Occidental (NYSE: OXY) has moved into a purchase and sale agreement to sell its assets of Wyoming, Colorado, and Utah Land Grant to Orion Mine Finance (Orion) for the value of $1.33 billion. The deal transaction will close in the fourth quarter of 2020.
The sale of Wyoming and Utah Land Grant Assets include the around 4.5 million mineral acres and 1 million fee surface acres. Occidental will hold all existing cash flow attained from the operations of currently producing oil and gas properties on the position. The company has not included around 2.5 million mineral acres in the sale including its core DJ Basin position that it owns at the land grant in Colorado.
President and CEO Vicki Hollub said “This transaction significantly advances the progress against our $2 billion plus divestiture target for 2020.”
“We will retain our core oil and gas assets in the Rockies, including the prolific DJ Basin in Colorado and the highly prospective Powder River Basin in Wyoming.”
Following the acquisition deal, Orion will own the mineral rights of a world’s largest trona deposit. Trona is basically a mineral that makes soda ash which is principal ingredient in baking soda and it is also used in pollution control systems, global glass manufacturing, and other important chemical applications.
Orion Chief Investment Officer, Oskar Lewnowski said, “Acquiring high-quality producing royalties is a core component of our investment strategy and we are thrilled to be partnering with Occidental in this transaction. This transaction offers significant royalty cash flow from the trona mines and has strong potential for mineral development.”
He added, “As a firm we recognize the importance of US mineral and energy production and are pleased to be able to offer our support to the existing world-class operators and their associated communities.”
RBC Capital Markets, CBRE Group Inc., and Latham & Watkins, LLP played their role as assistant for Occidental in this acquisition while Citi and Shearman & Sterling LLP were assisted Orion in this deal.
Orion will bind the acquired properties under its own managed Sweetwater Royalties which works as a base metals and industrial minerals royalty company.