HOUSTON - Occidental (NYSE: OXY), a major energy company, has announced the upcoming completion of its acquisition of CrownRock, L.P., following the expiration of the waiting period mandated by the Hart-Scott-Rodino Antitrust Improvements Act of 1976. This development signifies that all conditions for closing the transaction have been met, with the exception of those to be finalized at the time of closure.
The deal is poised to be finalized in August, subsequent to the financing marketing period stipulated by the purchase agreement. Occidental's President and CEO Vicki Hollub expressed anticipation for the closure of the transaction and the integration of CrownRock's team, which is expected to enhance the company's portfolio and shareholder returns.
Occidental, with operations primarily in the United States, the Middle East, and North Africa, is one of the largest U.S. oil and gas producers. Its presence is notably significant in the Permian and DJ basins, as well as the offshore Gulf of Mexico. The company also operates in the midstream and marketing sectors to ensure the value maximization of its oil and gas assets. Additionally, its chemical subsidiary OxyChem produces essential materials for various products, while Oxy Low Carbon Ventures focuses on technologies and solutions for business growth with reduced emissions.
The acquisition of CrownRock aligns with Occidental's strategic plans for growth and the divestiture program aimed at optimizing its asset portfolio. While the company has expressed confidence in the benefits of the acquisition, it has also acknowledged the inherent risks and uncertainties associated with such transactions. These include the challenges of integrating operations, potential customer and business disruptions, litigation risks, financing conditions, and general economic factors.
This press release statement serves as the basis for the information provided, detailing the expected timeline and the strategic intentions behind Occidental's acquisition of CrownRock. Investors and stakeholders in the energy sector will be monitoring the completion of this transaction, which is representative of Occidental's broader business strategy and commitment to advancing a lower-carbon future.
In other recent news, Occidental Petroleum (NYSE:OXY) has seen a flurry of activity from analyst firms and prominent investors. Stephens recently adjusted the company's financial outlook, reducing the stock's price target to $77 from $78, while maintaining an Overweight rating. This adjustment was due to a downward revision in the firm's second-quarter cash flow per share (CFPS) and earnings before interest, taxes, depreciation, and amortization (EBITDA) estimates, primarily attributed to prereleased prices for oil, natural gas liquids, and gas.
On the investment front, Berkshire Hathaway (NYSE:BRKa), led by Warren Buffett, expanded its stake in Occidental Petroleum, reaching nearly a 29% ownership. The conglomerate acquired an additional 2.95 million shares, part of a total of 5.5 million shares purchased this month.
In terms of analyst ratings, Roth/MKM maintained a neutral stance on Occidental Petroleum, influenced by the company's relatively higher debt and lower projected long-term growth. Truist Securities downgraded the company's stock from Buy to Hold, citing less anticipated benefits from its CrownRock acquisition.
Recent developments also include Occidental Petroleum exceeding Q1 expectations with record production and significant cost reductions. The company plans to improve cash flow by over $1 billion and is focused on strengthening its balance sheet. Lastly, Occidental Petroleum was mentioned during former President Donald Trump's fundraising tour in Texas, where he garnered significant support from the energy sector.
InvestingPro Insights
As Occidental (NYSE: OXY) progresses towards the completion of its acquisition of CrownRock, L.P., investors are closely watching the company's financial stability and market performance. With a market capitalization of $56.51 billion and a P/E ratio of 19.43 based on the last twelve months as of Q1 2024, Occidental appears to be maintaining a strong position in the market. The company's stock has exhibited low price volatility, which might be appealing to investors seeking a stable investment in the energy sector.
In terms of shareholder returns, Occidental has a commendable track record, having maintained dividend payments for 51 consecutive years. This consistency, coupled with a dividend yield of 1.39% as of the latest data, reflects the company's commitment to providing value to its shareholders. Additionally, analysts predict that Occidental will remain profitable this year, which is supported by a gross profit margin of 59.58% over the last twelve months as of Q1 2024.
Investors can find more in-depth analyses and InvestingPro Tips on Occidental's financials and market performance by visiting https://www.investing.com/pro/OXY. For those interested in taking a deeper dive into the data, using the coupon code PRONEWS24 will secure up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription. With 5 additional InvestingPro Tips available, subscribers can gain a more nuanced understanding of Occidental's market prospects and financial health.
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