Tuesday, September 21, 2021
78.7 F
Fort Worth

Occidental seeking buyer for $3 billion Bakken oil business

🕐 2 min read

Bradley Olson and Matthew Monks (c) 2014, Bloomberg News.

HOUSTON — Occidental Petroleum, the U.S. oil producer that is restructuring to focus on its most profitable operations, is seeking to sell oil assets in North Dakota for as much as $3 billion, people with knowledge of the matter said.

Occidental is working with investment bank Tudor Pickering Holt & Co. to sell about 335,000 net drilling acres in the Williston Basin, said the people, who asked not to be identified because they were discussing private information. The holdings include a part of North Dakota’s Bakken formation, an area that has been less successful for Occidental because of higher costs, though it’s one of the fastest-growing oil-producing regions in the U.S.

A representative for Tudor Pickering Holt didn’t immediately respond to a request for comment. Melissa Schoeb, an Occidental spokeswoman, said the Houston-based company announced plans last year to “pursue strategic alternatives” for some assets, including in the Williston Basin.

Global energy producers are facing investor demands to cut spending and focus on their best drilling opportunities in the U.S., where oil output reached the highest level in almost 30 years. Companies including Apache Corp. have relied on asset sales and spinoffs to fund share buybacks and boost returns.

An index of companies that focus exclusively on finding and producing oil and natural gas has declined 14 percent since July as crude prices weakened, falling last week to the lowest level in nearly 18 months.

Occidental Chief Executive Officer Stephen Chazen has embraced a restructuring plan that includes selling part of Occidental’s Middle East business and spinning off the company’s California operations. Chazen told investors in July that he might accelerate plans to sell assets in what the company calls its “midcontinent” operations in the Piceance and Williston basins.

Occidental produced the equivalent of 92,000 barrels of oil and gas a day in its midcontinent business in the second quarter. Natural gas made up about 55 percent of that output, which at the end of 2013 came from states including Kansas, Oklahoma, Colorado, North Dakota and Texas.

The company plans to spin off its California operations next month. It’s also trying to sell a stake of as much as 40 percent of its operations in the Middle East and North Africa, a stake that could be worth as much as $8 billion.

Occidental has fallen 1 percent since 2011 as energy companies on the Standard & Poor’s 500 Index have risen 28 percent, according to data compiled by Bloomberg. Shares have declined more than 5 percent since the start of July.

Robert Francis
Robert is a Fort Worth native and longtime editor of the Fort Worth Business Press. He is a former president of the local Society of Professional Journalists and was a freelancer for a variety of newspapers, weeklies and magazines, including American Way, BrandWeek and InformatonWeek. A graduate of TCU, Robert has held a variety of writing and editing positions at publications such as the Grand Prairie Daily News and InfoWorld. He is also a musician and playwright.

Related Articles

Our Digital Sponsors

Latest Articles

Not ready to subscribe?

Try a few articles on us.

Enter your email address and we will give you access to three articles a month, to give us a try. You also get an opportunity to receive our newsletter with stories of the day.

Get our email updates

Stay up-to-date with the issues, companies and people that matter most to business in the Fort Worth.

  • Restaurants
  • Technology
  • and more!

FWBP Morning Brief

FWBP 5@5

Weekend Newsletter

  • Banking & Finance
  • Culture
  • Real Estate