Hess Corp. has inked a deal to sell its stakes in some oil-producing assets in West Texas and New Mexico for $600 million, the New York oil company said Monday.
The four so-called CO2 enhanced oil recovery assets in the Permian Basin, including active oil wells, a gas processing plant in Texas and a CO2 field in New Mexico, pumped an average 8,200 barrels of oil equivalent a day last year for Hess.
Houston’s Occidental Petroleum Corp. has agreed to buy the assets in a sale expected to close in August. The deal comes on the heels of Hess’s announcement it will join Exxon in assembling a massive deep-water project off the coast of Guyana.
Analysts at Wells Fargo said the sale could fund some 60 percent of Hess’s initial share of the first phase of development in the Liza field off Guyana. That share is about $955 million. The Permian Basin assets also make up only 3 percent of Hess’s total output, the analysts said.
Meanwhile, Occidental Petroleum said it struck a handful of transactions — including the one with Hess — that will effectively bring its output in the region up by 3,500 barrels of oil equivalent a day. But the deals, the driller said, will balance out in terms of sales and purchases, requiring “no net cash outlay.” While it’s buying the assets from Hess, it’s also selling off acreage in Andrews, Martin and Pecos counties.
“These transactions support our pathway to breakeven at $50 after dividend and production growth,” Occidental CEO Vicki Hollub said in a statement.
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