OXY - Occidental Petroleum Acquisition Progress Report

2024-03-15 16:08:29 ET

Summary

• Occidental Petroleum Corporation's acquisition of Anadarko has been criticized, but there is evidence of improvement in the performance of the acquisition.
• The company's Tier 1 acreage is increasing, making more well locations eligible for above-average profitable drilling.
• Occidental's cost reduction campaign is helping to keep costs rising slower than inflation.
• The continuing improvement of well performance shown by management helps to safeguard the acquisition benefits.
• The cash flow statement shows significantly better performance at lower prices.

Occidental Petroleum Corporation ( OXY ) made an acquisition a few years ago of Anadarko for which the company has been roundly criticized, mostly because what followed did not allow investors to see the benefit of the acquisition. Any time a large acquisition is made, the benefits often appear only over a period of years because all of the improvements usually apply to new production. Therefore, it takes time for investors to see such benefits because new production takes time to become significant....

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