Occidental Petroleum has agreed to acquire CrownRock, a privately held Permian Basin oil producer, in a deal valued at $12 billion including debt.

The acquisition will add approximately 170,000 net acres in the Midland Basin, significantly expanding Occidental's footprint in the most prolific oil-producing region in the United States.

The deal comes amid a wave of consolidation in the Permian Basin, as operators seek scale to compete more effectively and generate returns for shareholders.

Occidental will pay $9.1 billion in cash and assume $1.2 billion in debt. The company expects the deal to be immediately accretive to earnings and free cash flow.