In a significant move aligned with its divestiture and debt reduction strategy, Occidental Petroleum (NYSE: OXY) announced earlier this year the sale of specific Delaware Basin assets in Texas and New Mexico to Permian Resources (NYSE: PR) for $818 million. This transaction is part of Occidental’s broader $4.5 billion-$6 billion divestiture program, designed to streamline its portfolio and support the financing of its CrownRock acquisition.
As part of this process, air permits for several facilities in the Texas Delaware Basin were recently transferred from Occidental to Permian Resources. These permits, issued by the Texas Commission on Environmental Quality (TCEQ), cover facilities in Reeves County, a focal point of oil and gas production in the region. The transfer reflects the operational handover of approximately 29,500 net acres of productive land.
Download the Facility Transfer Report
Details of the Permit Transfers
The recently transferred air permits highlight the operational scale of the assets sold. Facilities like Osprey 9 SWD, Weinert State 34 Battery, and others now fall under Permian Resources’ management. Previously held by Oxy USA WTP LP, these permits include change-of-ownership approvals, marking a regulatory milestone in the transaction.
The facilities, primarily located in Reeves County, Texas, are involved in upstream oil and gas production. The change in ownership is significant for Permian Resources, as it boosts their operational footprint and aligns with their strategic growth in the region. Permian Resources is taking over permits classified under “Permit by Rule” (PBR) regulations, ensuring continuity in compliance with TCEQ environmental standards.
Strategic Significance
This transaction underscores Occidental’s commitment to deleveraging its balance sheet. The $818 million in proceeds from the Permian Resources deal, combined with $152 million from additional dispositions in 2024, brings Occidental’s total year-to-date divestiture proceeds to $970 million. According to Occidental CEO Vicki Hollub, the divestiture strategy aims to “derisk the financing of the CrownRock acquisition and accelerate [Occidental’s] shareholder return pathway.”
The assets transferred include approximately 27,500 net acres in the Barilla Draw Field of the Texas Delaware Basin and 2,000 net acres in the New Mexico Delaware Basin, producing an estimated 15,000 barrels of oil equivalent per day (BOEPD). The operational capabilities and scale of these assets make them a natural fit for Permian Resources, an established player in the basin.
Environmental and Regulatory Considerations
Occidental’s adherence to regulatory protocols during the asset transfer demonstrates its commitment to responsible divestiture. By ensuring that all necessary permits were updated and transferred, Occidental and Permian Resources underscore their dedication to maintaining environmental compliance during operational transitions.
Looking Ahead
The divestiture represents a win-win scenario: Occidental progresses toward its debt reduction goals, while Permian Resources solidifies its position as a leading operator in the Delaware Basin. For stakeholders, these moves are a clear indicator of Occidental’s focus on strategic financial health and Permian Resources’ intent to scale operations responsibly.
As Occidental moves closer to completing its divestiture program following the CrownRock acquisition, industry observers will watch how the company balances asset sales with operational efficiencies to maximize shareholder returns.
This blog captures the operational, financial, and environmental dimensions of Occidental’s divestiture strategy and the air permit transfers involved. Let me know if you’d like any additional details or refinements!
