Oxy and Ecopetrol form 97,000-acre Permian Basin development JV

HOUSTON - Occidental and Ecopetrol entered into definitive agreements to form a joint venture to develop 97,000 net acres of Occidental’s Midland Basin properties in the Permian Basin. Ecopetrol will pay $750 million in cash at closing and $750 million of carried capital in exchange for a 49% interest in the new venture. Occidental will own a 51% interest and operate the joint venture.

The joint venture allows Occidental to accelerate its development plans in the Midland Basin, where it currently has minimal activity. Occidental will retain production and cash flow from its existing operations in the Midland Basin.

This transaction is expected to close in the fourth quarter of 2019. During the carry period, Ecopetrol will pay 75% of Occidental’s share of capital expenditures.  “Our strategic partnership with Ecopetrol is a further example of our commitment to enhancing our value proposition,” said Oxy president and Chief Executive Officer Vicki Hollub of the deal.