Occidental Petroleum: Possible Permian Sale Aims to Create Financial Flexibility

Reuters reports that no-moat-rated Occidental is contemplating a potential asset sale of $1 billion. As part of the deal, Occidental management would sell less than 30,000 net acres of leases located in the Permian's Barilla Draw. This acreage represents roughly 5% and less than 2% of Permian and total company production, respectively. The relative quality of the acreage and the moves made to consolidate or "block up" the position make it a good candidate for divestment. Occidental has made trades and acquisitions to enhance its position there over the last decade, even as recently as last year’s third quarter. In doing so, it has put together good-quality acreage in sufficient quantity to attract buyers.