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Warren Buffett-backed group beats rivals in race for sought-after private oil producer

Occidental Petroleum has agreed to acquire CrownRock, one of the most sought-after US private shale oil producers, in a deal valued at about $12bn, including debt.

The Houston-based company backed by Warren Buffett beat competition from rival bidders that had also tried to snap up CrownRock’s shale assets.

The deal is the latest in a series of transactions in the oil and gas sector as large energy companies seek to capitalise on their strong balance sheets and equity value to buy smaller rival assets.

This year, ExxonMobil announced a $60bn deal to buy shale driller Pioneer Natural Resources, a move that was followed swiftly by Chevron taking over Hess for $53bn.

Occidental’s most recent major transaction was criticised for being poorly timed after it took on huge debt to buy Anadarko Petroleum for $57bn in 2019, just before the Covid-19 pandemic caused oil prices to plunge to near zero.

But a rebound in oil prices has enabled Oxy to pay down debt and driven a surge in its share price, which helped the company’s chief executive, Vicki Hollub, fend off an activist investor attack from Carl Icahn.

A successful takeover of CrownRock would cement Oxy’s position as the second largest player in the prolific Permian Basin in the US south-west, where it produced 968,000 barrels of oil equivalent a day in August, according to consultancy Rystad Energy. Exxon’s deal with Pioneer, the Permian’s top producer, will put the combined group in the top spot.

“We believe the acquisition of CrownRock’s assets adds to the strongest and most differentiated portfolio that Occidental has ever had,” Hollub said on Monday.

“We found CrownRock to be a strategic fit, giving us the opportunity to build scale in the Midland Basin and positioning us to drive value creation for our shareholders with immediate free cash flow accretion.”

In its first year, the deal is expected to generate $1bn in free cash flow — based on the benchmark US oil price remaining at $70 a barrel — plus about 170,000 barrels of oil equivalent per day.

Occidental’s stock price has risen almost 500 per cent since hitting a 20-year low during the oil market upheaval of 2020.

CrownRock is one of the leading private operators in the sprawling Permian Basin of Texas and New Mexico, America’s most prolific oilfield. It is led by Tim Dunn, a prominent conservative political donor, and backed by the private equity group Lime Rock Partners.

Alongside rivals Endeavor Energy Resources and Mewbourne Oil, CrownRock has long been viewed as a prime target for bigger groups looking to scale up their operations in the oilfield.

Like those peers, CrownRock has significantly increased production since 2019. Its private status has left it free to put rigs in the field, while Wall Street has demanded a more cautious approach from publicly listed groups.

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PARIS — If you weren’t among those able to attend Saint Laurent‘s spring 2024 fashion show last September — an open-air spectacle at the foot of the Eiffel Tower — you can now commune with the colorful marbles used for its impressive set.

The stone has been repurposed as hulking shelves, tables, storage fixtures and floors in Saint Laurent’s newest and largest flagship in the world, which opened to the public on Saturday at 123 Avenue des Champs-Élysées.

The store debuts a new design concept by Saint Laurent creative director Anthony Vaccarello, whose penchant for superb materials and strong design statements on the runway are echoed in the boutique’s intriguing blend of Brutalist and modernist codes. Its ample volumes, luxurious fixtures and raw elements contribute to an atmosphere reminiscent of a futuristic boutique hotel rather than a typical fashion store.

Its arrival adds another glittering luxury attraction to the famous thoroughfare — a monumental neon sculpture by Cerith Wyn Evans set in the double-height foyer sure to incite curiosity — and signals Saint Laurent’s bold retail ambitions.

The unit also exemplifies Saint Laurent’s focus on cultivating local clients, and exalts the fruit of its brand elevation strategy.

“Having a flagship on the Avenue des Champs-Élysées is a strong statement for any brand. It is a truly iconic location,” Francesca Bellettini, president and chief executive officer of Saint Laurent, told WWD in an exclusive interview. “The clients you have here are unique, and our intention is to offer them the ultimate experience of Saint Laurent. We are projecting what the brand stands for — both physically in the space itself and in the service and client experience.”

Customers alight upon the kind of grand foyer you might expect in a concert hall by a cutting-edge architect: the neon sculpture dominating the right flank, and a coiling staircase in dark, polished wood on the left inviting exploration.

The boutique unfurls over four levels, the penultimate being a large VIP suite with a giant circular mirror, and there are surprising elements throughout, including skylights, views into a courtyard with a tropical-tinged garden, imposing metal furniture by American artist Donald Judd, and warmer, wooden seating by Rudolph Schindler.

The mind boggles how the thick marble shelves were affixed to the walls, and how the luminous panels diffuse such an even, insistent light.

Vaccarello said “modernist architecture and contemporary art” inspired the store concept, meant to impart “sophistication, modernity and timelessness.”

“This design embodies the heritage of the house, reflecting its elegant and luxurious aesthetic while integrating the modern elements which are my own contributions in the space,” he said in an interview.

Since arriving at the creative helm of Saint Laurent in 2016, the Belgian designer has conceived a number of store concepts, notably Saint Laurent Rive Droite. Introduced in 2019 on the Rue Saint-Honoré, the retail format, dotted with vintage furnishings, marked a departure from the brand’s fleet of minimal stores featuring acres of vein-y black-and-white marble and gleaming chrome shelves.

A location on Boulevard Saint-Germain in the former historic Left Bank location of Sonia Rykiel introduced a “raw” design, the interior stripped down to the concrete and the heating ducts and wiring exposed.

Vaccarello said the Champs-Élysées concept differs from both of those stores “due to its unique combination of materials and a new, different interior configuration.”

He noted, however, that he incorporated signature elements from other Saint Laurent stores, including large tables in colorful marble, and unique mixes of materials.

Luxury and durability guided his selection of premium marble, brass and sustainable woods, working closely with top global suppliers and local artisans.

Vaccarello confessed he’s not much of a fashion shopper himself. Still, he said his “final design was created considering a customer-oriented approach.”

“Ease of movement, clear product visibility, and a welcoming atmosphere were top priorities but also offering a really new experience for our usual Parisian customers,” he said.

Bellettini said all new Saint Laurent stores going forward will adopt Vaccarello’s design concept, adapted according to the size and location.

“The rest of the stores will change over time,” she said, without giving any precise timetable for renovations. “Anthony felt very strongly that it was time to evolve the design of our stores and what they represent — as he has done with our collections.”

She noted that “it is very natural that our stores evolve to better represent the elevation seen in our products and our collections.”

Bellettini did not share financial projections for the new Champs-Élysées flagship, but said the high-profile location would have an “incremental impact on our business” and reach new clienteles.

“The location, the size, the design, the breadth of the offer in store and the client experience are all factors that will enhance our business,” she said in the interview.

Two years ago, when Saint Laurent revealed its intention to open on the Champs-Élysées, Vaccarello said he wanted to realize one of founder Yves Saint Laurent’s wishes when he first arrived in Paris: “He wanted his name to be written in fiery letters on the Champs-Élysées.”

Bellettini said she’s “even more convinced” of the importance and value of the location, which is steps away from a large-scale Dior boutique that had originally been considered temporary during the long renovations of its historic Avenue Montaigne location. Also under construction nearby, under hoarding of a giant silver trunk, is a gargantuan Louis Vuitton destination that is expected to blend elements of retail, culture and accommodation.

The wide, handsome avenue between Place de la Concorde and the Arc de Triomphe “is a destination for anyone living in or visiting Paris, so having a large flagship store here allows us to showcase all our product categories to a very large number of people who will immerse themselves in a truly Saint Laurent experience,” Bellettini explained. “The design expresses the essence of the brand and what we stand for and it will further differentiate Saint Laurent in the market.”

The new location brings to 297 the number of directly operated Saint Laurent stores in the world, 17 of which opened this year.

Several years ago, Saint Laurent began trimming its wholesale distribution in North America and Europe, which “opened up the possibility for the brand to open more directly operated stores in cities that are not capitals,” Bellettini said, adding it also developed its store presence in the Middle East.

As for Asia, Saint Laurent arrived later versus other brands. “We have caught up, but there are still opportunities to open new locations in cities across the region,” she said. “So if I look at the strategy of Saint Laurent, it’s quite balanced in terms of where we are opening and where we are investing, and we plan to continue this way.”

The brand is certainly well represented in Paris, with a new location on the Avenue Montaigne under construction under a giant black lacquer box, and its Rue de Grenelle boutique also under renovation, the hoarding directing shoppers to its historic location on the Place Saint-Sulpice.

“For Saint Laurent, it makes sense to have additional square meters in Paris, which is such a fundamental city for our maison,” Bellettini said. “Every new store we open attracts new clients while offering something new to existing ones who like to explore different parts of each city.”

For example, she described Avenue Montaigne as a “luxury destination while Avenue des Champs-Élysées is a landmark on its own, attracting differentiated traffic from all over the world.”

By contrast, its Left Bank stores “are smaller and more specific in the assortment for the local clientele of that part of the city… The strategy is to showcase the brand and its DNA in different areas of a city that is fundamental for our brand, allowing clients to engage with us in the appropriate way wherever they are.”

The executive said local clients have been Saint Laurent’s “main focus” for years, and a priority well before the pandemic, when that became “the only way to do business.”

“I really believe that you have to win over the clients in their own countries first — so that when they travel, the brand is relevant to them,” Bellettini explained. “It is important for us to offer everybody the Saint Laurent experience wherever they are — excellent service and product selection that reflects Anthony’s collection and the spirit of the individual store.”

The Champs-Élysées flagship showcases Saint Laurent’s complete brand offer across women’s ready-to-wear, handbags, shoes, accessories and fine jewelry, with a surfeit of very high-end propositions.

Yet not everything is on display. Bellettini said the store concept allows customers to focus their attention, rather than being overwhelmed by too many products or “intimidating architecture.”

“This represents very well the evolution that, thanks to Anthony, has happened at Saint Laurent,” she explained.

Bellettini, who is also a deputy CEO at Saint Laurent parent Kering in charge of brand development, acknowledged that the new location arrives at a time when the consumer environment is uneven.

“This year, the more aspirational consumption is facing some pressure and normalized, while the high-end luxury consumption continues to grow,” she said.

Nevertheless, the Champs-Élysées location is billed as a destination designed to appeal to all comers, whether they end up buying a wallet, a gown or a handbag in precious skins.

“We want everyone who enters to feel comfortable and to have a fantastic experience,” Bellettini said. “You can browse the store and discover products yourself; you can be helped by staff providing exceptional service, or you can have a by-appointment experience on the top floor.

“What matters to me is that each client’s experience is unique and leaves a positive mark in their life,” she added. “Whatever you purchase, you will feel luxury — and we want to transmit this in every store.”

Saint Laurent restored the Haussmannian facade of the location, and built the store following stringent LEED guidelines, achieving 100 percent energy-efficient LED lighting, for example.

Bellettini said Saint Laurent is “on target to receive the highest platinum certification next year.”