Business

Occidental and Anadarko finally seal the deal after a month-long bidding war

Occidental finally gets what it wants, looks to make maximum profit

Occidental finally signed the merger agreement with Anadarko after a month-long bidding war for the oil company.

Occidental has just acquired Anadarko after snatching the deal from Chevron, the deal is the biggest in scale since the Shell acquisition of the BG group.

Occidental is a sister company from Oxy and according to Oxy’s chief executive, Vicki Holub feels that this transition will establish Occidental as a premier operator in global oil and gas scene, and will bestow them with the ability to produce greater amounts of oil at greater rates.

They expect to increase production by 5% and they feel that the acquisition will also bring about investments in projects with industry-leading returns.

The most important takeaway from the deal for Occidental is the fact that they will soon grow to become the largest oil producer in the Permian once it has incorporated the acreage that it gets from Anadarko.

This comes to an approximate 600,000 acres gross in the Delaware Basin, it is part of the largest shale play.

This is the main reason that a company as large as Chevron was even interested in Anadarko, the acreage that the company had to offer in the Permian basin was simply too profitable to let it go.

But Chevron did drop out from the race to attain this, which left Occidental with these 600,000 acres that are rich in oil and also its assets that are outside the shale patch to Occidental.

Originally, Chevron offered to pay approximately $33 billion and assume $15 billion in debt, the offer stated that they would pay the price with 75% stock and 25% in cash which Anadarko had originally signed.

The real winner in this situation is Anadarko, who received more than they would have originally expected thanks to the bidding war which forced a desperate Occidental to overextend itself to make an off much too attractive for Anadarko to ignore.

Will Occidental be able to make up for the massive amount that they spent on the deal? Only time will tell.

About the author

Joseph Ellis

Joseph Ellis

Joseph is the youngest team member of Bulletinland, and he has been writing for various online publications as writing is in his blood. He loves to share quick updates from Technology and Business arena. Sometimes, he shares interesting General News bulletins as well.

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