We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Occidental Petroleum Divests Non-Core Assets to Lower Debt
Read MoreHide Full Article
Occidental Petroleum Corporation (OXY - Free Report) announced that it has completed the divestiture of Anadarko Petroleum’s Mozambique LNG stake to TOTAL S.A. for $3.9 billion. This deal is part of Occidental Petroleum’s binding agreement to sell Anadarko’s African assets to TOTAL for $8.8 billion.
In addition to Mozambique, Anadarko’s assets located in Algeria, Ghana and South Africa will be sold to TOTAL, per the agreement entered into between the companies in August 2019. Occidental Petroleum also completed the sale of its holdings in Plains All American Pipeline, L.P. (PAA - Free Report) and Plains GP Holdings, L.P. (PAGP - Free Report) for $650 million.
Thanks to the divestiture of these non-core assets, the company is on track to achieve its asset divestiture target in the range of $10-$15 billion. In addition to divesting non-core assets, Occidental Petroleum expanded operations in the Midland Basin via a partnership with Ecopetrol.
The company utilized the net proceeds from the sale of these assets to de-lever its balance sheet, and focus on investment in higher-margin and high-return production from Permian resources.
Occidental Petroleum Poised to Gain
Occidental Petroleum had to resort to high-cost debt from Warren Buffett's Berkshire Hathaway to complete the acquisition of Anadarko. Although this acquisition added more debt to Occidental Petroleum’s balance sheet, the contribution from high-quality acquired assets will assist the company to carry on strong performance.
The combined company will have a production capacity of 1.3 million barrels of oil equivalent per day and is expected to be accretive to free cash flow within a year of the acquisition. The combined company will generate $3.5 billion in free cash flow through $2.0 billion of annual cost synergies and $1.5 billion of annual capital reductions.
Price Performance
Shares of Occidental Petroleum have underperformed the industry in the past three months.
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 7 stocks to watch. The report is only available for a limited time.
Image: Bigstock
Occidental Petroleum Divests Non-Core Assets to Lower Debt
Occidental Petroleum Corporation (OXY - Free Report) announced that it has completed the divestiture of Anadarko Petroleum’s Mozambique LNG stake to TOTAL S.A. for $3.9 billion. This deal is part of Occidental Petroleum’s binding agreement to sell Anadarko’s African assets to TOTAL for $8.8 billion.
In addition to Mozambique, Anadarko’s assets located in Algeria, Ghana and South Africa will be sold to TOTAL, per the agreement entered into between the companies in August 2019. Occidental Petroleum also completed the sale of its holdings in Plains All American Pipeline, L.P. (PAA - Free Report) and Plains GP Holdings, L.P. (PAGP - Free Report) for $650 million.
Thanks to the divestiture of these non-core assets, the company is on track to achieve its asset divestiture target in the range of $10-$15 billion. In addition to divesting non-core assets, Occidental Petroleum expanded operations in the Midland Basin via a partnership with Ecopetrol.
The company utilized the net proceeds from the sale of these assets to de-lever its balance sheet, and focus on investment in higher-margin and high-return production from Permian resources.
Occidental Petroleum Poised to Gain
Occidental Petroleum had to resort to high-cost debt from Warren Buffett's Berkshire Hathaway to complete the acquisition of Anadarko. Although this acquisition added more debt to Occidental Petroleum’s balance sheet, the contribution from high-quality acquired assets will assist the company to carry on strong performance.
The combined company will have a production capacity of 1.3 million barrels of oil equivalent per day and is expected to be accretive to free cash flow within a year of the acquisition. The combined company will generate $3.5 billion in free cash flow through $2.0 billion of annual cost synergies and $1.5 billion of annual capital reductions.
Price Performance
Shares of Occidental Petroleum have underperformed the industry in the past three months.
Zacks Rank
Occidental Petroleum currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 7 stocks to watch. The report is only available for a limited time.
See 7 breakthrough stocks now>>