Carlyle Acquires Occidental’s Onshore Assets in Colombia
Private equity firm The Carlyle Group LP has entered into an agreement with Occidental Petroleum Corp. to acquire all of its onshore Colombian assets, for a total consideration of up to ~US$825 million. Occidental will retain its offshore exploration blocks in the country.
Under the terms of the agreement, Carlyle will acquire the assets for an upfront cash consideration of approximately US$700 million. Additionally, contingent payments of up to US$125 million will be payable subject to certain production and commodity price targets being met.
The assets acquired include Occidental’s interests in the La Cira-Infantas field in the Middle Magdalena Valley basin and the Teca-Cocorná field in the Putamayo basin, as well as operations in the Caño Limón and Chipirón fields in the Llanos Norte basin. Occidental holds interests ranging from 39% to 61% in the fields, with certain interests expiring between 2023 and 2038, while others extending through the economic limit of the areas.
“Occidental has operated in Colombia in partnership with national oil company Ecopetrol SA for over 40 years, and its net share of production from Colombia was 33 thousand barrels of oil equivalent per day (Mboe/d) in 2019. We have expanded our strategic partnership with Ecopetrol to the onshore U.S. and to exploration blocks offshore Colombia. These highly prospective offshore blocks hold tremendous potential that could significantly bolster the country’s energy resources,” said Occidental’s President & CEO, Vicki Hollub.
Occidental has announced over US$2 billion worth of divestitures in 2020, including the sale of certain Wyoming, Colorado, and Utah Land Grant assets for a total consideration of US$1.33 billion. Last year, the company agreed to acquire Anadarko Petroleum Corp. in a corporate transaction valued at ~US$55.0 billion, including the assumption of Anadarko’s outstanding debt. The subsequent crash in oil prices has left the company vulnerable to the heavy financing burden taken on to fund the acquisition, and Occidental has been under intense pressure from its investors and lenders to sell assets to pay down its debt.
Washington D.C.-based Carlyle is a major international private equity, asset management, and financial services group, with over US$222 billion of assets under management.
The transaction is subject to customary closing conditions, and is expected to close in Q4-2020.