Occidental Petroleum buys US natural gas assets for $3.2 billion

Occidental Petroleum Corp, the fourth-largest US oil and gas company yesterday said that it is buying crude and natural gas assets in North Dakota and SouthTexas, for $3.2 billion.

The Los Angeles, California-based Occidental announced a separate deal to sell its Argentinean subsidiary Occidental Argentina, to China's top oil refiner China Petroleum and Chemical Corp's (Sinopec), for $2.45 billion. (See: Sinopec to acquire Occidental Petroleum's Argentinean subsidiary for $2.45-bn)

Occidental is buying a group of gas fields in South Texas from Royal Dutch Shell for approximately $1.8 billion.

The fields include all Shell's gas-producing properties and related assets in South Texas, where Shell first drilled wells in 1953. They are predominately mature gas fields that currently produce some 200 million cubic feet of gas per day from more than 550 wells.

The sale is part of Shell's earlier announced plan of divesting $7-8 billion in assets worldwide in 2010 and 2011 as part of its restructuring programme.

Occidental is spending $1.4 billion in buying 180,000 net acres in North Dakota from a private seller. The assets located in the Bakken formation and Three Forks areas currently produce approximately 5,500 barrels of oil equivalent per day (boepd), and Occidental's net risked reserve exposure is in excess of 250 million barrels of oil equivalent.