MCKITTRICK, CA - MARCH 23:  Pump jacks and wells are seen in an oil field on the Monterey Shale formation where gas and oil extraction using hydraulic fracturing, or fracking, is on the verge of a boom on March 23, 2014 near McKittrick, California. Critics of fracking in California cite concerns over water usage and possible chemical pollution of ground water sources as California farmers are forced to leave unprecedented expanses of fields fallow in one of the worst droughts in California history. Concerns also include the possibility of earthquakes triggered by the fracking process which injects water, sand and various chemicals under high pressure into the ground to break the rock to release oil and gas for extraction though a well. The 800-mile-long San Andreas Fault runs north and south on the western side of the Monterey Formation in the Central Valley and is thought to be the most dangerous fault in the nation. Proponents of the fracking boom saying that the expansion of petroleum extraction is good for the economy and security by developing more domestic energy sources and increasing gas and oil exports.   (Photo by David McNew/Getty Images)
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MCKITTRICK, CA - MARCH 23: Pump jacks and wells are seen in an oil field on the Monterey Shale formation where gas and oil extraction using hydraulic fracturing, or fracking, is on the verge of a boom on March 23, 2014 near McKittrick, California. Critics of fracking in California cite concerns over water usage and possible chemical pollution of ground water sources as California farmers are forced to leave unprecedented expanses of fields fallow in one of the worst droughts in California history. Concerns also include the possibility of earthquakes triggered by the fracking process which injects water, sand and various chemicals under high pressure into the ground to break the rock to release oil and gas for extraction though a well. The 800-mile-long San Andreas Fault runs north and south on the western side of the Monterey Formation in the Central Valley and is thought to be the most dangerous fault in the nation. Proponents of the fracking boom saying that the expansion of petroleum extraction is good for the economy and security by developing more domestic energy sources and increasing gas and oil exports. (Photo by David McNew/Getty Images)
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New York CNN Business —  

A bidding war has emerged in America’s shale oil patch.

Occidental Petroleum (OXY) revealed a $76-a-share offer on Wednesday to acquire oil driller Anadarko Petroleum. (APC)

The cash-and-stock offer from Occidental is about 20% richer than the $33 billion takeover deal Anadarko reached earlier this month with energy giant Chevron (CVX).

Anadarko’s shares soared 11.5% on Wednesday. The company’s board of directors promised to “carefully review” the new offer before responding.

The bidding war underlines the frenzy among oil companies to grab the hottest drilling properties in America’s shale oil boom.

Anadarko owns prized land in the Permian Basin, the shale oilfield in West Texas. The surging Permian has catapulted the United States beyond Russia and Saudi Arabia as the world’s leading oil producer.

“We will deploy our expertise to enhance the performance and productivity of Anadarko’s assets not only in the Permian, but globally,” Occidental CEO Vicki Hollub said in a statement.

Occidental said acquiring Anadarko would bolster its position as the No. 1 producer in the Permian, with 533,000 barrels per day of daily production.

“The Permian is a spectacular resource,” said Ryan Fitzmaurice, energy strategist at Rabobank. “It’s already producing more than the majority of OPEC members. And there’s a lot of runway there.”

A marriage between Occidental and Anadarko would create an energy giant worth over $100 billion with daily production of more than 1.4 million barrels of oil.

“The returns in the Permian are just unrivaled,” said Zoe Sutherland, senior analyst at consulting firm Wood Mackenzie. “Anyone that hasn’t gotten into the game is now desperate to get a position there.”

Hollub said Occidental has been “focused” on Anadarko for “several years” because it believes the two companies are a good match.

Beyond the Permian Basin, Anadarko owns shale assets in Colorado as well as valuable deepwater drilling properties in the Gulf of Mexico. Anadarko is also a player in Mozambique, where it has a liquefied natural gas project.

“Anadarko has an amazing portfolio,” Sutherland said. “And that’s not really being reflected in the share price. That makes it very attractive as a takeover target.”

Occidental’s offer is split 50/50 between cash and stock. The bid values Anadarko at $57 billion, including debt. The Chevron deal values the company at nearly $47 billion.

If a deal is consummated with Occidental, the Anadarko acquisition would be the fourth-largest oil and gas deal in history, according to Drillinginfo Market Research. It would also be the biggest since Royal Dutch Shell’s (RDSA) 2015 takeover of BG Group for $82 billion, including debt.

In a statement, Anadarko’s board of directors said it will evaluate the Occidental offer in consultation with its legal and financial advisers. The board said it has not yet determined if the new proposal constitutes a superior offer.

Soon after Chevron reached its cash-and-stock deal for Anadarko on April 12, reports emerged indicating Occidental had been planning its own offer.

Occidental said the Anadarko deal would immediately add to its bottom line and cash flow. The company estimated $3.5 billion of free cash flow improvements through $2 billion of cost synergies and $1.5 billion of capital reductions.

After nearly 12 hours of silence, Chevron put out a brief statement late Wednesday that made no mention of a higher bid.

“We are confident the transaction agreed to by Chevron and Anadarko will be completed,” Chevron said.

Occidental shares fell 0.5% on Wednesday. Chevron also dropped 3%.

The oil supermajors were late to the shale oil boom, leaving the early work to independent drillers like Anadarko and EOG Resources (EOG). But Exxon, Chevron and BP have spent billions of dollars in recent years to play catch-up and are all now significant players in shale.

Chevron could be forced to shell out billions more should it decide to sweeten its offer for Anadarko.

“It’s fairly likely Chevron will counter. This could go on for some time,” said Sutherland.