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As Occidental Petroleum works toward closing a $12 billion expansion in the Permian Basin, the E&P is reportedly considering selling midstream interests to reduce debt.
Occidental is exploring a sale of Western Midstream Partners, a pipeline operator with a market valuation of nearly $20 billion, including debt, Reuters reported Feb. 20.
The U.S.-based oil giant plans to shore up its balance sheet after closing a $12 billion acquisition of private Permian producer CrownRock LP by monetizing $6 billion in non-core assets.
Analysts previously said that Occidental could look to sell off parts of its midstream portfolio. The company owns a total effective economic interest of 51% in Western Midstream Partners LP, including all of the 2.3% non-voting general partner interest and 48.8% of the limited partner units in WES, per regulatory filings.
“Examining [Occidental’s] assets, the stake in WES has often been discussed by the market as a potential divestiture candidate,” analysts at Jefferies reported in December when the CrownRock acquisition was announced.
WES shares were trading up over 5% ahead of markets closing on Feb. 20.
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