By Jennifer Hiller and David French
HOUSTON (Reuters) – Occidental Petroleum Corp (NYSE:) is soliciting bids for oil and gas properties in Wyoming and Colorado that it acquired when it purchased Anadarko Petroleum (NYSE:), hoping the assets will fetch up to $700 million, according to people familiar with the matter.
Occidental offered about 200,000 acres in the Denver-Julesburg Basin of Wyoming and Colorado that produce $66 million a year in cash flow, mostly in mineral royalties, according to marketing documents.
RBC Capital Markets is handling the sale, with bids due next month.
Occidental separately has offered its own Midland, Texas, campus, according to a real estate listing https:// The facility was valued at $45.7 million last year, according to county tax records. The company declined to comment on the listing. Spokeswoman Melissa Schoeb said Occidental plans to move its Midland staff to offices Anadarko was building prior to the acquisition.
The two are among a string of smaller asset sales to further reduce the debt load of about $40 billion that Occidental took on with the Anadarko purchase. It has raised about $10 billion so far through sales of properties including a liquefied project in Mozambique and production in Africa.
Still, Occidental recently put on hold plans to divest its Western Midstream Partners pipeline unit after failing to attract an attractive offer. It also needs the cash the unit generates, analysts said.
“Small assets like non-O&G minerals via (Anadarko), longer dated Permian acreage, and real estate carve offs may help,” wrote analysts at Tudor Pickering Holt in a note on Monday. “But we believe additional color from management would go a long way in helping the market ascertain how the company plans to bring down absolute leverage in a meaningful way.”
The company has been slashing costs since the deal closed. Last week, it said it would cut 2020 capital spending by about 40%, reducing outlays in Colorado and Texas shale fields.
Occidental’s shares have slid more than 40% since its interest in the shale producer became public as investors turned against the high price and risk of the deal. It was $38.69 on Monday morning, down 3.5%.
The drilling acreage offered is mostly in Wyoming and includes minerals, properties Occidental operates itself and some land that is leased to other producers. People familiar with the offer valued the properties at between $500 million and $700 million.
Occidental is the largest private landowner in Wyoming, said Pete Obermueller, president of the Petroleum Association of Wyoming. It has around 400,000 acres in the state, where it is mainly focused on development in the Powder River Basin.
Disclaimer: Fusion Media
would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.
Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.