Why she will prevail in bidding war for Anadarko

Hollub counters that Occidental is outperforming other drillers in the Permian, squeezing more oil from the region’s shale rocks at lower cost.

According to Hollub, Occidental’s oil wells in the Delaware Basin perform about 74 percent better than Anadarko’s. Hollub says Occidental also spends less to drill wells and to perform hydraulic fracturing, the process of injecting water and minerals underground to create fractures in shale formations, allowing oil and gas to flow.

Occidental could apply its expertise to 10,000 wells if it purchased Anadarko, Hollud said.

“We’ve been working this two years and in the two years that we’ve been working this, there is no other opportunity that has the upside potential that this does,” she said. “This is one of those very rare opportunities.”

Occidental says the deal can increase free cash flow by $3.5 billion over the next two years through synergies and capital reduction. The company will achieve those savings by applying logistics solutions and proprietary drilling software and modelling to Anadarko’s operations, says Hollub.

In addition to enhancing the Permian wells, Hollub says Occidental can improve Anadarko’s performance in Colorado’s DJ Basin, where it holds a leading position.

She notes that Occidental has drilled 23 of the top 100 wells in the Permian, but used about 25 percent less proppant — the sand and minerals critical to fracking — than other drillers on the list. That creates about half a million dollars in savings per well, she said.