Dec 11 Reuters Occidental Petroleum said on Monday it would buy energy producer CrownRock in a cashandstock deal valued at 12 billion, to boost its acreage in the oilrich Permian basin.

Houstonbased Occidental will finance the purchase with 9.1 billion of new debt, the issuance of about 1.7 billion of common equity and the assumption of CrownRock39;s 1.2 billion of existing debt.

The deal, expected to close in the first quarter of 2024, will immediately add to Occidental39;s free cash flow, it said.

The CrownRock deal will give Occidental more than 94,000 net acres in the Midland basin in Texas part of the Permian, the largest U.S. oilproducing area.

Shares of Occidental fell 1.2 in premarket trading.

Reuters first reported in September that CrownRock was preparing to explore a sale that could value it at well over 10 billion including debt.

Reporting by Sourasis Bose in Bengaluru; Editing by Savio D39;Souza and Devika Syamnath

Source Reuters