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ACQUISITIONS, DIVESTITURES AND OTHER TRANSACTIONS | 12 Months Ended
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Dec. 31, 2024
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract] |
ACQUISITIONS, DIVESTITURES AND OTHER TRANSACTIONS |
NOTE 5 - ACQUISITIONS, DIVESTITURES AND OTHER TRANSACTIONS
CROWNROCK ACQUISITION In December 2023, Occidental entered into an agreement to purchase CrownRock 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 | 254 |
Pre-closing dividends declared by Occidental | 13
Total Cash Purchase Price | $ | 9,367
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 | $ | 11,122
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, including, but not limited to, final appraisals of PP&E. 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 | 39 |
Property, plant and equipment, oil and gas | 11,818 |
Amount attributable to assets acquired | $ | 12,644
Fair value of liabilities acquired: |
Current maturities of long-term debt | $ | 868 |
Accounts payable | 207 |
Accrued liabilities | 22 |
Long-term debt | 378 |
Asset retirement obligations | 47 |
Amount attributable to liabilities acquired | $ | 1,522 |
Fair value of net assets acquired: | $ | 11,122
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 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% weighted average cost of capital. Taxes were based on current statutory rates. Future production and timing of production were 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% in every period. The weighted average cost of capital was 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:
|  |  | Years ended
millions, except per-share amounts |  |  |  |  | 2024 |  | 2023
Revenues |  |  |  |  | $ | 28,184 |  |  | $ | 30,777 |
Net income attributable to common stockholders |  |  |  |  | $ | 2,713 |  |  | $ | 4,197 |
Net income attributable to common stockholders per share—basic |  |  |  |  | $ | 2.90 |  |  | $ | 4.54 |
Net income attributable to common stockholders per share—diluted |  |  |  |  | $ | 2.74 |  |  | $ | 4.21 |
2024 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 $769 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, see Note 4 - Investments and Related-Party Transactions. Subsequent to the balance sheet date Occidental announced approximately $1.2 billion of divestitures in the first quarter of 2025. 2023 In August 2023, Occidental entered into an agreement with Carbon Engineering Ltd., its equity method investee, to purchase the remaining 68% interest not already owned by Occidental or its affiliates for total cash consideration of approximately $1.1 billion, resulting in Carbon Engineering becoming a wholly owned subsidiary of Occidental. The transaction qualified as a business combination and was accounted for using the acquisition method of accounting. Because Occidental acquired control of Carbon Engineering in the 2023 purchase, Occidental remeasured its previously held 32% equity interest at its acquisition-date fair value and recognized the resulting gain of $283 million in accordance with GAAP. The purchase price was payable in three approximately equal annual payments, with the first payment made at closing. This transaction closed on November 3, 2023, and Occidental made the first payment of $349 million. The second payment of $318 million was made in the fourth quarter of 2024, and the last payment will be made in 2025. The purchase price was allocated to the major categories of assets and liabilities acquired based upon their estimated fair values at the date of acquisition. The valuation of intangible assets was based on inputs that are not observable in the market and thus represent Level 3 inputs. The fair value of intangible assets was derived using an income approach, with significant inputs being forecasted revenues and expenses, an anticipated growth rate, and an estimated discount rate. Occidental allocated the preliminary purchase price to the fair value of Carbon Engineering’s assets as follows:
millions | 2023
Fair value of assets acquired:
Cash and other current assets | $ | 154 |
Property, plant and equipment | 11 |
Intangible assets related to developed technology | 845 |
Goodwill | 668 |
Total fair value of assets acquired | $ | 1,678 |
Fair value of liabilities acquired:
Liabilities acquired | 110 |
Deferred tax liability | 190 |
Total liabilities assumed | $ | 300 |
Fair value of previously held interest | 371 |
Total acquisition consideration | $ | 1,007 |
Throughout 2023, Occidental entered into non-monetary exchange agreements, primarily in the Permian Basin. These exchanges were recorded as acquisitions and divestitures at a total combined fair value of $120 million. The difference in the assets' net book value was treated as a recovery of cost and normal retirement, which resulted in no gain or loss being recognized. In September 2023, Occidental sold 5.1 million limited partner units of WES for proceeds of approximately $128 million, resulting in a gain of $51 million, see Note 4 - Investments and Related-Party Transactions. In September 2023, Occidental sold certain non-core proved and unproved properties in the Permian Basin for $202 million and recorded a gain on sale of assets of $142 million. 2022 Throughout 2022, Occidental entered into non-monetary exchange agreements, primarily in the Permian Basin. These exchanges were recorded as acquisitions and divestitures at a total combined fair value of $340 million. In 2022, Occidental acquired additional interests in emerging low-carbon businesses to advance its net-zero pathway for a combined net purchase price of approximately $350 million. In the fourth quarter of 2022, Occidental acquired additional primarily producing assets in the Permian Basin for a combined net purchase price of approximately $400 million. In January 2022, Occidental sold certain non-strategic assets in the Permian Basin for net cash proceeds of approximately $190 million. The difference in the proved assets' net book value and adjusted purchase price was treated as a normal retirement, which resulted in no gain or loss being recognized. The difference in the unproved assets' net book value and adjusted purchase price resulted in a gain on sale of approximately $123 million. In September 2022, Occidental sold 10.0 million limited partner units of WES for proceeds of approximately $250 million, resulting in a gain of $62 million, see Note 4 - Investments and Related-Party Transactions. DISCONTINUED OPERATIONS As previously disclosed, on April 5, 2024, Andes and the Occidental entities named in the pending actions related to the Andes Arbitration executed a confidential final settlement in which the parties agreed to dismiss all pending legal actions. The settlement resulted in a gain of $182 million, net of taxes, in discontinued operations.

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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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