California Resources Boosts Production with $2.1 Billion Deal for Aera Energy
(Reuters) — U.S. oil and gas firm California Resources said on Wednesday it would buy Aera Energy in a deal valuing the California-based company at $2.1 billion, including debt, to gain more acreage in the most populous U.S. state.
The combined company will own interests in five of the largest oil fields in California with opportunities to increase oil recovery, California Resources said, adding that its 2024 production is estimated to average 150,000 barrels of oil equivalent per day.
Aera, currently owned by German asset manager IKAV and Canada Pension Plan Investment Board, was a joint venture between oil majors Exxon Mobil and Shell till 2022 when the companies sold the operation to IKAV for $4 billion.
California Resources said it would issue 21.2 million common shares to the equity owners of Aera.
The company said the deal, expected to close in the second half of 2024, will immediately add to some financial metrics this year and reflects a 45% improvement to operating cash flow per share.
California Resources' shares were up 2% before the opening bell.
Oil production in California has been on a steady decline for almost four decades. Crude output, including at its historic Kern County fields in southern California, is off by a third since the state's 1.1 million-barrel-per-day peak in 1985.
New drilling permits have steadily declined since Gavin Newsom became governor in 2019.
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