More Occidental Subsidiaries Offload Shares

More Occidental Subsidiaries Offload Shares
Occidental issued over 49 million common shares this week.
Image by FroYo_92 via iStock

After a CrownRock LP investor secured the resell of all common shares acquired by Occidental Petroleum Corp. when the latter took over the limited partnership, more Occidental affiliates sold a combined 19.5 million common shares this week.

The units sold by Anadarko USH1 Corp. and WGR Asset Holding Co. LLC represent limited partner interests in Western Midstream Partners LP, the issuer. Anadarko USH1, WGR Asset Holding and Western Midstream Partners are subsidiaries of oil, gas and chemicals producer Occidental, according to regulatory filings.

Barclays Capital Inc. bought the Anadarko USH1 and WGR Asset Holding shares as underwriter. The secondary offering consisted of 14,139,260 shares from WGR Asset Holding and 5,360,740 from Anadarko USH1, generating combined gross proceeds of over $697.1 million. Anadarko USH1 had originally offered 4,860,740 shares plus an additional sale of up to 2,850,000 shares. The brokerage firm partially exercised the option to buy additional shares, Occidental told the United States Securities and Exchange Commission (SEC).

The shares were priced $35.75 each. Warren Buffett-backed Occidental hovered above $56 at closing on the New York Stock Exchange over the last four days, ending Thursday at $57.81.

Western Midstream Partners does not receive any of the proceeds, the issuer said in a separate statement on its website.

Both the secondary offerings for Western Midstream Partners and CrownRock, which comprised over 49 million shares, were launched and closed simultaneously this week, according to SEC disclosures by Occidental.

The CrownRock shares that Occidental resold consisted of 29,560,619 shares from CrownRock Holdings LP. These shares represented 100 percent of the stock portion of Occidental’s cash-and-stock acquisition of Permian Basin competitor CrownRock LP. Occidental had agreed to the secondary offering as part of the conditions for the merger’s completion, according to a prospectus filing on Monday.

CrownRock LP was a joint venture between CrownQuest Operating LLC and Lime Rock Partners, before Occidental’s takeover. The general partner in CrownQuest and CrownRock Holdings is CrownRock Holdings GP LLC, according to filing information on the SEC. SEC filings by Occidental showed CrownRock Holdings and the general partnership limited liability company, led by Texas-based oil and gas baron Tim Dunn, as among the co-sellers of CrownRock LP.

JP Morgan Securities LLC, Morgan Stanley & Co. LLC and RBC Capital Markets LLC bought the CrownRock shares as underwriters.

On August 1, 2024, Occidental announced the finalization of its purchase of CrownRock at a higher-than-expected price of about $12.4 billion.

CrownRock LP expands Occidental’s Permian lease area by 94,000 acres, according to the announcement of the merger deal December 11, 2023. Occidental expects the assets to add an average of 170,000 barrels of oil equivalent a day to its 2024 production.

The transaction was valued around $12 billion when first announced. The final price increased around $4 million and comprised “approximately $9.4 billion in cash (inclusive of certain working capital and other customary purchase price adjustments), 29,560,619 shares of Common Stock, and the assumption of $1.2 billion of existing debt of CrownRock LP and its subsidiaries”, Occidental said in an SEC filing announcing the consummation of the merger.

To contact the author, email jov.onsat@rigzone.com


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