Welcome to Big Oil's era of "both/and"

• It will significantly expand Occidental's acreage in the most prolific U.S. oilfield.

The intrigue: It's been a while since we covered Occidental's oil plans — instead the action has been centered around their carbon dioxide removal business.

• And that gets to a wider trend, with several giants looking to bolster their oil and "clean" business lines simultaneously.
• That posture comes amid rising global oil demand, but also expanding opportunities — and pressure to address climate change.

What they're saying: Occidental is a "model for a new oil and gas producer" Enverus Intelligence Research analyst Andrew Dittmar said in a note.

• He points out the company, as it "doubles down" on Permian production, is building the world's largest direct air capture plant in Texas.

The big picture: Consider Exxon's planned $60 billion purchase of shale giant Pioneer Natural Resources.

• Exxon's climate-related lines, meanwhile, are a small share of their budget, but those resources are expanding.
• Last week, it bumped its 2022-2027 budget for low-carbon businesses — Co2 capture, hydrogen and more — and emissions cutting by $3 billion to reach $20 billion
• BP in February slowed plans to cut oil and gas production, while adding $8 billion apiece through 2030 to its fossil and "transition" lines.

Yes, but: Traditional oil and gas development remain the dominant share of industry investment.

• "Big Oil CEOs continue to show they just don't care about the costly and dangerous impact their industry has on our economy, health, and climate," the group Climate Power said in a statement on Occidental's deal.

The Occidental deal is the latest — but not the last — case of U.S. giants growing even bigger.

• One reason for breakneck consolidation in the shale patch is that prime geology, even in the vast Permian, isn't limitless.

• High valuations in recent deals shows "an urgency by large companies to secure the remaining high-quality U.S. shale inventory," Enverus' Dittmar wrote in his note.

State of play: Another driver is that Occidental's and CrownRock's holdings line up nicely, Jefferies analysts said.

• They see "complementary overlapping acreage," which "should open up the ability to add efficiencies, including longer laterals."
• Occidental said the deal adds 170,000 barrels of oil-equivalent per day in production from "high-margin, lower-decline" wells, and another 1,700 undeveloped locations.

Zoom out: A burst of deals — none bigger than Exxon's Pioneer acquisition announced in October — are reshaping the U.S. industry.

• Total transaction value of Permian assets has now surpassed $100B this year, smashing the prior 2019 mark, per Wood Mackenzie analysis.
• And Occidental will be a top-3 Permian producer with the new deal, behind only the majors, they said.

The bottom line: Scale is the coin of the crude oil realm, and this won't be the last deal.