Occidental Petroleum (NYSE: OXY) recently closed its $12 billion acquisition of CrownRock. The deal will significantly enhance its position in the Permian Basin and free cash flow. However, it also loaded the company with debt. The company borrowed $9.1 billion to close the deal and assumed $1.2 billion of CrownRock's existing debt.

The oil company plans to significantly reduce its debt in the coming years to ease the potential pressure on its balance sheet. It's already 85% of the way toward its initial target, putting it well ahead of schedule.

Occidental Petroleum set a target of reducing its debt principal by at least $4.5 billion within 12 months of closing its CrownRock acquisition, which occurred on Aug. 1. The company planned to achieve that goal through a combination of excess free cash flow and the proceeds from asset sales. Occidental expects CrownRock to boost its free cash flow by $1 billion annually at $70 oil (crude oil is currently around $75) and aims to sell $4.5 billion to $6 billion of assets in the future.

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Source Fool.com