Occidental Petroleum Corp is soliciting bids for oil and gas properties in Wyoming and Colorado acquired when it purchased Anadarko Petroleum, hoping the assets will bring up to $700 million, people familiar with the matter told Reuters.
Occidental offered roughly 200,000 acres in the Denver-Julesburg Basin of Wyoming and Colorado that produce $66 million a year in cash flow, mostly in mineral royalties, according to marketing documents.
RBC Capital Markets is handling the sale, with bids due next month, Kallanish Energy learns.
Midland offices on the block
Occidental separately has offered its own Midland, Texas, offices, according to a real estate listing, Reuters reported. The facility was valued at $45.7 million last year, according to county tax records.
Spokeswoman Melissa Schoeb told Reuters Occidental plans to move its Midland staff to offices Anadarko was building prior to the acquisition. She declined to comment on the sale of Wyoming and Colorado assets.
The two offerings are among a string of smaller asset sales to further reduce the debt load of roughly $40 billion Occidental took on with the Anadarko purchase. It has raised about $10 billion so far through sales of properties, including a liquefied natural gas project in Mozambique and production in Africa.
Plans on hold to sell pipeline unit
Occidental recently put on hold plans to divest its pipeline unit after failing to attract a sufficient offer. It also needs the cash the unit generates, analysts said.
Selling minerals, smaller assets and real estate “may help,” analysts at Tudor Pickering Holt wrote in a note Monday. “But we believe additional color from management would go a long way in helping the market ascertain how the company plans to bring down absolute leverage in a meaningful way.”
Occidental risks its dividend without “meaningful and quick deleveraging,” said Jennifer Rowland, analyst with Edward Jones, Reuters reported
Cutting capital spending by 40%
Last week, it said it would cut 2020 capital spending by about 40%, reducing spending in Colorado and Texas.
Shares have slid more than 40% since its interest in Anadarko became public. It closed at $38.90 Monday, down 3%.
The drilling acreage offered is mostly in Wyoming and includes minerals, properties Occidental operates and some land leased to other producers. People familiar with the offer valued the properties at between $500 million and $700 million.
Occidental is the largest private landowner in Wyoming, Pete Obermueller, president of the Petroleum Association of Wyoming, told Reuters. It hold 1 million acres and is mainly focused on development in the Powder River Basin.
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