Wyoming has withdrawn its $1.2 billion bid for land and minerals owned by Occidental Petroleum after it entered into a purchase and sale agreement with another entity.
Occidental announced it entered into the agreement with Orion Mine Finance to divest some of its Land Grant assets in Colorado, Utah, and primarily, Wyoming. It includes 4.5 million mineral acres and one million fee surface acres.
With an asking price of approximately $1.33 billion, the deal is expected to close by the end of the year.
Occidental expects the deal to help with its current financial situation.
"This transaction significantly advances the progress against our $2 billion plus divestiture target for 2020," said President and CEO Vicki Hollub. "We will retain our core oil and gas assets in the Rockies, including the prolific DJ Basin in Colorado and the highly prospective Powder River Basin in Wyoming."
The state first announced it was considering purchasing the land back in February. Officials made a bid for the assets last month. On August 11, the Governor's Office announced Occidental had moved on to focus on one buyer.
Initially, Wyoming said its bid was just on hold until that sale agreement was finalized. Now, Gov. Mark Gordon said in a press release the state is officially out.
"I am disappointed that Wyoming was not the ultimate buyer of the Union Pacific Land Grant lands and minerals. We worked hard to prepare a responsible, good faith bid, which we believe would have augmented Wyoming's investment returns, bringing in more revenue to keep taxes in Wyoming low. Had Wyoming's bid been accepted, the rate of return was expected to be in the range of 8% to 12%, depending on the assets and how quickly the economy recovers. This predicted rate of return is currently better than our current average rate of return."
The press release went on to say that the purchase of the checkerboard lands could have allowed better public access for recreation, hunting, and helped ensure multiple use on the state's lands.
On August 11, the state declined to make the value of its bid public until Occidental's deal became final or Wyoming chose to withdraw its bid. The state's press release did not include the value of its bid.
Orion Mine Finance is a subset of Orion Resource Partners. In its press release, Orion Resource Partners describes itself as a global alternative investment management firm that specializes in institutional metals and mining investments strategies. Orion Mine Finance says on its website that it focuses on later-stage investments.
"This transaction offers significant royalty cash flow from the trona mines and has strong potential for mineral development." Oskar Lewnowski, Chief Investment Officer at Orion Mine Finance, said, "as a firm, we recognize the importance of US mineral and energy production and are pleased to be able to offer our support to the existing world-class operators and their associated communities."
The acquired properties will be held under Sweetwater Royalties, a new base metals and industrial minerals royalty company, managed by Orion.
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