What makes you believe OXY will buy SD? Is it because they had dealings before?
Before their last quarter (which was good) there were signs of activism growing with OXY over their chemical business. OXY seems to be more interested in the Permian and its EOR program than the Miss Lime. Maybe I am missing something though.
Oxy won't use their shares as currency here, that would really stir up a hornets nest among their shareholders. Oxy is facing some of "activist shareholder" problems of their own. The only way to do a deal on SD would be to use cash and debt. That would be possible for Oxy to do if they sold-off some of their international holdings first, something the activist have been pushing for (separate domestic from international business).