Since the low in December 2012 about 15 or so months ago, OXY is up 31%. A lot of the rise is based on expected restructuring, which is going slow because of the fiefdom that was the structure that this company took. I think a lot if the current run up is that they are drilling much more efficiently. It is going to take at least the rest of the year to sort things out.
how much of a risk does the drought in california pose to getting a good valuation for oxy's spinoff?
we already know the state is tough, from a regulation point of view.
The real question is why the heck did they ever buy this turkey to begin with? Wait Irani was involved. Explains everything.
Andrew Hall hits the energy lotto in 2009 he is referred to as a "God." Over the past three years he has a net loss. Oxy needs to spin this loser off to anyone dumb enough to buy into the fairy tale.
The biggest problem here is that PXD is a $26 billion company. They do not pay a dividend and are set up to drill, drill, drill. This is exactly the reason OXY is spinning off California into a separate company. It does not support the return to shareholder proposition that OXY intends on pursuing. They want growth in Production and reserves, but not at the expense of not being able to increase the dividend every year and buy back stock when prudent. Chazen talked about this at length in the last conference call.
getting smaller and focused. Irani did something similar by dumping the #$%$ Hammer accumulated - Island Creek, Midcon, IPB beef, horses, hotels, and even hybrid rice to focus on international and domestic. Irani with the help of Gore got Elk Hills done. However over time Irani lost vision (IMO) coupled with shareholders and others suit to oust Mr Big bucks and in comes Chazen. a money man of sorts who also helped shape Irani and get the co's total debt reduced. Chazen has a different vision - splitting and selling assets including that total failure (IMO) Phibro...clearly he's listening to WS....is there a bigger plan who knows...a complete sell or spin off of what's left...maybe separate chemicals...who knows....I'm sure it will be good for a few years and maybe just maybe we get that 120/sh price
NG has shot up in price from $3.60 to $6.06 in just the last 2 and one half months. It may be due for a pullback after this cold winter, but there will always be long/hot summers, cold winters, and more usages found to increase demand for NG.
They are doing an excellent job of repositioning themselves for the future using a sound strategy, shedding of less desirable assets and those in unstable areas of the world. In order to replace a depleting resource they are forward looking in how to grow the company in a way that fits their goals. If a stronger/safer location for production is in the US, PXD's TX acreage under lease with it's known and potential reserves would fit that goal and work with the large position OXY already has in TX. It is just a speculative idea.
no, i believe they're going to reduce their hedging/trading activity, perhaps showing Andy and Phibro the door.