Occidental Petroleum announced on Monday it will acquire energy producer CrownRock in a deal valued at $12 billion, including debt.

Occidental said it will finance the purchase with $9.1 billion of new debt, the issuance of about $1.7 billion of common equity and the assumption of CrownRock’s $1.2 billion of existing debt. The deal is expected to close in the first quarter of 2024.

The cash-and-stock deal will boost Houston-based Occidental’s cash flow and will give it more than 94,000 net acres in the Midland Basin – part of the Permian – in Texas.

TickerSecurityLastChangeChange % OXYOCCIDENTAL PETROLEUM CORP.56.47+0.07+0.12%

The CrownRock deal would be Occidental's first major acquisition since its widely criticized and debt-laden purchase of rival Anadarko Petroleum in 2019. Occidental had about $18.60 billion in debt as of Sept. 30, according to a company filing.

Investors are pressing oil and gas producers to expand their inventories following Exxon Mobil's $60 billion deal for Pioneer Natural Resources and Chevron's $53 billion agreement for Hess in October.

TickerSecurityLastChangeChange % XOMEXXON MOBIL CORP.99.55+1.13+1.15%PXDPIONEER NATURAL RESOURCES CO.223.05+2.45+1.11%CVXCHEVRON CORP.144.31+1.89+1.33%

Occidental shares dipped slightly in premarket trading on the news.

Reuters contributed to this report.