Selloff or Market Correction? Either Way, Here's What to Do NextSee Overvalued Stocks

Occidental to increase dividend payments after cutting debt - CEO

Published 11/05/2021, 02:20 PM
Updated 11/05/2021, 04:34 PM
© Reuters. FILE PHOTO: The Occidental Petroleum Corp headquarters is pictured in Los Angeles, California September 16, 2013.  REUTERS/Mario Anzuoni
BAC
-
OXY
-

By Sabrina Valle

HOUSTON (Reuters) -U.S. oil producer Occidental Petroleum Corp (NYSE:OXY) will increase dividend payments to shareholders once it gets debt levels to $25 billion, Chief Executive Vicki Hollub said on Friday.

"We are going to get there sooner than we expected," Hollub told analysts on a call to comment on the company's third-quarter results.

Occidental quadrupled its debt in 2019 to $40 billion after buying https://www.reuters.com/article/us-anadarko-petrol-m-a-chevron/chevron-drops-anadarko-takeover-battle-after-occidental-raises-bid-idUSKCN1SF1GX rival oil producer Anadarko Petroleum (NYSE:APC) and its prized assets in the United States' huge Permian shale oilfield.

It used cash from this year's higher commodity prices to repay $4.3 billion of long-term debt in the third quarter, bringing it down to $31 billion. Occidental aims to pare debt below the $25 billion target, she said.

The company, which earlier this week declared a quarterly dividend of a penny per share on common stock, did not specify by how much its dividends would increase.

Shares fell 1% to $33.44 in afternoon trading after Hollub ruled out resuming buybacks, saying repurchases are "a longer-term possibility for us" but will not come in "the nearest term."

Occidental is the only producer "not giving meaningful cash returns back to investors" as oil prices approach a seven-year high, despite a "pretty material" potential to do so after raising its free cash flow yield, Bank of America (NYSE:BAC) analyst Douglas Leggate said on Friday.

The company can increase dividends without significant production growth in the coming years, Hollub said. Oil prices could remain well above $50 to $60 per barrel for up to five years, she said during a Federal Reserve energy conference on Friday.

Occidental production is expected to stay at 1.14 million barrels of oil and gas per day (bpd) in the fourth quarter, from 1.16 million bpd in the previous three months.

© Reuters. FILE PHOTO: The Occidental Petroleum Corp headquarters is pictured in Los Angeles, California September 16, 2013.  REUTERS/Mario Anzuoni

Capital spending is expected to increase in the fourth quarter due to maintenance activities in the company's three business segments, it said.

Its profit more than doubled to $836 million in the third quarter from the previous three months, beating market estimates.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.