HOUSTON - Occidental (NYSE: OXY) has made significant strides in its debt reduction efforts, announcing today that it has reduced its principal debt by $3 billion in the third quarter of 2024. The company's robust cash flow and strategic divestitures have propelled it toward achieving nearly 85% of its $4.5 billion debt reduction target.
The recent public offering of common units in Western Midstream Partners, LP (NYSE: NYSE:WES) generated $700 million last week. This is part of Occidental's broader divestiture plan, which has amassed approximately $1.7 billion in closed or announced sales this year. The company expects further debt reduction following the anticipated closure of the Delaware Basin Barilla Draw divestiture, slated for late in the third quarter. This transaction, valued at $818 million, will contribute to a total year-to-date debt reduction exceeding $3.8 billion.
Occidental's President and CEO Vicki Hollub stated that the company's financial actions strengthen its balance sheet and hasten the return of value to shareholders. The energy firm remains committed to its deleveraging program, with plans to continue applying proceeds from its divestiture program and free cash flow toward reducing debt.
The company had previously committed to a debt reduction of at least $4.5 billion within a year following the acquisition of CrownRock, an initiative that appears to be on track with the current progress.
Occidental is a major international energy company with operations primarily in the United States, the Middle East, and North Africa. It is one of the largest oil and gas producers in the U.S., with significant production in the Permian and DJ basins, as well as offshore in the Gulf of Mexico. The company's midstream and marketing segment ensures the flow and value maximization of its oil and gas, while its chemical subsidiary, OxyChem, produces essential building blocks for various products. Additionally, Occidental's Oxy Low Carbon Ventures subsidiary focuses on advancing technologies and solutions that contribute to business growth and emission reductions.
This announcement is based on a press release statement and includes forward-looking statements subject to risks, uncertainties, and assumptions. Actual results may differ materially from those projected due to various factors, including economic conditions, market volatility, and operational risks. For more detailed information, Occidental's filings with the U.S. Securities and Exchange Commission can be consulted.
In other recent news, Occidental Petroleum Corporation (NYSE:OXY) reported strong performance in its second quarter 2024 earnings call. The company showcased its highest quarterly production in four years, generating $1.3 billion in free cash flow before working capital changes. Additionally, Occidental announced progress on its strategic divestiture program, including the integration of assets from CrownRock expected to drive operational efficiencies and value generation.
In a significant development, CrownRock Holdings, L.P. plans to sell 29,560,619 shares of Occidental's common stock through an underwritten secondary public offering. Occidental itself is not selling any shares in this transaction, and all proceeds from the sale will go to CrownRock Holdings. The sale of shares will be managed by financial institutions J.P. Morgan, Morgan Stanley (NYSE:MS), and RBC (TSX:RY) Capital Markets.
In related news, Western Midstream Partners initiated a secondary public offering of 19 million common units, managed by Barclays (LON:BARC), and Occidental halted its planned exchange offer for certain senior notes issued by CrownRock L.P. and CrownRock Finance, Inc. Additionally, Occidental agreed to sell a portion of its assets in the Delaware Basin to Permian Resources (NYSE:PR) for approximately $818 million. These are among the recent developments affecting the company.
InvestingPro Insights
As Occidental (NYSE: OXY) continues its debt reduction journey, the latest financial data from InvestingPro shows a company with a solid foundation and a commitment to shareholder value. Occidental's market capitalization stands at a substantial $52.17 billion, reflecting the market's recognition of its scale and significance in the energy sector. The company's P/E ratio, a measure of its current share price relative to its per-share earnings, is 13.2, indicating that investors may find the stock reasonably valued compared to its earnings.
Occidental's dedication to its shareholders is further evidenced by its impressive track record of maintaining dividend payments for 51 consecutive years, a testament to its financial stability and consistent performance. This commitment aligns with the company's recent efforts to strengthen its balance sheet, as highlighted by CEO Vicki Hollub.
InvestingPro Tips for Occidental provide additional context for investors considering the company's stock. Analysts predict the company will be profitable this year, a positive sign for potential investors. Furthermore, the stock generally trades with low price volatility, which may appeal to investors seeking a more stable investment in the energy sector. For those interested in a deeper dive into Occidental's financial performance and future outlook, InvestingPro offers a total of 6 additional tips at: https://www.investing.com/pro/OXY
Occidental's recent debt reduction milestones, coupled with the InvestingPro data and tips, paint a picture of a company that is not only managing its financial obligations with care but also providing a stable investment opportunity in a volatile market. With analysts' positive profitability predictions and a history of consistent dividend payments, Occidental appears well-positioned to continue delivering value to its shareholders.
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