Selected Reads

Smartkarma

Equity Bottom-Up

Making headlines, Western Australia has recorded five new local cases of COVID-19 overnight, $40 million expansion of Coogee’s chlori-alkali plant approved and Troy Resources undertakes a $26 million recapitalisation in a bid to save the company.<a target="_blank" rel="noopener nofollow" href="https://www.spglobal.com/platts/en/market-insights/latest-news/petrochemicals/022522-occidental-planning-overhaul-of-some-chlor-alkali-assets-cfo">Continue listening on Latest News from Platts.com»</a>

Morningstar

Morningstar, Inc.

When Occidental agreed to acquire Anadarko Petroleum for $57 billion, we were enthusiastic at first, even though the proposed consideration reflected a takeover premium of more than 60%. As a result, we initially raised our fair value estimate for Oxy to $64 per share on May 10. This was primarily due to 1) the concurrent agreement to sell Anadarko's Africa assets to Total for $8 billion, a premium to our intrinsic value estimate, and 2) the potential for Oxy to juice the value of Anadarko's…

Occidental Petroleum has cut the chaff from its upstream portfolio in the past few years, shedding noncore assets in North Dakota, Colorado, Kansas, Bahrain, Iraq, and Yemen. And like peers, it made huge strides cutting costs and enhancing productivity during the 2015-16 downturn. As a result, the firm is now able to deliver cash-flow-neutral production growth of about 5% per year, with West Texas Intermediate crude averaging just $50/barrel (while maintaining the dividend).On May 9, the firm…

Occidental Petroleum announced May 9 that it has formally entered into an agreement to acquire Anadarko Petroleum in a deal valued at $57 billion, or $76 per share (78% cash). The announcement followed confirmation that Chevron, which had previously agreed to acquire Anadarko for $65 per share (25% cash), is not willing to increase its offer and will instead receive a $1 billion breakup fee. The terms of the Occidental agreement are consistent with the most recent bid announced by the company…

Citing cost and capital discipline, Chevron announced May 9 it would not submit a counterproposal to acquire Anadarko in the wake of Oxy’s revised bid. Assuming Anadarko terminates the existing merger agreement, it will have to pay Chevron a $1 billion termination fee. Chevron still intends to increase its annual share repurchases to $5 billion from $4 billion, which it originally planned to do upon closing of the deal. The original offer did not result in a change in our fair value estimate or…

United States

Occidental Petroleum Corporation explores for, develops, produces, and markets crude oil and natural gas.  The Company also manufactures and markets a variety of basic chemicals, vinyls and performance chemicals. Occidental also gathers, treats, processes, transports, stores, trades and markets crude oil, natural gas, NGLs, condensate and carbon dioxide (CO2) and generates and markets power.

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