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Will Occidental’s $38B Gamble Be a Shale Win?

Occidental Petroleum, ranked 167 in Fortune 500, recently snatched victory from Chevron with a winning bid of $38 billion for one of the largest U.S.  Independent oil and gas companies; Anadarko ranked just 237, making this the largest American oil and gas merger in more than a decade and the 11th biggest ever, for an energy and power company, according to business data provider Refinitiv. 

Back in April, Chevron Corporation announced its $33 billion bid for Anadarko which was quickly superseded by Occidental Petroleum’s shut-out bid worth around 20 per cent more to Anadarko’s shareholders. Vicki Hollub, Occidental Petroleum’s CEO, bid of $38 billion was secured by $10 billion in backing from Warren Buffet, CEO Berkshire Hathaway. Buffet’s support enabled Vicki Hollub to avoid the need to put the deal to a vote of her own shareholders.

Paying for the purchase

Occidental plans to sell assets in the U.S. and Africa.  Proposed disposals include Anadarko’s pipeline business in the U.S. worth an estimated $7.5 billion, as well as its wells in the Gulf of Mexico said to be worth around US$6 billion.

Read more https://www.rigzone.com/news/will_occidentals_38b_gamble_be_a_shale_win-07-jun-2019-159024-article/

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