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Warren Buffett’s Berkshire Hathaway bought another batch of shares in Occidental Petroleum, raising its stake in the company further.
At a total of $352 million, the 5.99 million shares have boosted Berkshire’s stake in Oxy to 20.9 percent, Reuters reported, citing a regulatory filing. The stake is worth some $11.9 billion based on Oxy’s closing price last Friday.
Berkshire Hathaway has been buying shares in Occidental consistently this year, prompting suggestions it planned to take over the company. In August, the Wall Street Journal reported, citing unnamed sources close to the investment firm, that it did not have plans to take Oxy private even though it had been granted approval to buy up to 50 percent of its stock.
U.S. regulators approved Berkshire Hathaway’s option to purchase up to 50 percent of the common stock in Occidental Petroleum in mid-August. The regulatory filing submitted by FERC at the time showed that Berkshire Hathaway held an 18.72-percent stake in Occidental as of July 22. It had requested approval to purchase up to 50 percent of the common stick in secondary market transactions.
Berkshire Hathaway funded Oxy’s takeover of Anadarko three years ago, receiving stock purchase warrants to acquire 20 percent or more in Oxy in exchange for its cash injection of $10 billion. Oxy took over Anadarko in a deal worth $55 billion in 2019 in what was one of the biggest merger and acquisition deals in energy over the last few years.
Oxy booked an attributable profit of $3.2 billion for the second quarter of this year, up from $2.1 billion for the first quarter. It also reported the highest quarterly free cash flow in its history, at $4.2 billion, and debt of $4.8 billion, benefiting from the rebound in oil demand and the consequent rally in oil prices.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com