Oxy's Permian Purchases | Russell T. Rudy Energy LLC
Two years ago Occidental Petroleum Corporation (OXY) spun off its California properties and moved its corporate headquarters from Los Angeles to Houston as part of a strategy to focus on the Permian Basin of West Texas and Southeast New Mexico. “Oil Voice” now reports the latest step in the implementation of this strategy: https://rudyenergy.com/anadarkos-3-ds/purchase of a number of assets ranging from exploration acreage to Enhanced Oil Recovery (EOR) projects in mature fields in the area. In the aggregate, these acquisitions are valued at approximately $2 billion and will be funded with cash on hand.
According to Oxy CEO Vicki Holub, “These transactions further complement and solidify Occidental’s dominant position in the Permian Basin. They leverage our existing infrastructure, utilize our strong balance sheet and create additional operating synergies.”
The basket of assets includes 59,000 acres of leasehold, 35,000 of which are in Reeves and Pecos counties in Texas. These are in the Delaware Basin which is considered the hottest exploration and production prospect in the U. S. These leases are in areas where Oxy already either operates or has a working interest. In some cases, the additional acreage offsets current operations and will enable the company to drill longer lateral legs on horizontal wells. This will in turn lower the per unit costs of incremental production. In some cases, the additional interest acquired via these purchases will enable the company to gain operatorship, thereby providing additional flexibility and the opportunity to spread infrastructure costs over more properties.
The assets acquired include 68 horizontal wells which are producing about 7,000 barrels of oil equivalent per day (boepd). Oxy anticipates an additional 700 new drilling locations as well, which will target the Wolfcamp A and B as well as the Bone Springs formations. The company also foresees upside potential from infill wells and additional zones.
Oxy will also acquire another 4,000 boepd from mature assets which are currently being produced via CO2 injection. These represent 41 million boe of proved reserves.
To read the article in its entirety, please go to http://www.oilvoice.com/n/Occidental-Petroleum-acquires-Permian-Basin-acreage/0a2da541e748.aspx .
Russell T. Rudy Energy, LLC buys oil, gas and mineral interests nationwide. Please call (800-880-0940), or write (info@rudyenergy.com ) to let us know if you agree, disagree or would just like to comment on this, or any of our posts.
