The Barilla Draw assets produce around 24,000 barrels of oil equivalent per day (boepd). Credit: Corona Borealis Studio/Shutterstock.

Occidental Petroleum is reportedly in the final stages of discussions to divest its Barilla Draw assets in Texas to Permian Resources, reported Reuters.   

The potential deal could be worth approximately $1bn, sources familiar with the development told the news agency.  

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The two companies are working to finalise the deal, which may be announced in the coming weeks if negotiations proceed smoothly, the sources added.  

However, they cautioned that the deal is not yet guaranteed and that another bidder for the Permian Basin assets could emerge. 

Reuters‘ requests for comments from Occidental and Permian Resources went unanswered.  

This move comes as part of Occidental’s broader strategy to reduce its debt, which stood at more than $18bn at the end of the first quarter. 

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The Barilla Draw assets are expected to enhance Permian Resources’ production by around 24,000boepd and expand its Permian Basin holdings by approximately 27,500 net acres. 

Permian Resources, a company formed from the merger of Colgate Energy and Centennial Resources last year, has been actively consolidating its presence in the region.  

Acquiring Barilla Draw would mark its most significant purchase since the $4.5bn acquisition of Earthstone Energy.  

The oil sector has seen a surge in transactions, particularly in the US shale region, driven by high oil prices and the geopolitical impact of Russia’s invasion of Ukraine. 

Large oil companies are now expected to sell off billions in non-core assets after a spree of investments.  

Recently, Occidental also disclosed ongoing negotiations with Ecopetrol of Colombia for a 30% stake in CrownRock, estimating the deal’s value at around $3.6bn, subject to customary adjustments.