Hopefully she also believes that today's price of OXY stock is attractive (at an enterprise value/proven reserves of $27/boe) since she's repurchasing stock. Maybe Hollub is unable to find anyone willing to sell her reserves at $27/boe. Either that, or she's taking the short view, not the long view.


I don't know what the answer to your question is, but I prefer the short view, or at least, the medium view, not the long view. Occidental has a $57b market cap, at today's price of $63/share. If Hollub can keep capex at minimal levels and deliver $13.3b in good years like last year, with $3.8b in capex, and maybe juice that a bit by eliminating all new drilling (not all capex, of course; you need some spending just to replace equipment), and cut even farther back on production in years when the oil price languishes, not worrying too much about declining barrels of production, that sounds like a strategy that might rapidly make this investment very profitable. And if a bunch of companies do the same, they will all enjoy higher prices. And even the global warming worriers will be happy, since higher prices will speed the transition to renewables, making them competitive earlier.

I would be happy to own shares in a modern-day equivalent of Philip Morris, raking in profits from a slowly dying, but very profitable business.

dtb