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Oxy investing $2 billion in the Permian basin

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Occidental Petroleum has acquired producing and non-producing leasehold acreage in the Permian basin from private sellers, the company said Monday. In a separate transaction, the company has also acquired interests in several Permian basin EOR properties.

According to the Houston-based company, the leasehold acquisition includes approximately 35,000 net acres in Reeves and Pecos counties, Texas, in the Southern Delaware basin, in areas where Occidental operates or has working interests. The acreage yields about 7,000 boed of net production (72% oil) from 68 horizontal wells.

Meanwhile, Occidental also acquired working interests in producing oil and gas CO2 floods and related EOR infrastructure, increasing the company’s ownership in several properties where it is the operator or an existing working interest partner.

These properties have current production of approximately 4,000 boed (80% oil), with estimated net proved developed producing reserves of approximately 25 MMboe and total proved reserves of approximately 41 MMboe.

The total purchase price for these transactions is approximately $2 billion, which has been funded from existing cash on hand.

“These transactions further complement and solidify Occidental’s dominant position in the Permian basin,” said President and CEO Vicki Hollub. “They leverage our existing infrastructure, utilize our strong balance sheet and create additional operational synergies.”

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