Occidental Sells $905MM Worth of Assets in DJ Basin

Elk Range Royalties has acquired a DJ Basin mineral and royalty position with about 250,000 net royalty acres from Occidental Petroleum Corp. for $905 million.

“The newly acquired assets are actively being developed by leading operators, including Chevron and Civitas, who collectively account for more than half the wells spud in 2024”, Dallas, Texas-based Elk Range said in an online statement. “The high-quality operator footprint enhances production visibility and long-term value creation. The acquisition includes an attractive mix of current production, near-term activity through DUCs and long-term growth through undeveloped upside”.

Elk Range chief executive Charlie Shufeldt commented, “We remain committed to expanding our portfolio with high-quality royalty assets in proven basins”.

“The DJ Basin presents some of the best operator economics in the US, and this acquisition positions us to capitalize on both near-term cash flow and long-term development potential”, Shufeldt added.

Elk Range, whose business is the acquisition of mineral and royalty stakes in United States basins, said it now has over 300,000 net royalty acres and stakes in more than 23,500 producing wells.

Concurrently Elk Range announced the launch last month of Elk Range Royalties III, a new platform formed with current partner NGP Energy Capital Management.

El Range said it has deployed over $1.2 billion in capital since its launch 2020.

Last month Occidental announced two agreements to divest several assets in the Permian Basin and the Rocky Mountains to undisclosed buyers for a combined price of $1.2 billion as part of its debt management plan.

The sale, expected to close this quarter, involves stakes not included in the Houston, Texas-based company’s near-term development plan, Occidental said February 18.

“The resulting proceeds will be applied to the company’s remaining 2025 debt maturities”, the hydrocarbon and chemical producer said.

Billionaire Warren Buffett-backed Occidental said it had achieved its near-term debt repayment goal of $4.5 billion in the fourth quarter of 2024.

Occidental launched a $4.5 billion-$6 billion divestiture program when it announced its merger with CrownRock LP late 2023. It announced the completion of its $12.4 billion purchase of CrownRock August 1, 2024.

“We were pleased to reach the near-term deleveraging milestone in the fourth quarter of 2024, within five months of closing the CrownRock acquisition, and seven months ahead of our goal”, commented president and chief executive Vicki Hollub.

“The transactions announced today continue to high-grade our portfolio and accelerate the progress toward achieving both our medium-term balance sheet deleveraging target and shareholder return pathway”.

The company said, “Occidental will continue to advance deleveraging via free cash flow and divestitures”.

It owed $1.14 billion in current maturities from long-term debt as of the end of 2024. Occidental accrued total current liabilities of $9.52 billion, according to annual results it filed with the Securities and Exchange Commission.

It ended the year with $2.13 billion in cash and cash equivalents, while its total current assets stood at $9.07 billion.

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