In December 2023, Occidental agreed to acquire CrownRock. Credit: Poetra.RH/Shutterstock.

Colombia’s Ecopetrol is in negotiations with US oil producer Occidental to potentially acquire a 30% stake in shale oil producer CrownRock.  

Occidental has projected the value of the transaction at around $3.6bn, with customary adjustments to the purchase price expected. 

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“Occidental and Ecopetrol are engaged in discussions regarding a structure for Ecopetrol’s potential acquisition of an undivided thirty percent (30%) interest in the CrownRock assets,” Occidental said in a stock filing.  

Ecopetrol has confirmed its ongoing discussions with Occidental but has not revealed specifics regarding the potential deal’s size or value.  

The company said that any decisions on the stake purchase are subject to thorough analysis and due diligence. 

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Should the discussions not result in an agreement, Ecopetrol retains the option to direct the Rodeo Midland Basin joint venture (JV) to acquire CrownRock’s assets.  

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This would result in Ecopetrol indirectly owning a 49% interest in CrownRock’s assets. 

The JV between Occidental’s subsidiary, Occidental Midland Basin, and Ecopetrol was established in 2019 to develop and operate assets in the Midland Basin.  

Both parties have rights to participate in oil and gas interests acquired by the other within an area of mutual interest, under certain conditions. 

Occidental plans to allocate any proceeds from the potential sale to Ecopetrol towards reducing its term loan obligations.  

In December 2023, Occidental agreed to acquire CrownRock in a deal valued at $12bn, consisting of cash and stock.  

This acquisition is expected to enhance Occidental’s asset base and production capacity by adding around 1,700 undeveloped locations and 170,000 barrels of oil equivalent per day of output in 2024. 

CrownRock’s assets include more than 94,000 net acres of premium stacked pay assets and infrastructure, adjacent to Occidental’s existing operations in the Midland Basin.  

The acquisition of CrownRock is expected to be finalised by August 2024.