Occidental Petroleum says Colombia’s Ecopetrol will not buy CrownRock stake
5:14 pm Thursday, August 01st, 2024
(Reuters) -Occidental Petroleum said on Thursday that Colombia’s Ecopetrol will not buy a stake in shale oil producer CrownRock after the U.S. company said last month they were in talks for a potential stake sale.
Last year, Occidental agreed to buy the closely held, Texas-based company, CrownRock, in a $12 billion cash-and-stock deal that closed on Thursday.
State-owned Ecopetrol was in talks to possibly buy a 30% stake in CrownRock, in a transaction potentially worth $3.6 billion, Occidental said last month in a regulatory filing.
If a deal on the transaction is not reached, “Ecopetrol will have an option to elect for the Rodeo Midland Basin Joint Venture to acquire the CrownRock assets,” according to the filing.
The CrownRock deal is adding more debt onto Occidental’s balance sheet and the proceeds from Ecopetrol were expected to help quickly lower the debt.
Occidental, which had $18 billion in debt at the end of the first quarter, had reaffirmed in May that it plans to sell about $4.5 billion to $6 billion of assets within 18 months of closing the CrownRock purchase.
Occidental’s shares were marginally down in after-market trade.
(Reporting by Seher Dareen and Vallari Srivastava in Bengaluru; Editing by Sonia Cheema and Shounak Dasgupta)
