US shale player Oxy offloads $508mn in south Delaware assets
US shale oil and gas producer Occidental Petroleum (Oxy) has signed a definitive deal to sell non-core acreage in the US south Delaware basin to Colgate Energy Partners III, the companies said on June 10.
The 25,000 net acres in the Reeves and Ward counties of Texas produce around 10,000 barrels of oil equivalent/day from 360 active wells. Oxy will use proceeds from the deal to pay down its debt, while Colgate is looking to build up its existing position in the area.
"We continue to advance our divestiture and deleveraging goals while delivering value for our shareholders,” Oxy CEO Vicki Hollub said. "This transaction brings our post-Colombia divestiture total to over $1.3bn of the planned $2bn to $3bn, and since August 2019 we have divested more than $9bn of assets."
Colgate CEO Will Hickey said the acquisition was "a transformation deal" for the company.
"It is a great mix of low decline production and high rate of return locations that will immediately compete for capital with our existing portfolio," he said. "Given the proximity to our current assets, we are confident that we can leverage our ongoing operations to maximise the value of this acquisition for our investors."
The deal is expected to be closed in the third quarter and will be backdated to April 1, 2021.