Occidental Petroleum expects the closing of its $12-billion deal to buy CrownRock to be delayed to the second half of 2024 as the Federal Trade Commission (FTC) has asked for additional information while it reviews the proposed transaction.
At the end of last year, Oxy said it would buy Permian oil and gas producer CrownRock for cash and stock in a deal valued at around $12 billion, including debt, with which it joined the wave of recent mergers and acquisitions in the U.S. oil industry.
The acquisition will boost Occidental’s premier Permian portfolio with the addition of around 170,000 barrels of oil equivalent per day (boed) of high-margin, lower-decline unconventional production in 2024, as well as approximately 1,700 undeveloped locations.
At the time of the announcement in early December, Oxy and CrownRock expected to close the deal in the first quarter of 2024, subject to customary closing conditions and the receipt of regulatory approvals.
However, the FTC sent last month requests to both companies asking them for additional information related to the acquisition, Occidental’s top executives said on the earnings call on Thursday.
“The FTC’s request for additional information will impact the timing of closing, which we expect to occur in the second half of the year,” Oxy’s Senior Vice President and CFO, Sunil Mathew, told analysts.
Responding to an analyst question about FTC’s fresh request for information, chief executive Vicki Hollub said,
“Well, some of our teams felt like they’d asked for everything. But I can tell you our teams are working diligently to work with the team at the FTC to get them all the answers that they need.”
“We’re progressing and hope to, as we said, be able to close in the second half of this year,” Hollub added at the call after Occidental Petroleum reported its strongest quarterly financial results in three years for the final three months of 2023, beating analyst expectations.
By Tsvetana Paraskova for Oilprice.com
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