California Resources Corp. shares rose 13 percent following the news that the company acquired the remaining surface and mineral rights to California’s largest natural gas-producing oil field from Chevron Corp.
The Chatsworth oil and gas producer purchased the 47,000-acre Elk Hill Oil Field in exchange for $460 million and 2.85 million in its common shares.
Last year, the Kern County field produced around 48,000 barrels of oil equivalent (BOE) per day.
CRC has operated the field for more than 20 years in a partnership with Chevron.
“This acquisition is a natural fit that immediately accretes value to CRC, improving our cash flow and credit metrics,” Chief Executive Todd Stevens said in a statement. “With a surface area larger than Washington, D.C., the Elk Hills field is our flagship asset.”
The effective date of the transaction was April 1.
CRC announced the news on April 9, the next day CRC shares rose $2.41, or around 13 percent, on April 10 to close at $20.47 on the New York Stock Exchange.
Ethan Varian is a reporter with sister publication San Fernando Valley Business Journal, where a version of this article first appeared.