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'There won't be significant growth from us because there's still a lot more value to be gained for us by continuing to focus on delivering value to shareholders through share repurchases,' Hollub said during an interview with Bloomberg TV at the Smead Investor Oasis conference in Scottsdale, Arizona. 'A big focus for us in 2023 is repurchasing our common and potentially the preferred.'

https://www.chron.com/business/oil/article/occiden...

The whole interview with OXY CEO, well worth viewing.

https://www.bloomberg.com/news/videos/2023-02-06/o...

A big focus for us in 2023 is repurchasing our common and potentially the preferred

A quick note on why she says "and potentially the preferred" since that is obviously Berkshire's preferred shares she is talking about and a lot of people seem to think she has the option of paying off Berkshire if she wants to and saving that $800 million bucks annually.

The Berkshire preferred shares can only be redeemed under certain circumstances before 2029 (in 2029 it can be redeemed at 105% of face value). Before 2029, OXY has to partially redeem some of Berkshire's preferred shares after the capital return to common shareholders (dividends plus common share repurchases) for the trailing twelve months exceeds $4.00 / common share. After $4.00 / common share of capital return to the common shareholders is hit, the capital return is split 50-50 with (mandatory) preferred share redemption at 110% of face value.

Here is an excerpt from a post I made back in November so it hasn't been adjusted for any more-recent OXY common share count since then (and this was a hypothetical for 2023):

The first $3.6 Billion of capital return can go entirely to common shareholders. Everything above that gets split 50-50 with the pref. redemption (redeemed at a 10% premium to face). If you think they will return $10 Billion total to shareholders next year, they could redeem something like $2.9 Billion worth of the BRK preferred using $3.2 Billion of cash.

Link to an interview with Vicki Hollub on Yahoo at Smead conference yesterday.

OXY has 10-15 years of high return drilling inventory in the Permian. Then decades of CO2 EOR production after that from conventional and unconventional reservoirs. Discusses "net zero" oil and jet fuel (United Airlines has interest). Over the long term OXY will transition to a CO2 management - direct air capture -(DAC) company which according to Hollub, does not mean oil and gas production will decline. Rather, she says production will increase as OXY helps others to capture and store their CO2. That incremental CO2 EOR "net zero" oil will command a premium to WTI. She walks through a high level DAC value proposition. Paul Sankey (Sankey Research) apparently puts a $25/share value on OXY's DAC business.

Interviewer asks Vicki about the ultimate outcome for OXY. Stand alone company, Berkshire buyout, or take out by a Major? She says "nothing is off the table".

Vicki will apparently attend the Berkshire annual meeting in Omaha this year.

https://www.yahoo.com/now/occidental-ceo-share-rep...

The first $3.6 Billion of capital return can go entirely to common shareholders. Everything above that gets split 50-50 with the pref. redemption (redeemed at a 10% premium to face).
If you think they will return $10 Billion total to shareholders next year, they could redeem something like $2.9 Billion worth of the BRK preferred using $3.2 Billion of cash.

Two comments

(1) Thank you so much for this summary
(2) Memo to self: never sit on the other side of a negotiating table with Mr Buffett

Jim

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