Skip to comments.Oxy to spinoff California business
Posted on 02/14/2014 12:53:08 PM PST by thackney
Occidental Petroleum Corp.s board has authorized the separation of its California assets into an independent and separately traded company.
The news comes just a day after Oxy reported plans to sell its Hugoton field assets to an undisclosed buyer for $1.4 billion as part of the companys strategic review (OGJ Online, Feb. 13, 2014).
The newly formed company will hold 2.3 million net acres in California, including major operations in Los Angeles, San Joaquin, Ventura, and Sacramento (OGJ Online, July 23, 2009; Feb. 23, 2010; May 21, 2010).
The California business in 2013 earned $1.5 billion on a pretax basis. Earnings before income, taxes, depreciation, and amortization were $2.6 billion with capital expenditures of $1.7 billion. Capital expenditures planned for this year were increased to $2.1 billion.
Oxy said it will determine management and governance of the California business by the third quarter and complete the separation by yearend or early 2015. Oxy, previously based in Los Angeles, will move its headquarters to Houston, maintaining exploration and production operations in the Permian basin and other parts of Texas, the Middle East region, and Colombia. The company will continue to operate its midstream and marketing segment along with chemical subsidiary OxyChem.
Stephen I. Chazen, Oxy president and chief executive officer, a position he has held since 2011, will remain in the position through 2016 (OGJ Online, Oct. 14, 2010).
Does Al Gore still own a big chunk of Occidental Petroleum?
Spinning out California would be a big shift for the company, which is the largest holder of oil and gas acreage in the state, with more than 2.1 million acres. The state accounts for a third of Oxys U.S. production roughly 89,000 barrels of oil a day and 260 million cubic feet of natural gas a day.
Whoops wrong link for the acres and production news source
V.P. Gore had previously controlled between $250,000 and $500,000 of Occidental stock throughout his terms of office. He claimed that he was merely acting as executor of a trust that would go to his mother, but revert to him after her death. After the Elk Hills sale, Gore began disclosing between $500,000 and $1 million of his significantly more valuable stock.
Is Elk Hills included in this?
Sorry, I see that the article says “San Joaquin”, so it is included.
Shell and Mobil had done the same thing a few years back. I thought they were going to divest themselves of it, but they still hold it.
Aren’t they spinning off the big oil fields up by Bakersfield and that area? Isn’t this where fracking is just starting up? There will be a lot of $ there. Hmm.
IIRC, he sold it way back. Now he may want to buy it back, seeing that his other scams are failing.................
Perhaps they know a bit more about the Monterey Shale than they wish they did.
Shell and Mobil set up a company that owns all of their California properties. But they have not divested themselves of it, years later they still own it. They let it operate independently but my impression is that as of recently they are starting to take increased interest.
I do get the impression that, despite purported public opposition to frac’ing, they are about to go forward.
I’m wondering about Oxy, if they are planning to divest themselves, or if there is a legal reason to insulate the company from their California operations. Too hard for my brain to figure out.
Fracking is definitely going forward in California. Geologist husband suggests Oxy is moving headquarters from Los Angeles to Texas due to tax laws, so that only this part of the company will be taxed by CA. It’s a big blow to the state, as they have been a huge employer. Fracking has already been signed in by Governor Jerry Moonbeam/ and it will go forward.
Exxon Mobile is building a HUGE office complex near The Woodlands (north of Houston) and closing their Fairfax, VA offices. The place looks like a small college campus. I’m sorry for the loss of jobs in California but maybe someday government will wake up and see why they are leaving.
Well, wouldn’t YOU take your business out of California and go to Texas? They are nuts in Sacramento, leading the charge off the cliff.
The idea is to move more liberals to Texas.