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ACQUISITIONS AND DIVESTITURES | 9 Months Ended
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Sep. 30, 2024
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract] |
ACQUISITIONS AND DIVESTITURES |
NOTE 5 - ACQUISITIONS AND DIVESTITURES
CROWNROCK ACQUISITION In December 2023, Occidental entered into an agreement to purchase CrownRock, L.P. for total consideration of $12.4 billion, consisting of $9.4 billion of cash consideration (inclusive of certain working capital and other customary purchase price adjustments), 29.6 million shares of common stock of Occidental, and the assumption of $1.2 billion of existing debt of CrownRock. The acquisition closed August 1, 2024, adding to Occidental's oil and gas portfolio in the Permian Basin. In connection with the CrownRock Acquisition, Occidental issued $5.0 billion of senior notes, a $2.0 billion 364-day term loan, and a $2.7 billion two-year term loan. The CrownRock Acquisition qualified as a business combination and was accounted for using the acquisition method of accounting. The following table summarizes the cash and common stock components of the purchase price:
in millions of dollars and shares (except per-share price) | Total
Cash portion of purchase price | $ | 9,100 |
Closing Adjustments |
Net Working Capital and Other Purchase Price Adjustments | 257 |
Pre-closing dividends declared by Occidental | $ | 13 |
Total Cash Purchase Price | $ | 9,370
Total shares of Occidental common stock issued | 29.6 |
Occidental common stock share price | $ | 59.38 |
Stock portion of purchase price | $ | 1,755
Total purchase price | $ | 11,125
The following table sets forth the preliminary allocation of the acquisition consideration. Certain data necessary to complete the purchase price allocation is not yet available, and includes, but is not limited to, final appraisals of assets acquired and liabilities assumed. Occidental will finalize the purchase price allocation during the 12-month period following the acquisition date, during which time the value of the assets and liabilities may be revised as appropriate.
in millions | August 1, 2024
Fair value of assets acquired: |
Cash and cash equivalents | $ | 589 |
Trade receivables, net | 198 |
Other current assets | 67 |
Property, plant and equipment, oil and gas | 11,838 |
Amount attributable to assets acquired | $ | 12,692
Fair value of liabilities acquired: |
Current maturities of long-term debt | $ | 868 |
Accounts payable | 251 |
Accrued liabilities | 23 |
Long-term debt | 378 |
Asset retirement obligations | 47 |
Amount attributable to liabilities acquired | $ | 1,567
Fair value of net assets acquired: | $ | 11,125
The aggregate purchase price noted above was allocated to the major categories of assets and liabilities acquired based upon their preliminary estimated fair values at the date of the acquisition. The valuation of certain assets, primarily property, was based on preliminary appraisals. Unproved oil and gas properties were valued primarily using a market approach based on comparable transactions for similar properties. Proved oil and gas properties were valued using an income approach, which are considered Level 3 fair value estimates and include significant assumptions of future production and timing of production, commodity price assumptions, and operating and capital cost estimates, discounted using an 8.5 percent weighted average cost of capital. Taxes were based on current statutory rates. Future production and timing of production is based on internal reserves estimates and internal economic models for specific proved oil and gas assets. Price assumptions were based on a combination of market information and published industry resources adjusted for historical differentials. Price assumptions ranged from approximately $75 per barrel of oil increasing to approximately $97 per barrel of oil for the 15-year period, with an unweighted arithmetic average price of $84.79 for WTI indexed assets for the same period. Natural gas prices ranged from approximately $2.80 per MCF to $5.10 per MCF for the 15-year period, with an unweighted arithmetic average price of $4.34 for NYMEX based assets for the same period. Both oil and natural gas commodity prices were held flat after 2038 and were adjusted for location and quality differentials. Operating and capital cost estimates were based on current observable costs and were further escalated 2 percent in every period. The weighted average cost of capital is calculated based on industry peers and best approximates the cost of capital an external market participant would expect to obtain. The following summarizes the unaudited pro forma condensed financial information of Occidental as if the CrownRock Acquisition had occurred on January 1, 2023:
| Three months ended September 30, |  | Nine months ended September 30,
millions, except per-share amounts | 2024 |  | 2023 |  | 2024 |  | 2023
Revenues | $ | 7,367 |  |  | $ | 7,801 |  |  | $ | 21,424 |  |  | $ | 22,912 |
Net income attributable to common stockholders | $ | 1,075 |  |  | $ | 1,300 |  |  | $ | 3,049 |  |  | $ | 3,139 |
Net income attributable to common stockholders per share—basic | $ | 1.14 |  |  | $ | 1.41 |  |  | $ | 3.28 |  |  | $ | 3.39 |
Net income attributable to common stockholders per share—diluted | $ | 1.09 |  |  | $ | 1.31 |  |  | $ | 3.08 |  |  | $ | 3.14 |
DIVESTITURES During the third quarter of 2024, Occidental sold non-core assets in the Powder River Basin with near to intermediate term lease expirations and certain Delaware Basin assets in Texas and New Mexico for combined net proceeds of $779 million, subject to customary purchase price adjustments. Occidental recognized a pre-tax loss of $479 million on the asset sales. In addition, Occidental sold 19.5 million of its limited partner units in WES for proceeds of $697 million resulting in a pre-tax gain of $489 million.

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- Definition Description of significant business acquisitions (or series of individually immaterial business combinations or asset acquisitions) planned, initiated, or completed during the period, including background, timing, and allocation of acquisition costs. Includes description of significant business or asset dispositions completed during the period, including background, timing and disclosures for discontinued operations, if applicable. Also includes description of other applicable transactions. This element may be used as a single block of text to encapsulate all disclosures (including data and tables) regarding business combinations, asset acquisitions, business or asset dispositions, including leverage buyout transactions and other transactions. + References No definition available. + Details
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