Occidental Petroleum Corporation announced the signing of a definitive purchase and sale agreement with Plains Exploration & Production Company to purchase all of PXP's interests in the Permian Basin of West Texas and New Mexico and Piceance Basin of Colorado for $1.25 billion.
Current production (net to Occidental) from the properties being acquired is approximately 4,300 barrels of liquids and 52 million cubic feet of gas per day; for a total of 13,000 barrels of oil equivalent per day. The properties have approximately 92 million barrels of oil equivalent of proved reserves (net to Occidental); of which approximately 69 percent are natural gas and 45 percent are developed.
In the Piceance basin in the first half of 2008, Occidental produced in excess of 50 million cubic feet a day. Occidental expects this to grow to at least 200 million cubic feet a day in 2010, including this acquisition. Occidental's net acreage position in the Piceance Basin now totals 129,000 acres.
In a transaction that was announced last year, Occidental acquired a 50-percent interest in these properties, and is purchasing the remainder in this transaction. Closing of this transaction is expected in the fourth quarter and is subject to government approvals.
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