Research

OXY – Market expectations are profitability to remain muted, but management is excited about the EOR business and confident about their debt position and M&A

September 30, 2020
  • Occidental Petroleum Corporation (OXY:USA) currently trades at a discount to UAFRS-based (Uniform) assets, with a 0.8x Uniform P/B. At these levels, the market has expectations for profitability to remain muted, but management is excited about the Enhanced Oil Recovery (EOR) business and confident about how they are handling M&A and debt maturities
  • Specifically, management generated an excitement marker when saying that the Enhanced Oil Recovery (EOR business) is going to be critically important for them in the future. Also, they are confident in their ability to restart operation in the Gulf of Mexico, that Algeria’s asset and depositional environment is a core area of the business, and that they are managing 2021 and 2022 maturities. In addition, they are confident in their acquisition and divestiture of assets