg/10184704/fb22d65000. 

Additional details are available in a presentation on the investor section on www.oxy.com. 

Advisors

Occidental’s financial advisor is BofA Securities and an affiliate thereof is providing committed financing. Occidental’s legal advisor is Latham & Watkins LLP. 

CrownRock’s joint-lead financial advisors are Goldman Sachs & Co. LLC and TPH&Co, the energy business of Perella Weinberg Partners. CrownRock’s legal advisor is Vinson & Elkins LLP. 

About Occidental

Occidental is an international energy company with assets primarily in the United States, the Middle East and North Africa. We are one of the largest oil and gas producers in the U.S., including a leading producer in the Permian and DJ basins, and offshore Gulf of Mexico. Our midstream and marketing segment provides flow assurance and maximizes the value of our oil and gas. Our chemical subsidiary OxyChem manufactures the building blocks for life-enhancing products. Our Oxy Low Carbon Ventures subsidiary is advancing leading-edge technologies and business solutions that economically grow our business while reducing emissions. We are committed to using our global leadership in carbon management to advance a lower-carbon world. Visit oxy.com for more information. 

AboutCrownQuest Operating

CrownQuest Operating is a privately owned company based in Midland, TX. It has managed the CrownRock LP partnership since its inception in 2007. CrownQuest and its predecessors have operated in the Permian Basin since their founding in 1996. The company continues its other business interests, primarily in land and minerals management. Visit crownquest.com for more information. 

About Lime Rock Partners

Since its inception in 1998, Lime Rock Management has raised over $10.0 billion in private equity funds and affiliated co-investment vehicles for investment in the energy industry through three strategies: Lime Rock Partners, investors of growth capital in E&P and oilfield service companies; Lime Rock Resources, acquirers and operators of oil and gas properties in the United States; and Lime Rock New Energy, investors of growth capital in new energy companies in North America. With over 100 portfolio company investments made over the last 25 years, Lime Rock Partners is a creative investment partner in building differentiated oil and gas businesses, side by side, with entrepreneurs every day. Visit lrpartners.com for more information. 

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to statements about Occidental’s expectations, beliefs, plans or forecasts. Future declarations of quarterly dividends and the establishment of future record and payment dates are at the discretion of Occidental’s Board of Directors and will be based on a number of factors, including Occidental’s future financial performance and other investment priorities. All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including, but not limited to: any projections of revenue or other financial items or future financial position or sources of financing; any statements of the plans, strategies and objectives of management for future operations or business strategy; any statements regarding future economic conditions or performance; any statements of belief; and any statements of assumptions underlying any of the foregoing. 

Words such as “estimate,” “project,” “will,” “should,” “could,” “may,” “anticipate,” “plan,” “intend,” “believe,” “expect,” “target,” “commit,” “advance,” or similar expressions that convey the prospective nature of events or outcomes are generally indicative of forward-looking statements. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release unless an earlier date is specified. Unless legally required, Occidental does not undertake any obligation to update, modify or withdraw any forward-looking statements as a result of new information, future events or otherwise. 

Forward-looking statements involve estimates, expectations, projections, goals, forecasts, assumptions, risks and uncertainties. Actual outcomes or results may differ from anticipated results, sometimes materially. Factors that could cause actual results to differ include, but are not limited to: the ultimate outcome of the acquisition of CrownRock by Occidental; Occidental’s ability to consummate the proposed transaction with CrownRock; the conditions to the completion of the proposed transaction; that the regulatory approvals required for the proposed transaction may not be obtained on the terms expected or on the anticipated schedule or at all; Occidental’s ability to finance the proposed transaction with CrownRock; Occidental’s indebtedness, including the indebtedness Occidental expects to incur and/or assume in connection with the proposed transaction with CrownRock and the need to generate sufficient cash flows to service and repay such debt; Occidental’s ability to meet expectations regarding the timing, completion and accounting and tax treatments of the transactions contemplated by the definitive agreement with CrownRock; the possibility that Occidental may be unable to achieve expected free cash flow accretion and other anticipated benefits within the expected time-frames or at all and to successfully integrate CrownRock’s operations with those of Occidental; that such integration may be more difficult, time-consuming or costly than expected; that operating costs, customer loss and business disruption (including, without limitation, difficulties in maintaining relationships with employees, customers or suppliers) may be greater than expected following the proposed transaction or the public announcement of the proposed transaction; the retention of certain key employees of CrownRock; potential litigation relating to the potential transaction that could be instituted against Occidental or its directors; rating agency actions and Occidental’s ability to access short- and long-term debt markets on a timely and affordable basis; Occidental’s ability to complete the contemplated divestiture program within the expected time-frames or at all; and general economic conditions that are less favorable than expected. 

Additional information concerning these and other factors that may cause Occidental’s results of operations and financial position to differ from expectations can be found in Occidental’s filings with the SEC, including Occidental’s 2022 Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. 

Contacts
MediaInvestors
Eric Moses Neil Backhouse 
713-497-2017 713-366-5604 
eric_moses@oxy.com neil_backhouse@oxy.com

CrownRock Announces Pricing of $400.0 Million Offering of Senior Notes Due 2029

PRESS RELEASE


MIDLAND, Texas, April 13, 2021 /PRNewswire/ — CrownRock, L.P. (“CrownRock”), an oil and gas producing joint venture of CrownQuest Operating and Lime Rock Partners, today announced the pricing of a private offering of $400.0 million principal amount of 5.000% senior unsecured notes due 2029 (the “notes”) of CrownRock and CrownRock Finance, Inc. CrownRock intends to distribute the proceeds to CrownRock Holdings, L.P., its sole limited partner and sole owner of CrownRock’s general partner, to fund its obligations under a partial and conditional redemption of CrownRock Holdings, L.P.’s Series A Preferred Units. The offering is expected to close on April 20, 2021, subject to the satisfaction of customary closing conditions.

The notes have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or any state securities laws; and unless so registered, the notes may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. The notes are expected to be eligible for trading by qualified institutional buyers under Rule 144A under the Securities Act and non-U.S. persons under Regulation S under the Securities Act.

This press release is neither an offer to sell nor a solicitation of an offer to buy the notes or any other securities and shall not constitute an offer to sell or a solicitation of an offer to buy, or a sale of, the notes or any other securities in any jurisdiction in which such offer, solicitation or sale is unlawful.

CrownRock, L.P. Announces New Credit Agreement

PRESS RELEASE


CrownRock, L.P. Announces New Credit Agreement with Extended Maturity Date, Increased Borrowing Base and Commitment Size, and Decreased Interest Margins


MIDLAND, TX—February 11, 2019 /PRNewswire/—CrownRock, L.P . (“CrownRock” or the “Partnership”) announced today that it has entered into an amended and restated credit agreement with respect to the senior secured revolving credit facility (the “Facility”). The agreement extends the maturity date of the Facility until February 8, 2024, increases the borrowing base by 19% to $850 million and increases the maximum commitments of the lenders from $1 billion to $2 billion. Additionally, the interest rate margins on borrowings under the Facility decreased by 100 basis points. The increase in the borrowing base amount reflects the significant reserve growth from the Partnership’s existing Midland Basin assets.

CrownRock has initially elected an aggregate commitment amount of $600 million, an increase of $100 million from the previous elected commitment amount. The Facility is led by JPMorgan Chase Bank, N.A., as Administrative Agent, and co-arranged by JPMorgan Chase Bank, N.A., BMO Capital Markets Corp., Capital One, National Association, Citibank, N.A., MUFG Union Bank, N.A., PNC Bank, National Association, TD Securities (USA) LLC and Wells Fargo Securities LLC. The bank syndicate includes three new lending institutions for a total of 16 participating banks. CrownRock currently has no outstanding borrowings under the Facility.

CrownRock has pledged substantially all of its producing oil and natural gas properties to secure the repayment of indebtedness under the revolving credit facility.

About CrownRock, L.P.

CrownRock is an independent oil and natural gas company headquartered in Midland, Texas engaged in the acquisition, development, exploitation and exploration of oil and natural gas properties. The Company’s assets are located in Texas, New Mexico and Utah, and its operations are primarily focused on the development of its core Permian Basin assets.

Source: CrownRock, L.P.

Curt F. Kamradt, CPA, CGMA
VP — Finance & Chief Accounting Officer CrownQuest Operating, LLC
Direct Ph.: 432-818-0344
E-mail: ckamradt@crownquest.com

US 5245179v.4

CrownRock Announces Pricing of Private Offering of Additional Senior Notes Due 2025

MIDLAND, Texas, May 17, 2018 /PRNewswire/ — CrownRock, L.P. (“CrownRock”), an oil and gas producing joint venture of CrownQuest Operating and Lime Rock Partners, today announced the pricing of its private offering of $185 million aggregate principal amount of 5.625% senior notes due 2025 (the “new notes”) at an issue price of 98.260% of par. The new notes are being offered as additional notes to the existing $1 billion aggregate principal amount of 5.625% senior notes due 2025 that were issued in October 2017, all of which remain outstanding (the “existing notes”). The new notes will have identical terms, other than the issue date and issue price, and will constitute part of the same class as the existing notes. CrownRock intends to use the proceeds from the offering for general partnership purposes, including the funding of a portion of its capital development plan. The offering is expected to close on May 22, 2018, subject to the satisfaction of customary closing conditions.

The new notes have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or any state securities laws; and unless so registered, the new notes may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. The new notes are expected to be eligible for trading by qualified institutional buyers under Rule 144A under the Securities Act and non-U.S. persons under Regulation S under the Securities Act.

This press release is neither an offer to sell nor a solicitation of an offer to buy the new notes or any other securities and shall not constitute an offer to sell or a solicitation of an offer to buy, or a sale of, the new notes or any other securities in any jurisdiction in which such offer, solicitation or sale is unlawful.

CrownRock Announces Private Offering of Additional Senior Notes Due 2025

MIDLAND, Texas, May 17, 2018 /PRNewswire/ — CrownRock, L.P. (“CrownRock”), an oil and gas producing joint venture of CrownQuest Operating and Lime Rock Partners, today announced the commencement of a private offering, subject to market and other conditions, of $150 million principal amount of 5.625% senior notes due 2025 (the “new notes”). The new notes are being offered as additional notes to the existing $1 billion aggregate principal amount of 5.625% senior notes due 2025 that were issued in October 2017, all of which remain outstanding (the “existing notes”). The new notes will have identical terms, other than the issue date and issue price, and will constitute part of the same class as the existing notes. CrownRock intends to use the proceeds of the proposed offering for general partnership purposes, including the funding of a portion of CrownRock’s capital development plan.

The securities to be offered have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or any state securities laws; and unless so registered, the securities may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. The new notes are expected to be eligible for trading by qualified institutional buyers under Rule 144A under the Securities Act and non-U.S. persons under Regulation S under the Securities Act.

This press release is neither an offer to sell nor a solicitation of an offer to buy the new notes or any other securities and shall not constitute an offer to sell or a solicitation of an offer to buy, or a sale of, the new notes or any other securities in any jurisdiction in which such offer, solicitation or sale is unlawful.

CrownRock Holdings, L.P. Announces Perpetual Preferred Equity Investment

PRESS RELEASE

MIDLAND, TX—January 4, 2018 /PRNewswire/—CrownRock Holdings, L.P. (“CrownRock”), an oil and gas producing joint venture of CrownQuest Operating and Lime Rock Partners, announced today that CrownRock has closed a $475 million perpetual preferred equity investment from funds managed by Magnetar Capital (“Magnetar”) and EIG Global Energy Partners (“EIG”), respectively.

CrownRock is a newly-formed holding company that wholly owns CrownRock, L.P., through which it conducts all of its oil and gas operations. The formation of CrownRock as a holding company resulted in the same ownership and voting structures in CrownRock that existed in CrownRock, L.P. immediately before the formation of the holding company.

Tim Dunn, CEO of CrownQuest Operating, commented, “We are pleased to welcome Magnetar and EIG as equity investors in CrownRock. Their investment will help support both Lime Rock and CrownQuest’s longer-term growth objectives for CrownRock.”
Jefferies LLC acted as lead financial advisor and Credit Suisse acted as financial advisor to CrownRock and Lime Rock in connection with the transaction. Vinson & Elkins L.L.P. acted as legal counsel to CrownRock, and Weil, Gotshal & Manges LLP acted as legal counsel to Magnetar and EIG.
The securities offered in this private placement have not been registered under the Securities Act of 1933 (the “Securities Act”) or any state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements of the Securities Act and applicable state laws.
This press release shall not constitute an offer to sell or a solicitation of an offer to buy the securities described herein.

About CrownRock
CrownRock is an independent oil and natural gas company headquartered in Midland, Texas engaged in the acquisition, development, exploitation and exploration of oil and natural gas properties. The Company’s assets are located in Texas, New Mexico and Utah, and its operations are primarily focused on the development of its core Permian Basin assets.

About Magnetar
Founded in 2005, Magnetar is a leading alternative asset manager with assets under management of $14.0 billion as of December 1, 2017. For more than 10 years, Magnetar’s team has actively invested in the North American energy markets. The firm is headquartered in Evanston, Illinois, and operates satellite offices in Houston, New York, London and Minneapolis.

About EIG
EIG Global Energy Partners specializes in private investments in energy and energy-related infrastructure on a global basis and has $17.0 billion under management as of September 30, 2017. Since 1982, EIG has been one of the leading providers of institutional capital to the global energy industry, providing financing solutions across the balance sheet for companies and projects in the oil and gas, midstream, infrastructure, power and renewables sectors globally. EIG has invested over $24 billion in more than 320 portfolio investments in 36 countries. EIG is headquartered in Washington, D.C., with offices in Houston, London, Sydney, Rio de Janeiro, Hong Kong and Seoul. For more information, please visit www.eigpartners.com.

Cautionary Statement Regarding Forward-Looking Information
Any statements contained in this press release that are not historical facts (including without limitation statements to the effect that CrownRock “believes,” “expects,” “anticipates,” “plans,” “intends,” “foresees” or other similar expressions) are forward-looking statements. These forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond CrownRock’s control, and based on its expectations, which reflect estimates and assumptions made by CrownRock’s management. Although CrownRock believes such estimates and assumptions to be reasonable, they are inherently uncertain and involve a number of risks and uncertainties that are beyond CrownRock’s control. In addition, CrownRock’s management’s assumptions about future events may prove to be inaccurate. CrownRock’s management cautions all readers that any forward-looking statements contained in this press release are not guarantees of future performance, and CrownRock cannot assure any reader that such statements will be realized or the forward-looking events and circumstances will occur. CrownRock specifically disclaims all responsibility to publicly update any information contained in a forward-looking statement or any forward-looking statement except as required by law.

Source: CrownRock Holdings, L.P.

Curt F. Kamradt, CPA, CGMA
VP — Finance & Chief Accounting Officer
CrownQuest Operating, LLC
Direct Ph.: 432-818-0344
E-mail: ckamradt@crownquest.com