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David Messler

David Messler

Mr. Messler is an oilfield veteran, recently retired from a major service company. During his thirty-eight year career he worked on six-continents in field and…

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What The Market Is Overlooking In The Occidental Deal

Oil

Occidental Petroleum, (NYSE: OXY), lit up the Permian sky, with its mid-April announcement that it was going to call and raise Chevron’s (NYSE:CVX) bid for Anadarko Petroleum, (NYSE: APC).

Almost immediately two things began to happen. First, the stocks of both companies sank, big. They kept sinking proportionately until the news broke at the end of April that OXY Gulfstream jet had been spotted in Omaha, where the CEO, Vicki Hollub had paid a visit to the Oracle. Ms. Hollub must have made a convincing pitch, as she came away with a big $10 bn financial commitment. Chevron stock immediately reversed course, with a 5 percent gain, attenuating this substantially though as the market fretted it would meet and raise OXY. As we now know that didn’t happen, and CVX has resumed its upward march.

(Click to enlarge)

In this article, we will focus on one of the primary aspects of the OXY/APC deal that haven’t been properly considered by the market. OXY is going to do more with the assets held by Anadarko, and that will create value for shareholders.

And, finally, I will discuss some of the additional assets that OXY might shed to pare down the debt overhang created by the acquisition.

OXY a better aggregator of APC's assets than…





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