Occidental Acquires Permian Basin Acreage
Occidental Petroleum has acquired an interest in oil and gas production from ExxonMobil in the Permian Basin of West Texas for a purchase price of approximately $972 million. The production being acquired from ExxonMobil is primarily from the Salt Creek, Sharon Ridge and Dollarhide fields.
The closure of the ExxonMobil transaction, combined with another potential transaction (which is being negotiated to acquire additional Permian interests), together with two smaller Permian acquisitions concluded in the first quarter, are expected to result in total proved reserve additions to Occidental, net of asset sales, of at least 130 million barrels of oil equivalent. Occidental expects to sell certain of the acquired assets that do not fit its Permian portfolio.
These transactions, which are immediately accretive to earnings and will be financed from cash on hand, are expected to add approximately 26,000 net barrels of oil equivalent per day to Occidental's 2005 production exit rate.
"When combined with our first quarter 2005 production rate of 565,000 equivalent barrels per day," said Dr. Ray R. Irani, Chairman, President and Chief Executive Officer of Occidental Petroleum Corporation, "production from these acquisitions will put us well within reach of the exit rate of 600,000 equivalent barrels which we announced early this year. Moreover, these transactions further strengthen our industry leading position in the Permian Basin and are consistent with our strategy of focusing on large, long-lived assets in our core geographic areas."
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