Occidental to Acquire CrownRock for $12 Billion in Latest of North American Consolidation Deals

Occidental Petroleum announced the acquisition of CrownRock for a total value of $12 billion, the latest in a recent slew of combinations as North American producers seek to consolidate operations in pursuit of capital efficiency. The deal will add significant capacity in the Midland Basin that is expected to expand 2024 production by 170 thousand barrels of oil equivalent per day. The deal close is scheduled for the first quarter of 2024, and we don’t foresee any material roadblocks to the transaction proceeding as scheduled. We’ll incorporate the full anticipated deal impact shortly, but after this first look, we maintain our $61 fair value estimate and no-moat rating.