Occidental Closes $3.9B Deal, Reveals How Much It's Divested Since Acquiring Anadarko
By Olivia Pulsinelli – Senior web editor
Houston Business Journal
Sep 30, 2019, 8:16am CDT
Houston-based Occidental Petroleum Corp. (NYSE: OXY) has been planning to sell $10 billion to $15 billion worth of assets since inking a deal to acquire The Woodlands-based Anadarko Petroleum Corp. earlier this year.
The $55 billion acquisition, including the assumption of debt, closed Aug. 8, and Occidental provided an update on its divestiture and deleveraging efforts on Sept. 30.
According to a press release, the completed efforts include part of a previously announced divestiture, a recent stock sale and a joint venture.
Sale of Anadarko's Africa assets to Total SA (NYSE: TOT)
When the final offer to acquire Anadarko was announced in May, Occidental also announced that Paris-based Total would acquire Anadarko’s Algeria, Ghana, Mozambique and South Africa assets for $8.8 billion if the former deal closed.
So far, the $3.9 billion Mozambique portion has closed, per the release. Mozambique is expected to receive $880 million in capital gains tax from the sale, according to multiple media reports.
Occidental and Total are still working to close the remaining Africa transactions in Algeria, Ghana and South Africa, per the release.
Sale of Plains stock
Earlier this month, Occidental announced it would sell off its stake in Houston-based Plains All American Pipeline LP (NYSE: PAA) and its general partner in two public offerings expected to generate about $650 million in net proceeds for Occidental. Those sales have been completed.
Colombian oil company joint venture
In the release, Occidental also listed its joint venture with Colombia’s state-owned oil company, Ecopetrol, among its divestiture and deleveraging efforts. The JV will develop Occidental's acreage in the Midland Basin, a subsection of the Permian Basin.
The companies will split the joint venture 51-49, favoring Oxy, which will be the JV operator. Ecopetrol will pay Oxy $750 million in cash up front and fund $750 million of the first $1 billion of Occidental’s share of the development costs. Occidental will contribute 97,000 net acres in the Midland Basin.
The deal, which is expected to close in the fourth quarter, will allow Oxy to make an early move on its Midland Basin assets while acting as a gateway to the north for Ecopetrol’s fracking ambitions.
Occidental said in the Sept. 30 release that it remains on track to meet its goal of $10 billion to $15 billion of planned asset sales and "remains confident in its deleveraging strategy."
“We have made progress quickly on our post-acquisition divestiture and deleveraging goals and remain confident in our ability to realize the full value of the Anadarko acquisition for our shareholders,” Vicki Hollub, president and CEO of Occidental, said in the release. “Upon completion of our recent initiatives, we will have reached approximately $10 billion of our targeted divestitures with more to follow.”
Houston Business Journal
Sep 30, 2019, 8:16am CDT
Houston-based Occidental Petroleum Corp. (NYSE: OXY) has been planning to sell $10 billion to $15 billion worth of assets since inking a deal to acquire The Woodlands-based Anadarko Petroleum Corp. earlier this year.
The $55 billion acquisition, including the assumption of debt, closed Aug. 8, and Occidental provided an update on its divestiture and deleveraging efforts on Sept. 30.
According to a press release, the completed efforts include part of a previously announced divestiture, a recent stock sale and a joint venture.
Sale of Anadarko's Africa assets to Total SA (NYSE: TOT)
When the final offer to acquire Anadarko was announced in May, Occidental also announced that Paris-based Total would acquire Anadarko’s Algeria, Ghana, Mozambique and South Africa assets for $8.8 billion if the former deal closed.
So far, the $3.9 billion Mozambique portion has closed, per the release. Mozambique is expected to receive $880 million in capital gains tax from the sale, according to multiple media reports.
Occidental and Total are still working to close the remaining Africa transactions in Algeria, Ghana and South Africa, per the release.
Sale of Plains stock
Earlier this month, Occidental announced it would sell off its stake in Houston-based Plains All American Pipeline LP (NYSE: PAA) and its general partner in two public offerings expected to generate about $650 million in net proceeds for Occidental. Those sales have been completed.
Colombian oil company joint venture
In the release, Occidental also listed its joint venture with Colombia’s state-owned oil company, Ecopetrol, among its divestiture and deleveraging efforts. The JV will develop Occidental's acreage in the Midland Basin, a subsection of the Permian Basin.
The companies will split the joint venture 51-49, favoring Oxy, which will be the JV operator. Ecopetrol will pay Oxy $750 million in cash up front and fund $750 million of the first $1 billion of Occidental’s share of the development costs. Occidental will contribute 97,000 net acres in the Midland Basin.
The deal, which is expected to close in the fourth quarter, will allow Oxy to make an early move on its Midland Basin assets while acting as a gateway to the north for Ecopetrol’s fracking ambitions.
Occidental said in the Sept. 30 release that it remains on track to meet its goal of $10 billion to $15 billion of planned asset sales and "remains confident in its deleveraging strategy."
“We have made progress quickly on our post-acquisition divestiture and deleveraging goals and remain confident in our ability to realize the full value of the Anadarko acquisition for our shareholders,” Vicki Hollub, president and CEO of Occidental, said in the release. “Upon completion of our recent initiatives, we will have reached approximately $10 billion of our targeted divestitures with more to follow.”
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