Occidental (NYSE:OXY) today announced it has signed an agreement to sell its onshore assets in Colombia to The Carlyle Group for total consideration of approximately $825 million, with $700 million up front and the remainder payable subject to certain production and commodity price targets.
The transaction, which is expected to close in the fourth quarter of 2020, includes operations and working interests in the Llanos Norte, Middle Magdalena and Putumayo Basins. Occidental will retain a presence in country with its exploration blocks offshore Colombia.
'Occidental has operated in Colombia, in partnership with Ecopetrol, for more than 40 years and is honored to remain a key partner in driving the country's energy evolution,' said President and CEO Vicki Hollub. 'We have expanded our strategic partnership with Ecopetrol to the onshore U.S. and to exploration blocks offshore Colombia. These highly prospective offshore blocks hold tremendous potential that could significantly bolster the country's energy resources.'
Occidental has announced over $2 billion of divestitures in 2020 that are expected to close by year-end and continues to advance additional asset sales.
Occidental is an international energy company with operations in the United States, Middle East, Africa and Latin America. We are one of the largest oil producers in the U.S., including a leading producer in the Permian and DJ Basins, and offshore Gulf of Mexico. Our midstream and marketing segment provides flow assurance and maximizes the value of our oil and gas. Our chemical subsidiary OxyChem manufactures the building blocks for life-enhancing products. Our Oxy Low Carbon Ventures subsidiary is advancing leading-edge technologies and business solutions that economically grow our business while reducing emissions. We are committed to using our global leadership in carbon dioxide management to advance a lower-carbon world.
Cautionary Statement Concerning Forward-Looking Statements
This press release contains forward-looking statements that involve risks and uncertainties that could materially affect liquidity, cash flows, expected results of operations and business prospects. Actual results may differ from anticipated results, sometimes materially, and reported results should not be considered an indication of future performance. Factors that could cause results to differ include, but are not limited to: the scope and duration of the COVID-19 pandemic and actions taken by governmental authorities and other third parties in response to the pandemic; Occidental's indebtedness and other payment obligations, including the need to generate sufficient cash flows to fund operations; Occidental's ability to consummate the transaction with The Carlyle Group, including obtaining any required regulatory approvals; Occidental's ability to successfully monetize select assets, repay or refinance its debt and the impact of changes in Occidental's credit ratings; assumptions about energy markets; global and local commodity and commodity-futures pricing fluctuations; supply and demand considerations for, and the prices of, Occidental's products and services; actions by the Organization of Petroleum Exporting Countries ('OPEC') and non-OPEC oil producing countries; results from operations and competitive conditions; future impairments of Occidental's proved and unproved oil and gas properties or equity investments, or write-downs of productive assets, causing charges to earnings; unexpected changes in costs; availability of capital resources, levels of capital expenditures and contractual obligations; the regulatory approval environment, including Occidental's ability to timely obtain or maintain permits or other governmental approvals, including those necessary for drilling and/or development projects; Occidental's ability to successfully complete, or any material delay of, field developments, expansion projects, capital expenditures, efficiency projects, acquisitions or dispositions; risks associated with acquisitions, mergers and joint ventures, such as difficulties integrating businesses, uncertainty associated with financial projections, projected synergies, restructuring, increased costs and adverse tax consequences; uncertainties and liabilities associated with acquired and divested properties and businesses; uncertainties about the estimated quantities of oil, natural gas and natural gas liquids reserves; lower-than-expected production from development projects or acquisitions; Occidental's ability to realize the anticipated benefits from prior or future streamlining actions to reduce fixed costs, simplify or improve processes and improve Occidental's competitiveness; exploration, drilling and other operational risks; disruptions to, capacity constraints in, or other limitations on the pipeline systems that deliver Occidental's oil and natural gas and other processing and transportation considerations; general economic conditions, including slowdowns, domestically or internationally, and volatility in the securities, capital or credit markets; uncertainty from the expected discontinuance of LIBOR and transition to any other interest rate benchmark; governmental actions and political conditions and events; legislative or regulatory changes, including changes relating to hydraulic fracturing or other oil and natural gas operations, retroactive royalty or production tax regimes, deepwater and onshore drilling and permitting regulations, and environmental regulation (including regulations related to climate change); environmental risks and liability under international, provincial, federal, regional, state, tribal, local and foreign environmental laws and regulations (including remedial actions); potential liability resulting from pending or future litigation; disruption or interruption of production or manufacturing or facility damage due to accidents, chemical releases, labor unrest, weather, natural disasters, cyber-attacks or insurgent activity; the creditworthiness and performance of Occidental's counterparties, including financial institutions, operating partners and other parties; failure of risk management; Occidental's ability to retain and hire key personnel; reorganization or restructuring of Occidental's operations; changes in state, federal or foreign tax rates and actions by third parties that are beyond Occidental's control.
Words such as 'estimate,' 'project,' 'predict,' 'will,' 'would,' 'should,' 'could,' 'may,' 'might,' 'anticipate,' 'plan,' 'intend,' 'believe,' 'expect,' 'aim,' 'goal,' 'target,' 'objective,' 'likely' or similar expressions that convey the prospective nature of events or outcomes generally indicate forward looking statements. You should not place undue reliance on these forward-looking statements, which speak only as of this press release. Unless legally required, we undertake no obligation to update, modify or withdraw any forward-looking statements, as a result of new information, future events or otherwise. Factors that could cause actual results to differ and that may affect Occidental's results of operations and financial position appear in Part I, Item 1A 'Risk Factors' of Occidental's Annual Report on Form 10-K for the year ended December 31, 2019, and in Occidental's other filings with the U.S. Securities and Exchange Commission.
Melissa E. Schoeb
Tel: (713) 366-5615