It may be considerably smaller in scale than the recent ExxonMobil/Pioneer and Chevron/Hess megadeals, but Occidental Petroleum’s announcement that it will acquire privately held CrownRock LP for $12 billion is remarkable in its own right. Among other things, the deal will give Delaware Basin-focused Oxy a strong foothold in the absolute core of the Midland Basin, supercharge its free cash flow and — despite increasing Oxy’s debt in the short term — provide a pathway for the company to return much more money to shareholders via dividends and stock buybacks in the years ahead. In today’s RBN blog, we examine Oxy’s planned acquisition of CrownRock and what it means for the acquiring company and the Permian itself.
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Production-asset consolidation in the Permian has been a primary theme in a number of our blogs over the past couple of years, ExxonMobil’s planned $64.5 billion acquisition of Pioneer Natural Resources being the most recent — and most obvious — example. There are, of course, good reasons for the consolidation trend, most important the facts that (1) the Permian is far and away the U.S.’s most prolific megabasin, with vast reserves of crude oil, natural gas and NGLs only a stone’s throw from Gulf Coast refineries, fractionators, petrochemical plants and export terminals, and (2) much larger scale enables producers to drive down their production costs and increase their free cash flow generation, profitability, and desirability to investors.
Figure 1. Occidental’s and CrownRock’s Acreage in the Permian. Source: Oxy
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About the song
“Chasing the Crown” was written by Elton John and Bernie Taupin. It appears as the first song on side one of Elton John’s 14th studio album, 21 at 33. The song’s lyrics describe a person consumed by the desire for power, no matter the costs or consequences. Personnel on the record were: Elton John (vocals, piano), Steve Lukather (electric guitar), Reggie McBride (bass), Alvin Taylor (drums), Victor Feldman (tambourine), and Venette Gould, Stephanie Spruill, Carmen Twillie (backing vocals).
21 at 33 was recorded between September 1979 and March 1980 at Super Bear in Nice, France, and Sunset Sound and Rumbo in Los Angeles with Elton John and Clive Franks producing. The title comes from the facts that it was John’s 21st album and he was 33 when he recorded it. Released in May 1980, the album went to #13 on the Billboard 200 Albums chart and has been certified gold by the Recording Industry Association of America. Three singles were released from the LP.
Sir Elton John (Reginald Kenneth Dwight) is a British singer, songwriter, pianist, and record producer. His songwriting partnership with Bernie Taupin is one of the most successful in music history. The pair started writing songs for other artists in 1967. In 1969, John released his debut studio album, Empty Sky. He has released 31 studio albums, five live albums, 16 compilation albums, 10 soundtrack albums, four EPs and 140 singles and has sold over 300 million records worldwide. John was knighted by Queen Elizabeth II in 1998 and has received a Kennedy Center Honor and the National Humanities Medal. He was inducted into the Songwriters Hall of Fame in 1992 and the Rock and Roll Hall of Fame in 1994. He retired from touring in 2023 but continues to record.
