HOUSTON, Nov. 1 (UPI) -- The world's largest independent oil explorer, Occidental Petroleum, said it was wading more deeply into one of the more lucrative Texas shale basins.
From private sellers, the company said it paid about $2 billion to acquire about 35,000 acres in the Permian shale basin, where it expects to pull at least 7,000 barrels of oil equivalent per day. About 70 percent will be in the form of oil coming from 68 wells.
"These transactions further complement and solidify Occidental's dominant position in the Permian Basin," President and CEO Vicki Hollub said in a statement.
The company said it paid for the acreage with cash on hand and the assets in question are close to existing Occidental infrastructure. All told, the company said it now holds about 59,000 net acres in the Permian basin.
Some of the properties added to the company's portfolio could contain as much as 41 million barrels of oil equivalent.
During first quarter 2015, the company, known by its ticker symbol Oxy, boasted that first quarter production was up 13 percent year-on-year in part because of output from the Permian shale in Texas. In its second quarter earnings report for this year, the company said part of its strategy was to reduce exposure in non-core assets in the United States.
Declining oil prices through mid-2016 left some activity in U.S. shale basins idled as some of the costs associated with production became prohibitive.
Texas Railroad Commissioner Christi Craddick, whose agency is charge of energy in the state, said the Permian shale basin showed strong signs of strength even as pressure in the broader sector remains. Its potential production, he said, "is truly invaluable."
So far over the past 12 months, Texas has produced about 1 billion barrels of crude oil.