Occidental Petroleum expects oil and gas output to dip in the second half of the year and will not boost production until it 'significantly' reduces debt, Chief Executive Vicki Hollub said on Tuesday.
- Occidental Petroleum expects oil and gas output to dip in the second half of the year and will not boost production until it “significantly” reduces debt, Chief Executive Vicki Hollub said on Tuesday.
The company has been struggling with debt taken on during its $38 billion acquisition of Anadarko Petroleum last year, an ill-timed bet on oil prices rising. The production outlook “does not inspire confidence in capital efficiency” or in the ability to “meet sustaining capital requirements next year,” Mizuho Securities USA analyst Vincent Lovaglio said, adding that Occidental needs to finalize a major asset sale.
It has about $4.5 billion in notes due next year and reported long-term debt of $36 billion on June 30. Warren Buffett’s Berkshire Hathaway holds about $9.7 billion in Occidental preferred shares that pay a dividend of about 8%.
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