|Bid||14.52 x 2900|
|Ask||14.53 x 1000|
|Day's Range||13.91 - 14.66|
|52 Week Range||9.00 - 54.05|
|Beta (5Y Monthly)||2.02|
|PE Ratio (TTM)||N/A|
|Earnings Date||Jul. 29, 2020 - Aug. 03, 2020|
|Forward Dividend & Yield||0.44 (0.29%)|
|Ex-Dividend Date||Jun. 12, 2020|
|1y Target Est||15.02|
Occidental Petroleum (OXY) slashed its quarterly dividend for the second time in four month, while Williams Companies (WMB) plans to develop solar energy to power its operations in nine states.
It's the second time in three months that the debt-laden oil company is slashing its quarterly payout.
Occidental's (OXY) board of directors decides to lower dividend rate again to preserve liquidity amid this unprecedented economic crisis caused by COVID-19.
The price of oil seems to be trending upward; maybe this is a buying opportunity. Four stocks in particular to avoid in June are Halliburton (NYSE: HAL), United States Oil Fund (NYSEMKT: USO), Occidental Petroleum (NYSE: OXY), and Patterson-UTI Energy (NASDAQ: PTEN). Here's why these Motley Fool contributors say you shouldn't be tricked into picking up shares of these likely underperformers.
(Bloomberg) -- Occidental Petroleum Corp. cut its quarterly dividend by 91% to the lowest since at least the 1970s amid the pandemic-driven collapse in energy demand that has strained the oil explorer’s ability to shoulder its debt.Occidental shareholders will receive a penny per share on July 15, the Houston-based company said in a statement Friday. The move extends a cut announced in March when it trimmed the payout to 11 cents from 79 cents.The surprise cut came the same day under-fire Chief Executive Vicki Hollub and the rest of the board of directors won re-election at Occidental’s annual shareholders’ meeting. The company will announce the final vote tallies in a regulatory filing later.Hollub has weathered extreme pressure from shareholders ever since outbidding Chevron Corp. to win the purchase of Anadarko Petroleum Corp. last year. The deal saddled Occidental with some $40 billion of debt that was looking hard to pay off even before Covid-19 wiped out global oil demand, sending crude prices plunging to an unprecedented minus $40 a barrel at one point last month.The benchmark U.S. oil price rebounded 88% in May to close the month above $35 a barrel, but it’s still 44% down from its high point in January and below a level that would ensure healthy cash flow for most producers.The dividend reduction will save Occidental about $360 million a year, but it’s a drop in the ocean compared to the wall of debt due over the coming years. The company probably kept a token payout to avoid mandatory selling of the stock by dividend funds and to signal that it aims to restock the stipend at some point in the future, according to Leo Mariani, an analyst at KeyBanc Capital Markets.“They need that extra money at $35 a barrel oil, so it’s the right move,” Mariani said by phone. “They’ve got to do whatever they can to survive.”What Bloomberg Intelligence SaysAlready reeling from elevated debt, a weak fundamental backdrop and investors disgruntled by the Anadarko deal, Occidental doesn’t have many near-term positives we can speak to.\-- Vincent G. Piazza and Evan Lee, analystsRead the full report here.The company’s primary focus is on “maximizing liquidity and reducing debt,” Hollub said at the annual meeting, held virtually on Friday. The company has gone from being a steady, diversified oil producer to a debt-laden, shale-focused driller that now has a market value of just $11.7 billion, less than a third of the price it paid for Anadarko. Its credit rating was downgraded to junk in March.The stock dropped 5.1% to $12.95 in New York on a day when West Texas Intermediate oil futures jumped more than 5%.Hollub fended off a shareholder revolt by making peace with the company’s second-largest shareholder, billionaire Carl Icahn, ending a nine-month public battle that included personal barbs against the CEO. However, it came at a cost. Hollub and her fellow directors agreed to cede some control by putting nominees of the activist investor on the board.(Updates with analyst’s comment from sixth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
HOUSTON, May 29, 2020 -- Occidental Petroleum Corporation (NYSE:OXY) said today that its Board of Directors has declared a regular quarterly dividend of $0.01 per share on.
(Bloomberg Opinion) -- The amount of new debt issued this year in the U.S. investment-grade corporate bond market will reach $1 trillion today, by far the fastest pace in history. The implications of that milestone depend on how you look at it.For businesses that had been ravaged by the coronavirus pandemic and the ensuing nationwide lockdowns, access to capital markets was a lifeline to get through the worst of the economic collapse. Sure, Carnival Corp. had to offer interest rates like a junk-rated borrower and Boeing Co. needed to include a so-called coupon step-up provision to offset jitters that it could lose its investment grades. But, in the words of Federal Reserve Chair Jerome Powell, these deals avoided turning “liquidity problems into solvency problems” for brand-name American companies.It’s worth remembering that until the Fed stepped in with extraordinary support for credit markets, averting widespread failures was far from guaranteed. Investors pulled a staggering $35.6 billion and $38 billion from investment-grade funds in the weeks ended March 18 and March 25, respectively. Before 2020, the previous record was $5.1 billion of outflows. I wrote on March 19 that bond markets were veering into a vicious cycle that could get ugly in a hurry — four days later, the Fed announced what would end up becoming a $750 billion backstop for corporate America.Now, the Fed hasn’t actually had to buy any individual bonds yet, a fact that Powell seems proud to share. “We may have to be lending money to those companies, but even better, they can borrow themselves now, and a lot of that has been happening and that’s a really good thing,” he said during May 19 testimony before the Senate Banking Committee.Most people would probably agree with that assessment, at least for the immediate future as the country grapples with restarting the world’s largest economy. But what about the longer-term view?Here, the rampant borrowing paints a more sobering picture. As of late April, 1,287 issuers worldwide rated between AAA and B- by S&P Global Ratings were considered at risk of a potential downgrade, up from 860 in March and 649 in February. That surpasses the previous all-time high set in 2009. “Generally, we expect heavy credit erosion in coming months as issuers, especially those in the lower-rated spectrum come under heavy fire from poor earnings, continued difficulties in managing cost structures, and market volatility creating limited funding opportunities,” said Sudeep Kesh, head of S&P’s credit markets research.That’s bad enough, but doesn’t even strike at the heart of the issue. Last year was supposed to be the beginning of a broad “debt diet” among companies that borrowed huge sums to finance mergers and acquisitions during the longest expansion in U.S. history. That didn’t end up taking place on a wide scale. Even a success story like AT&T Inc., which made headway in trimming its debt stack, still found itself back in the bond market recently, borrowing $12.5 billion on May 21 in what was the biggest deal since Boeing’s $25 billion blockbuster offering.When it comes to companies directly impacted by the coronavirus pandemic or structural changes to their industries, the “big three” of S&P, Moody’s Investors Service and Fitch Ratings haven’t shied away from taking action. Ford Motor Co., Kraft Heinz Co., Macy’s Inc. and Occidental Petroleum Corp. are just a few of the “fallen angels” that lost their investment grades earlier this year.The rating companies haven’t been quite as keen to react to high leverage metrics. I frequently refer back to this feature from Bloomberg News’s Molly Smith and Christopher Cannon, which found that of the 50 biggest corporate acquisitions in the five years through October 2018, more than half of the acquiring companies increased their leverage to a level that would seemingly merit a junk rating but remained investment grade on the assumption that they’d take that leverage down in the coming years. Those expectations seemed ambitious in 2018, when the economy was seemingly invincible. Now, no one can truly expect companies to focus on right-sizing their debt. Corporate leaders are rightfully eager to raise cash to get to the other side of the pandemic, especially with all-in yields not far off from record lows. The vast majority of the $1 trillion in borrowing so far this year was by no means imprudent.In the years ahead, however, the overhang from this issuance spree will inevitably weigh down credit ratings. A company with more debt presents a greater risk of missed interest payments than if it had fewer fixed obligations. Fortunately, for much of the previous expansion, firms had no issue finding investors willing to buy their long-term securities. That practice of rolling over debt and extending maturities might very well be the norm in the months and years ahead, too. Still, if the first five months of 2020 are any indication, investment-grade bondholders will have to get comfortable with even more bloated balance sheets and the prospect of further credit downgrades. For better or worse, with the confidence that the Fed has their back, that seems like a risk investors are willing to take.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Brian Chappatta is a Bloomberg Opinion columnist covering debt markets. He previously covered bonds for Bloomberg News. He is also a CFA charterholder.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Occidental Petroleum Corp <OXY.N> has been sued by investors who claim they suffered billions of dollars of losses because the heavily indebted company concealed its inability to weather plunging oil prices, after paying $35.7 billion (29 billion pounds) to acquire Anadarko Petroleum Corp. The proposed securities class action was filed late Tuesday in a New York state court in Manhattan on behalf of former Anadarko shareholders who swapped their stock for Occidental shares, and investors who acquired $24.5 billion of Occidental bonds that helped fund the August 2019 merger. Investors said Occidental should have disclosed in its stock and bond registration statements how quadrupling its debt load to $40 billion would leave it "precariously exposed" to falling oil prices, and undermine its ability to boost shale oil production and its common stock dividend.
To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. It's Thursday, May 21st, and I'm your host Nick Sciple, joining me once again is Motley Fool contributor, Jason Hall. Jason Hall: Running it live right now, buddy; I'm looking at Bloomberg Energy right now.
Halliburton (HAL) told investors it is cutting its dividend by 75%, while National Oilwell Varco (NOV) board suspended the quarterly payout indefinitely to retain cash in the business.
The oil price collapse is forcing potential buyers of oil and gas fields to try and renegotiate deals or otherwise abandon them entirely
Occidental Petroleum's (NYSE: OXY) deal to sell its assets in Ghana to French oil giant Total (NYSE: TOT) has unraveled. Total called off the planned transaction after it wasn't able to acquire Occidental's assets in Algeria, which was a condition of the deal. Occidental initially planned to flip its entire African portfolio to Total following its acquisition of Anadarko Petroleum for $8.8 billion.
The Zacks Analyst Blog Highlights: EOG Resources, Occidental Petroleum, ExxonMobil, Chevron and BP
U.S. stock indexes were set to open sharply higher on Monday on optimism fueled by encouraging data from a potential COVID-19 vaccine trial, with investors also counting on more stimulus to rescue the economy from a deep economic slump. Drugmaker Moderna Inc said its experimental vaccine for COVID-19 showed promising results in an early stage study. Markets were also encouraged by Federal Reserve Chairman Jerome Powell's remarks over the weekend on a gradual economic recovery, and his affirmation that more monetary stimulus was on the way if required.
In August 2019, Total and Occidental entered into a Purchase and Sale Agreement in order for Total to acquire Anadarko’s assets in Africa. Under this agreement, Total and Occidental have since completed the sale and purchase of the Mozambique and South Africa assets. The purchase and sale agreement provided that the sale of the Ghana assets was conditional upon the completion of the Algeria assets’ sale.
U.S. stock index futures surged on Monday with gains spread across stocks ranging from autos to oil as many of the hard-hit countries eased restrictions on business and social activities, boosting hopes of a global economic recovery. Oil and gas heavyweights Exxon Mobil Corp, Chevron Corp and Occidental Petroleum Corp rose between 2.5% and 5% after oil prices surged on the prospect of higher demand. Investors were also encouraged by Federal Reserve Chairman Jerome Powell's views on a recovery and hints on more monetary stimulus if required.
Total <TOTF.PA> has called off a plan to acquire Occidental Petroleum's <OXY.N> assets in Ghana, which was conditional on the completion of the acquisition of Occidental's other assets in Algeria, the French energy company said on Monday. The deal was part of an $8.8 billion (7.2 billion pounds) agreement reached between Total and Occidental to over Anadarko's assets in Mozambique, Ghana, Algeria, and South Africa.
Occidental Petroleum's (NYSE: OXY) ambitious plan to pay off the debt it took on to acquire Anadarko Petroleum has encountered many obstacles. Not only has it been unable to close some asset sales, but plummeting crude oil prices took asset values with them, which will make it impossible to achieve the company's target. Occidental Petroleum initially anticipated that it could net $15 billion from selling assets following the acquisition of Anadarko Petroleum.
Fracking activity in the U.S. has plunged as a result of ultra low oil prices and covid-19, and the number of operations may hit rock bottom in May 2020
(Bloomberg) -- As it headed toward bankruptcy, Diamond Offshore Drilling Inc. took advantage of a little-noticed provision in the stimulus bill Congress passed in March to get a $9.7 million tax refund. Then, it asked a bankruptcy judge to authorize the same amount as bonuses to nine executives.The rig operator is one of dozens of oil companies and contractors now claiming hundreds of millions of dollars in tax rebates. They are employing a provision of the $2.2 trillion stimulus law, called the CARES act, that gives them more latitude to deduct recent losses.“This is a stealth bailout for the oil and gas industry,” said Jesse Coleman, a senior researcher with Documented, a watchdog group tracking the tax claims. It’s geared to companies “that have been losing money over the last few years -- and now they get that money back as a check from the taxpayers. That’s exactly what the oil industry has been doing.”The change wasn’t aimed only at the oil industry. However, its structure uniquely benefits energy companies that were raking in record profits in 2018 as crude prices reached $76.41 per barrel, only to see their fortunes flip a year later.More than $1.9 billion in CARES Act tax benefits are being claimed by at least 37 oil companies, service firms and contractors, according to a Bloomberg News review of recent filings with the Securities and Exchange Commission. Besides Diamond Offshore, which declined to comment, recipients include oil producer Occidental Petroleum Corp. and refiner Marathon Petroleum Corp.Other oil companies say they didn’t lobby Congress for the change, which is widely available across all industries. “We did not request any benefit, but we are obligated to follow the tax laws as passed by Congress, which apply to all corporate manufacturers nationwide,” said Jamal Kheiry, a spokesman for Marathon, which got a $411 million benefit.Congress embedded the tax change governing losses in the stimulus measure early on, as lawmakers moved rapidly in March to steer trillions of dollars in aid to coronavirus-ravaged workers and companies. Alongside expanded unemployment payments and payroll loan programs, lawmakers saw an opportunity to harness the tax code to help get cash flowing to companies struggling to pay rent, workers and insurance.It “was sold as help for the little guy -- help for small business,” said Steve Rosenthal, a senior fellow with the Urban-Brookings Tax Policy Center. “In the name of ‘small business,’ we’re shoveling out billions of dollars to big corporations and rich guys.”The provision loosened rules governing how businesses deduct net operating losses -- incurred when deductible expenses exceed gross income. For years, companies were able to apply those net operating loss deductions to previous tax returns as well as going forward -- but Congress ruled out retroactive relief as part of the 2017 tax cut law.That new forward-focused approach works well when the economy is expanding, but the promise of using today’s losses as tomorrow’s deductions isn’t much help to coronavirus-battered companies with no guarantee they will survive long enough to claim them. So in the stimulus package, Congress gave businesses the chance to carry back all their losses -- and claim immediate tax refunds -- or five years from 2018, 2019 and 2020.“The thought was temporarily we should bring them back so that firms that are seeing significant losses in the next year or over the past year or two can carry those back and get some short-term liquidity,” said Garrett Watson, a senior policy analyst at the Tax Foundation, a non-profit that supports pro-growth tax policies.Traditionally, the ability to deduct net operating losses is meant to ensure companies get fair tax treatment even amid volatility, Watson said -- a plus for the notoriously boom-and-bust oil industry. “You are going to see the biggest benefits for firms like oil and gas that are seeing volatile profits -- and now, of course, extreme losses,” he said.The combination of big losses now and the congressional tax changes mean it may be years before some oil companies have to pay corporate income taxes at all.“We’re going to have some large losses this year,” ConocoPhillips Executive Vice President Don Wallette said in an April 30 earnings call. The company is in “a zero-tax-paying position in the U.S. and expect to remain there for quite some time,” Wallette said.There’s no limit on how the new refunds can be used -- and even bankrupt firms can get them.Consider Diamond Offshore. Once one of the world’s largest drilling rig contractors, it filed for Chapter 11 bankruptcy protection on April 26 after crude prices plunged along with demand for its high-tech drillships.In a first quarter filing, Diamond, which is majority owned by Loews Corp., said it had recognized a tax benefit of $9.7 million as a result of the carryback change. In an emergency motion filed with a federal bankruptcy court May 1, the company asked for the freedom to dole out $16.7 million in cash incentives to 85 of its 2,300 full-time employees, including as much as $9.7 million for nine senior executives.The company said at the time that deteriorating market conditions and the collapse of Diamond’s stock had made its existing equity-based bonus program “largely worthless.” The tax filing did not specify how the $9.7 million would be used.Dozens of other oil businesses have reported reaping the benefits, including $55 million for Denver-based Antero Midstream Corp., $41.2 million for supplier Oil States International Inc. and $96 million for Oklahoma-based producer Devon Energy Corp.Occidental Petroleum, which enlisted its employees to ask Congress to “provide liquidity to the energy industry,” said it now anticipates a cash refund of about $195 million as a result of the carryback provision and a separate change in the stimulus bill that allows the immediate refund of unused alternative minimum tax credits. An Occidental spokesperson declined to comment.Millions in RefundsNational Oilwell Varco Inc., a manufacturer of oil and gas equipment, expects a $123 million refund by carrying back its 2019 losses and applying them to its 2014 tax filing.San Antonio-based refiner Valero Energy Corp. recognized an extra $110 million by carrying back losses to 2015 -- when the corporate tax rate was 35% instead of the current 21%.Valero spokeswoman Lillian Riojas said that is tied to tax losses generated in the first quarter, since the company did not generate a net operating loss for federal income tax purposes in 2018 or 2019. And she said the actual refund will be dependent “not only on the company’s performance for the remainder of the year, but also on the impact” of other tax provisions.The benefits are “turbo-charged,” said Rosenthal, with the Urban-Brookings Tax Policy Center. That’s because businesses can carry back losses to offset income at a higher corporate tax rate of 35%, before the 2017 tax cut law lowered it 14 points. “Getting those losses at 35% is very, very favorable -- especially in 2020 when the losses are going to be devastatingly large.”The filings themselves reveal only part of the picture. Private companies are able to generate tax refunds too -- without disclosing it to the SEC. And while some public companies said they benefited from the tax break, they didn’t reveal by how much.For instance, refiner Phillips 66 boasted an effective income tax rate of just 2% for the first quarter -- well below the federal statutory income tax rate of 21% -- partly because of the carryback. But the company did not specify the amount of its expected refund.Dennis Nuss, a spokesman for Phillips 66, declined to comment when reached by phone Thursday. Representatives for Oil States, National Oilwell Varco, Antero and Devon didn’t respond to messages seeking comment.The importance of the provision hasn’t been lost on President Donald Trump’s administration. Energy Secretary Dan Brouillette recommended oil companies consider taking advantage of the expanded deduction in an April 21 interview with Bloomberg TV, calling it one of several “important liquidity tools that are going to help the industry.”Congressional tax analysts initially estimated that the expanded loss carryback provision would cost $25 billion over 10 years -- just when used by corporations. Now, some are questioning whether the final pricetag could be much higher, and Democrats are seeking to limit the value of the tax break after raising concerns it overwhelmingly helps corporations and the wealthy.In a new stimulus bill advanced Tuesday, House Democrats proposed scaling back the provision so companies could only apply losses back to 2018. Their plan also would prevent companies with “excessive” executive compensation or stock buybacks from claiming the tax break -- a change that would be retroactive back to March.Rosenthal stressed that it was logical for Congress to help businesses that were profitable before the pandemic. “But the CARES Act goes too far, tilting its benefits overwhelmingly to the wealthiest Americans,” he said in an essay. “I think Congress did not know the extent of what it was doing.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.