Occidental Petroleum (NYSE: OXY) has announced that it has entered into a deal to sell Wyoming, Colorado and Utah land grant assets to Orion Mine Finance for approximately $1.33 billion.
The transaction is expected to close in the fourth quarter of this year and has a footprint of approximately 4.5 million mineral acres and one million fee surface acres, according to Oxy. The company noted that it will retain all cash flow from currently producing oil and gas properties on the position.
Around 2.5 million mineral acres derived from the land grant in Colorado, including Oxy’s core DJ Basin position, is not included in the sale, the Houston headquartered business outlined. Under the deal, Orion is acquiring mineral rights to the world’s largest known trona deposit, Oxy highlighted. Trona is a mineral used to make soda ash, the principal ingredient in baking soda, global glass manufacturing, pollution control systems and other chemical applications.
“This transaction significantly advances the progress against our $2 billion plus divestiture target for 2020,” Oxy’s president and chief executive officer, Vicki Hollub, said in a company statement.
“We will retain our core oil and gas assets in the Rockies, including the prolific DJ Basin in Colorado and the highly prospective Powder River Basin in Wyoming,” Hollub added in the statement.
Oskar Lewnowski, the chief investment officer of Orion, said, “acquiring high-quality producing royalties is a core component of our investment strategy and we are thrilled to be partnering with Occidental in this transaction”.
“This transaction offers significant royalty cash flow from the trona mines and has strong potential for mineral development,” Lewnowski added.
“As a firm we recognize the importance of U.S. mineral and energy production and are pleased to be able to offer our support to the existing world-class operators and their associated communities,” the Orion representative continued.
Oxy is an international energy company with operations in the U.S., the Middle East, Africa and Latin America, according to its website, which states that the business is the largest onshore oil producer in the U.S. and a leading offshore producer in the Gulf of Mexico.
Earlier this month, the company announced a net loss attributable to common stockholders for the second quarter of 2020 of $8.4 billion, or $9.12 per diluted share, and an adjusted loss attributable to common stockholders of $1.6 billion, or $1.76 per diluted share.
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