Colgate Energy Acquires Occidental's Delaware Basin Assets
Colgate Energy Partners III LLC, a subsidiary of privately-held E&P company Colgate Energy LLC, has entered into a definitive agreement with NYSE-listed Occidental Petroleum Corp. to acquire approximately 25,000 net acres of Delaware basin assets in Texas, for a total consideration of approximately US$508 million, subject to customary closing adjustments.
The acquired acreage is located across Reeves and Ward counties in Texas, and contains 360 active producing wells. The assets add high-quality inventory directly adjacent to two of Colgate Energy’s most economic operating areas, with significant upside due to high NRIs resulting in enhanced returns. Current average daily production attributable to the acreage is approximately 10,000 barrels of oil equivalent per day (boe/d).
“This acquisition, along with the recently acquired Luxe assets, truly puts Colgate in a differentiated position. These two transactions complement each other perfectly, creating a scaled business with increased relevance in public markets, and ample liquidity to execute on our highly accretive development program. The equity contribution from the Luxe transaction has put us in a place where we can fund a cash acquisition of this size while remaining squarely within our debt parameters,” commented James Walter, Co-CEO of Colgate Energy.
Headquartered in Midland, Texas, Colgate Energy is engaged in the acquisition, exploration, and development of oil and natural gas assets in the Delaware basin of Texas and New Mexico.
The transaction is subject to customary closing conditions, and is expected to be completed in Q3-2021, with an effective date of April 1st, 2021.