Occidental's Anadarko Acquisition to Expand Already-Heavy Permian Presence

Researched by Industrial Info Resources (Sugar Land, Texas)--Occidental Petroleum Corporation (NYSE:OXY) (Houston, Texas) is closing in on its anticipated acquisition of oil and gas producer Anadarko Petroleum Corporation (NYSE:APC) (The Woodlands, Texas). The deal will expand Occidental's geographic presence in the domestic drilling market with the addition of nearly 250,000 acres in the Permian Basin, and provide it with access to fields in Colorado and Wyoming. Industrial Info is tracking more than $3.6 billion worth of projects involving Occidental, the bulk of which is in the Oil & Gas Production Industry.

Click on the image at right for a graph detailing Occidental's U.S.-based projects, by industry sector.

After the deal is signed, Occidental will lay claim to about 1.64 million acres of drillable land. Anadarko's shareholders are set to vote later this week on the proposed, $38 billion sale to Occidental, which avoided its own shareholder vote by securing a necessary $10 billion in financing from Berkshire Hathaway Incorporated (NYSE:BRK.A) (Omaha, Nebraska) in April. Some investors, including the ever-influential Carl Icahn, have criticized the price tag as excessive.

Occidental already has a considerable presence in the Permian, with major projects proposed in each of the booming shale play's two states: a direct air capture plant in Midland, Texas, and a second-train addition at the Indian Basin NGL Plant in Carlsbad, New Mexico. The Midland plant would capture 500,000 metric tons per year of carbon dioxide (CO2) and re-purpose it to support enhanced oil recovery. The new unit in Carlsbad will boost the Indian Basin plant's processing capacity from 290 million to 340 million standard cubic of natural gas feet per day into natural gas liquids (NGL). For more information, see Industrial Info's reports on the Midland and Carlsbad projects.

"We are investing in technologies that will not only lower our cost of CO2 for enhanced oil recovery in our Permian conventional reservoirs, but will also bring forward the application of CO2 enhanced oil recovery to shales across the Permian, Denver-Julesburg and Powder River basins, and in our conventional reservoirs in our international locations," said Vicki Hollub, the chief executive officer of Occidental, in a recent earnings-related conference call.

Still, executives warned that heavy production from Permian in the past quarter likely will make the current quarter pale in comparison. "For the third quarter, we expect [the] Permian Resources [company segment's] growth to slow, compared to the substantial production increase realized in the second quarter," said Cedric Burgher, the chief financial officer of Occidental, in the conference call. "This change is related to execution efficiencies, accelerating our time to market in the second quarter, along with the timing of several significant section developments in the second half of 2019."

In northern Texas, Occidental is working with contractor Savanna Energy Services (Odessa, Texas), a subsidiary of Total S.A. (NYSE:TOT) (Paris, France), on a slew of drilling programs across the Panhandle and the Barnett Shale. In the Panhandle's Hockley County, active projects include the:

• Sundown Unit Oil and Gas Lease, including the drilling of three new wells; see project report
• Levelland Unit Oil and Gas Lease, with two to four new wells; see project report
• Slaughter Estate Oil and Gas Lease, with two new wells; see project report
• Central Mallet Unit Oil and Gas Lease, with two new wells; see project report

In Yoakum County, which straddles the Panhandle and West Texas regions, active projects include the:

• Yoakum Wasson Clearfork Unit Oil and Gas Lease, with 12 new wells; see project report
• Wasson OCD Unit Oil and Gas Lease, with 11 new wells; see project report
• Willard CO2 Separation Plant, which will add seven wells; see project report

In Kent County, about halfway between the cities of Lubbock and Abilene, active projects include the:

• Salt Creek Field Unit Oil and Gas Lease, with 11 new wells; see project report
• Salt Creek Cryogenic Natural Gas Processing Plant, which will add two wells; see project report

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.