Occidental Petroleum buys Permian Basin acreage for $2 billion

Occidental Petroleum Corp bought land from private sellers and interests in enhanced oil recovery projects in the Permian. Reuters photo by Mario Anzuoni.

Occidental Petroleum looks for 700 new wells on land

Oct 31 (Reuters) – Occidental Petroleum Corp said on Monday it paid $2 billion cash for 35,000 acres (14,164 hectares) of West Texas acreage, boosting its position in the oil-rich Permian Basin.

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Occidental acquired the acreage in several transactions with private sellers and also bought interests in enhanced oil recovery (EOR) projects in the Permian. Occidental is already the largest Texas EOR producer, which uses carbon dioxide and other means to boost oil recovery.

“These transactions further complement and solidify Occidental’s dominant position in the Permian Basin,” Chief Executive Vicki Hollub said in a statement.

Shares of Houston-based Occidental fell 1 per cent to close Monday at $72.91. The stock was unchanged in after-hours trading.

Occidental bought the 35,000 acres in Reeves and Pecos counties, near where it currently operates. The land has an aggregate production of 7,000 barrels of oil equivalent per day from 68 wells.

Occidental believes there is potential for as many as 700 new wells on the land, with proves reserves of about 41 million barrels of oil equivalent.

(Reporting by Arunima Banerjee in Bengaluru and Ernest Scheyder in Houston; Editing by Savio D’Souza and Marguerita Choy)