How much did Occidental pay for CrownRock, and how was it structured?

Total consideration was about $12.4 billion: roughly $9.4 billion in cash (including working capital and other adjustments), about 29.6 million shares of OXY common stock (valued at about $1.8 billion using the $59.38 August 1, 2024 share price), and the assumption of about $1.2 billion of CrownRock's existing debt. The preliminary purchase price used in the pro forma statements is about $11.1 billion, reflecting the stock at the closing price and the cash consideration.

How was the acquisition financed, and what does it mean for OXY's leverage?

OXY incurred about $9.7 billion of new debt: $2.0 billion of 364-day term loans, $2.7 billion of two-year term loans, and $5.0 billion of senior unsecured notes, at a weighted average rate of about 6.22%. Net of $54 million of issuance costs, this yielded about $9.6 billion of cash. Pro forma long-term debt rises to about $26.4 billion, with current maturities of about $3.3 billion, which will raise interest expense and make debt reduction a near-term priority.

What were CrownRock's standalone financial results?

For the six months ended June 30, 2024, CrownRock reported total revenues of $1.26 billion, operating income of $650 million, and net income of $616 million. Operating cash flow was $979 million, capital expenditures on oil and gas properties were $479 million, and it made $198 million of tax distributions to its partner. Net income benefited from relatively low interest expense ($39 million) given its modest debt load.

Does the pro forma information include expected synergies?

No. The pro forma statements exclude cost savings from operating efficiencies, revenue synergies, and integration costs. They also exclude about $48 million of estimated acquisition-related transaction costs as non-recurring. The pro forma figures are illustrative, reflect preliminary fair value estimates, and are not a projection of future results.

Why do the purchase accounting figures matter, and are they final?

The purchase price allocation is preliminary. OXY is still completing valuation studies and reviewing CrownRock's accounting policies, so fair value adjustments to PP&E (about $11.9 billion of net PP&E in the pro forma) and debt could change. The adjustments also affect future depletion, depreciation and amortization, with pro forma DD&A of about $110 million for the first half of 2024 and $189 million for 2023. Investors should expect these numbers to be refined in future filings.

OXY/OXY-WT 8-K SEC Disclosure

01—Abstract

Summary

Summary of the 8-K filed August 12, 2024. Cited figures are marked; the original filing is the authoritative source.

On August 1, 2024, Occidental Petroleum (OXY) closed its acquisition of 100% of the partner interests in CrownRock, L.P., a privately held Permian Basin producer, for total consideration of roughly $12.4 billion^a.

That consisted of about $9.4 billion^b in cash (including working capital adjustments), about 29.6 million shares of OXY common stock, and the assumption of roughly $1.2 billion of CrownRock debt. This 8-K supplements the July 19, 2024 filing by adding CrownRock's unaudited financial statements for the six months ended June 30, 2024, along with updated pro forma combined financials through June 30, 2024. For investors, the key point is the scale of the deal relative to OXY and the leverage it brought.

OXY issued about $9.7 billion^c of new debt (including $5.0 billion of senior notes at a weighted average rate of about 6.22% for the new debt package and $4.7 billion of term loans), and it plans to redeem about $868 million of CrownRock's 2025 senior notes. CrownRock's standalone results for the first half of 2024 show $1.26 billion in revenue, $616 million in net income, $979 million in operating cash flow, and $479 million in capital expenditures, with total debt of $1.24 billion. Pro forma, OXY's total debt rises sharply, and the combined company's first-half 2024 pro forma diluted EPS is shown at $1.72 versus $1.59 historically, although these figures exclude expected synergies and integration costs.

The filing is largely financial disclosure rather than new strategic information, but it clarifies the acquisition's financial footprint. The pro forma purchase price allocation is explicitly preliminary, with no goodwill recognized, and fair value adjustments, final valuation, and accounting policy conformity remain open. Investors should expect the purchase accounting to be refined in later filings, and watch the pace of deleveraging, the realization of cost synergies, and how CrownRock's reserves and Permian production contribute to OXY's upstream growth.

02—Key points

Key Highlights

Acquisition closed August 1, 2024: OXY acquired 100% of CrownRock, L.P. for about $12.4 billion total consideration, including about $9.4 billion cash, 29.6 million OXY shares (about $1.8 billion at $59.38), and about $1.2 billion of assumed debt.
CrownRock first-half 2024 financials: total revenue of $1.26 billion, operating income of $650 million, net income of $616 million, and operating cash flow of $979 million.
Balance sheet: CrownRock had $431 million of cash, $4.0 billion of net oil and gas properties, and $1.24 billion of long-term debt (2025 and 2029 senior notes) at June 30, 2024.
Financing: OXY issued about $9.7 billion of new debt, including $5.0 billion of senior unsecured notes (weighted average rate about 6.22% across the package) and $4.7 billion of term loans, and plans to redeem about $868 million of CrownRock's 2025 notes.
Pro forma impact: combined pro forma total debt rises to roughly $29.8 billion, with pro forma first-half 2024 diluted EPS of $1.72 versus $1.59 historical, excluding synergies and integration costs.
Preliminary purchase price allocation: about $11.1 billion of net assets acquired, including $11.9 billion of PP&E, with no goodwill recognized; valuation and accounting policy conformity remain preliminary.
Reserves context: CrownRock's year-end 2023 proved reserves were about 666 MMBOE (roughly 272 MMbbl oil), largely in the Permian Basin, adding to OXY's domestic reserve base.

03—Questions

Frequently Asked Questions

How much did Occidental pay for CrownRock, and how was it structured?
Total consideration was about $12.4 billion: roughly $9.4 billion in cash (including working capital and other adjustments), about 29.6 million shares of OXY common stock (valued at about $1.8 billion using the $59.38 August 1, 2024 share price), and the assumption of about $1.2 billion of CrownRock's existing debt. The preliminary purchase price used in the pro forma statements is about $11.1 billion, reflecting the stock at the closing price and the cash consideration.
How was the acquisition financed, and what does it mean for OXY's leverage?
OXY incurred about $9.7 billion of new debt: $2.0 billion of 364-day term loans, $2.7 billion of two-year term loans, and $5.0 billion of senior unsecured notes, at a weighted average rate of about 6.22%. Net of $54 million of issuance costs, this yielded about $9.6 billion of cash. Pro forma long-term debt rises to about $26.4 billion, with current maturities of about $3.3 billion, which will raise interest expense and make debt reduction a near-term priority.
What were CrownRock's standalone financial results?
For the six months ended June 30, 2024, CrownRock reported total revenues of $1.26 billion, operating income of $650 million, and net income of $616 million. Operating cash flow was $979 million, capital expenditures on oil and gas properties were $479 million, and it made $198 million of tax distributions to its partner. Net income benefited from relatively low interest expense ($39 million) given its modest debt load.
Does the pro forma information include expected synergies?
No. The pro forma statements exclude cost savings from operating efficiencies, revenue synergies, and integration costs. They also exclude about $48 million of estimated acquisition-related transaction costs as non-recurring. The pro forma figures are illustrative, reflect preliminary fair value estimates, and are not a projection of future results.
Why do the purchase accounting figures matter, and are they final?
The purchase price allocation is preliminary. OXY is still completing valuation studies and reviewing CrownRock's accounting policies, so fair value adjustments to PP&E (about $11.9 billion of net PP&E in the pro forma) and debt could change. The adjustments also affect future depletion, depreciation and amortization, with pro forma DD&A of about $110 million for the first half of 2024 and $189 million for 2023. Investors should expect these numbers to be refined in future filings.

04—Continue

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