Orrick has advised Chevron in the sale of its interest in the Elk Hills Field, one of the most productive fields in the United States, to California Resources Corporation (“CRC”).
California Resources Corporation (NYSE: CRC) has executed and closed a purchase and sale agreement with Chevron to acquire the remaining working, surface and mineral interests in the 47,000-acre Elk Hills field in the San Joaquin Basin of California. Consolidating sole ownership of the Elk Hills field, CRC paid cash consideration of $460 million and issued 2.85 million CRC common shares to Chevron, subject to customary post-closing adjustments. The effective date of the transaction was April 1, 2018.
The acquisition includes Chevron’s non-operated working interests ranging between 20% to 22% in different producing horizons within the Elk Hills field. In 2017, the acquired interests produced approximately 13,300 barrels of equivalent (BOE) per day with 46% oil and 9% natural gas liquids. CRC estimates that if it had owned 100% of the field last year, these interests would have added approximately 64 million BOE of proved reserves at year-end 2017, of which approximately 75% are considered proved developed. CRC estimates that these interests would have generated approximately $100 million of annual operating cash flow in 2017 assuming current prices.
Orrick has advised Chevron with a team including Billy Parish (Picture), David Ronn, Bob Lawrence, Emilio Grandio and Luisa Muskus.
Law Firms: Orrick;
Clients: Chevron Corporation;