Occidental to Buy Plains’ Assets in California, Texas

Occidental Petroleum Corp., the fourth-biggest U.S. oil company, agreed to buy California and Texas assets from Plains Exploration & Production Co. for $865 million, expecting to raise output from the properties.

The cash purchase includes interests in oil and natural-gas fields with production equal to 7,200 barrels of oil a day, Houston-based Plains said Monday in a statement. Occidental, based in Westwood, said it estimated proven reserves at about 56 million barrels of oil equivalent.

The sale includes interests in the Asphalto, Buena Vista and Mt. Poso fields in California’s San Joaquin Valley, the Sansinena Field in the Los Angeles Basin and the Pakenham Field in West Texas. Occidental said the principal properties in the deal were adjacent to sites where the company was already operating.

Occidental expects to “substantially increase” production from the properties by applying techniques it has used with other U.S. fields, Chief Executive Ray Irani said in the company’s statement. The producer uses such methods as pumping carbon dioxide into fields to extract more oil, including heavy crudes that are more difficult to refine than lighter grades.

Plains said the sale, expected to close by Sept. 30, completed a divestiture plan designed to reduce debt and raise cash for stock buybacks.