No. of Recommendations: 6
I thought a couple of points in the earnings call were noteworthy.
There won't be any preferred shares redemption for a while until they step up repurchases. I like their repurchase discipline as well; i.e. do it with excess cash flow from high O&G prices.
As of November 7th, rolling 12-month common share distributions totaled $3.12, falling below the $4 preferred equity redemption trigger. It is unlikely that cumulative distributions to common shareholders will be above the $4 per share trigger again this year, primarily due to the concentration of share repurchases in the second half of 2022. However, we remain committed to the per share earnings and cash flow accretion benefits derived from our share repurchase program and we intend to continue repurchasing shares at a pace that is largely driven by commodity prices.
Vicki's response to the question on M&A was music to my ears. I am sure Buffett would laud her discipline as well.
Nitin Kumar
I want to start Vicki with the topic du jour in the industry M&A. I know Oxy has a deep bench of inventory that you highlight. But obviously with some deals out there recently, there's been a focus on consolidation. Just wanted to get your thoughts on how you see Oxy fitting into that trend going forward?
Vicki Hollub
Well, Nitin, I do want to reiterate that we were early consolidators in our industry with the Anadarko acquisition, and we did that because we saw significant synergies there, and those were obvious to us. And they were in -- the acreage was in an area that made it possible for us to understand the subsurface and to gain those synergies.
Now that we've done that, we more than doubled our production with that acquisition. We've more than achieved the $2 billion of synergies that we had forecast, and now it's considerably strengthened where we are today. So the good thing is we don't have to do acquisitions. Therefore, while our BD group keeps up with and is aware of what's happening in our industry, we feel no need to have to do anything or be a part of it.
seekingalpha.com - Occidental petroleum corporation oxy q3 earnings call transcriptI wish Pfizer's management was as disciplined in using COVID windfall on share purchases instead of blowing it on expensive M&A.
