|Bid||20.65 x 1300|
|Ask||21.49 x 1300|
|Day's range||20.56 - 21.28|
|52-week range||17.46 - 35.75|
|Beta (5Y monthly)||1.34|
|PE ratio (TTM)||13.34|
|Earnings date||11 Feb 2020 - 16 Feb 2020|
|Forward dividend & yield||2.48 (11.73%)|
|Ex-dividend date||29 Oct 2019|
|1y target est||25.73|
(Bloomberg Opinion) -- Occidental Petroleum Corp.’s swing from aggressive offense to deep defense has taken about six months. In May, it elbowed aside much bigger Chevron Corp. to capture Anadarko Petroleum Corp. On Tuesday, it laid out plans to cope with the aftermath.The messiness of Oxy’s third-quarter results, the first to include Anadarko, was their saving grace. Earnings missed consensus estimates by a mile, but the panoply of moving parts, including merger expenses, makes the number almost meaningless. Far more important is Oxy’s plan for 2020, which can be summed up in one word: austerity.The company took the unusual step of providing details about spending plans for next year, something it normally saves for the fourth-quarter call. There is a simple reason for this: The stock yielded north of 7% for much of the period since the Anadarko deal closed in early August. There is a fine line between a yield that looks unusually attractive and one that just looks unsustainable, and Oxy has been walking it.So while the mantra of favoring free cash flow over growth can be heard pretty much everywhere in the oil business these days, Oxy is shouting it a little louder. Analysts were forecasting capital expenditure of $7.5 billion in 2020, according to figures compiled by Bloomberg. Oxy’s target is at least $2 billion lower than that, a figure that happens to cover three quarters of the annualized dividend payment.Lower capex comes with a catch: guidance for production growth in 2020 is now set at 2% compared with the 5% target mentioned during the Anadarko pursuit. That said, the budget still implies a productivity gain of roughly 16% compared with the consensus forecast, assuming the latter includes capex for Western Midstream Partners LP; Oxy’s budget does not. Such synergies are, of course, the basis of Oxy’s argument for buying Anadarko in the first place, and much of Tuesday’s call was taken up with emphasizing early realizations of those and further benefits to come. As has been the case with many other E&P acquirers in the past year or so, however, Oxy isn’t getting the benefit of the doubt. As of lunchtime Tuesday in New York, the stock was down almost 6%, making it the worst performer of any size in the sector apart from Chesapeake Energy Corp. — which trumped everyone with a going-concern warning.The fact remains that Oxy stretched itself enormously to win Anadarko just as the outlook for oil soured. In doing so, it also took on high-priced financing from Warren Buffett that looks set to swallow 40% of the current value of the deal’s cost savings (see the math here). Payments on Buffett’s preferred stock took almost half of Oxy’s adjusted net income in the third quarter. Having begun the year trumpeting reasonable growth balanced with high payouts, Oxy now offers low growth to protect payouts.In short, having hurt its credibility with investors, Oxy still has a lot to prove in winning it back. And as next year’s guidance shows, that finely balanced dividend yield will have to do much of the work in the meantime.To contact the author of this story: Liam Denning at firstname.lastname@example.orgTo contact the editor responsible for this story: Daniel Niemi at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Liam Denning is a Bloomberg Opinion columnist covering energy, mining and commodities. He previously was editor of the Wall Street Journal's Heard on the Street column and wrote for the Financial Times' Lex column. He was also an investment banker.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
NextEra Energy Partners' (NEP) decision to acquire Meade Pipeline will enable it to enjoy the benefits from rising demand for the transportation of natural gas in the Central Penn Line.
Owing to volume growth demanded by the shippers during a July open season, Magellan Midstream Partners (MMP) decides to expand the size of its Saddlehorn pipeline by 100,000 bpd.
Being one of the largest motor fuel distributors in the wholesale market in terms of volume, Sunoco (SUN) is likely to maintain share price momentum on the back of multiple tailwinds.
(Bloomberg Opinion) -- That Carl Icahn: Give him an inch and he’ll take four board seats. Try to, anyway.Late on Wednesday, the veteran corporate gadfly filed a preliminary proxy statement on Occidental Petroleum Corp. He wants to gather together a fifth of the company’s stockholders of record to force the board to fix a date to determine who can participate in a consent solicitation, akin to a virtual shareholder meeting. Get that done, and Icahn wants to nominate four new directors and ease what he regards as onerous by-laws that make it hard for shareholders to shake things up at Oxy.Icahn’s beef with Oxy is that it overpaid for Anadarko Petroleum Corp. and took expensive financing from Warren Buffett in order to avoid letting its own shareholders have a say. He has a point. Oxy raised its bid (against itself) when Brent crude was still above $70 a barrel, and taking Berkshire Hathaway Inc.’s $10 billion was aimed squarely at avoiding a vote by Oxy’s own investors. In that context, even the opener to Oxy’s boilerplate response to Icahn’s filing rings a little hollow:We maintain an open dialogue with all our shareholders and welcome constructive input toward our shared goal of maximizing long-term value. Icahn’s real opening, however, is what the Anadarko saga has done to Oxy’s stock, the worst-performing large-cap U.S. oil and gas producer this year. Relative to the Energy Select Sector SPDR Fund, Oxy is down about 19% since April 11, just before Chevron Corp.’s rival offer for Anadarko became public. That translates to more than $9 billion of value lost because of a deal touting billions in annual synergies:Worse, Chevron’s discipline, in keeping with the investor zeitgeist, has been rewarded: Its value has risen by more than $10 billion in relative terms. Whether or not Icahn can pull off his tricky maneuver against the board, his presence and special brand of rhetoric will keep the spotlight on all this. Oxy is rumored to be marketing some of Anadarko’s stake in its pipelines business, Western Midstream Partners LP, which would let it realize some cash and deconsolidate the subsidiary’s debt. Given the relative complexity of the deal – reportedly selling part of a stake in a listed entity – and Oxy’s clear motivation to reduce its pro-forma leverage, the company will have its work cut out to realize full value. Not doing so, however, would add to the sense that winning Anadarko has exacted a heavy cost in capital terms. And one motivated shareholder, in particular, will be watching very closely.To contact the author of this story: Liam Denning at firstname.lastname@example.orgTo contact the editor responsible for this story: Mark Gongloff at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Liam Denning is a Bloomberg Opinion columnist covering energy, mining and commodities. He previously was editor of the Wall Street Journal's Heard on the Street column and wrote for the Financial Times' Lex column. He was also an investment banker.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
A Surprise Megadeal: Chevron to Acquire Anadarko(Continued from Prior Part)Anadarko acquisitionChevron (CVX) has agreed to acquire Anadarko (APC) in a cash and equity deal. The transaction is expected to close in H2 2019, subject to requisite
Five MLPs with Strong Total Return Potential(Continued from Prior Part)Western Midstream PartnersWestern Midstream Partners (WES) offers a solid potential upside of more than 30% compared to its current market price of $31.85. Analysts have
Home improvement retailer Kingfisher is parting company with Chief Executive Véronique Laury after it reported a 13 percent fall in annual profit, more than halfway through a five-year transformation plan that was designed to boost earnings. The group, whose main businesses are B&Q and Screwfix in Britain and Castorama and Brico Depot in France and elsewhere, has just entered the fourth year of a five-year programme that aimed to raise annual profit by 500 million pounds ($663 million) from 2021. Kingfisher said on Wednesday that separating out the 500 million pound targeted profit improvement from the rest of the business no longer reflected how it is managed -- effectively an abandonment of the target.
With its simplification transaction complete, the newly named Western Midstream Partners looks like a compelling option for income-seeking investors.
Energy Sector Highlights Last Week(Continued from Prior Part)Energy stocks In the week ending March 15, upstream stock Laredo Petroleum (LPI) fell the most among the energy stocks under review in this series, which include the following ETFs: the