Occidental Petroleum and Colombia’s Ecopetrol have announced a $1.5 billion joint venture to develop acreage in the Midland Basin.
The joint venture is comprised of 97,000 net acres of Occidental’s holdings. This is across Andrews, Ector, Glasscock, Howard, Martin, Midland, Reagan, and Upton counties.
The acreage includes 4,700 gross locations with rights to multiple benches. It includes the Middle and Lower Spraberry and the Wolfcamp A, B, and C.
Ecopetrol will pay $750 million in cash at closing. This is an expectation in the fourth quarter, and $750 million in capital during the joint development period. Ecopetrol put at the next five years during its presentation to investors.
Occidental will have 51 percent ownership percent of the joint venture and Ecopetrol 49 percent. The joint venture does not include Occidental’s existing wells. This is why Occidental will continue to operate the acreage. During the joint development period, Ecopetrol will pay 75 percent of Occidental’s share of capital expenditures. From there, Occidental will receive 51 percent of the joint venture’s production.
Vicki Hollub, president and chief executive officer, told investors the joint venture is an opportunity to develop its Midland Basin assets. This is during the Occidental’s second-quarter earnings call. Meanwhile, it is also focusing on its Delaware Basin assets.
Read the full article here
If you have further questions related to Occidental Petroleum and more, feel free to reach out to us here.