Thread regarding Anadarko Petroleum Corp. layoffs

Denver office is toast

Occidental offered about 200,000 acres in the Denver-Julesburg Basin in Wyoming and Colorado that produce $66 million a year in cash flow, mostly in mineral royalties......
Reuters 11/11/2019

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| 4008 views | | 13 replies (last )
Post ID: @OP+11YjoVKY

13 replies (most recent on top)

@11YjoVKY-9yva, the preferred stock is water under the bridge, that ship has sailed. Buffet recently bought 750,000 additional shares of common stock. Probably because common stock currently has a dividend yield greater than what he got on his preferred shares. You are somewhat right about it being more debt because it’s like debt but in the form of dividend payments on common stock. Oxy is paying ~2.5B in annual dividend payments. DJ will not be sold, Denver office is not closing. Oxy could not afford to acquire Anadarko and all of its debt for the Permian alone.

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Post ID: @9kel+11YjoVKY

Oxy may very well be looking at selling DJ, but it will never sell for what it's worth from a FCF perspective. The stigma and uncertainty around Colorado will give most buyers pause. Noble doesn't have the money, and the big boys don't seem to be interested in operating there. Oxy could piecemeal it off to smaller operators, but that won't be at a strong price. I'm not saying Oxy won't sell it, because they are pretty desperate for cash (just look at how cheaply they sold Mozambique to Total for), but they won't generate the same value out of a sale that they have with it as a producing asset from a cash flow perspective.

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Post ID: @9zeq+11YjoVKY

Buffet money is just more debt, and expensive debt at that. Oxy has to pay down debt and you better believe that they are looking at the DJ.

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Post ID: @9yva+11YjoVKY

Not likely. FCF is key to the OXY portfolio. You must be one of the ones that was too dumb to take VSP. If they really need a large amount of cash, what do you think would be the most likely way to get it? Warren Buffett invested more because he knows the assets OXY acquired are worth it. Stock price would suffer but dividend would be cut before the DJ is sold.

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Post ID: @9ker+11YjoVKY

Oxy is going to have to sell some core assets in order to meet their debt reduction target. Likely the DJ, because they won’t sell the Permian. The Denver office IS toast.

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Post ID: @9afw+11YjoVKY

Oxy should do the same with the geologists. It’ll be a long time before we need the E in E&P again. Targeting 50% ROR because Oxy has many options for capital allocation. WES is history. Colorado and Wyoming assets for sale are non-core.

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Post ID: @9hto+11YjoVKY

Noble does not have the money to buy a burrito. Five years ago they had 25-30 Geologists in Denver. Now they are down to three, maybe four.

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Post ID: @9kms+11YjoVKY

Like Oxy, Noble is unprofitable and has huge debt.

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Post ID: @9lqr+11YjoVKY

Noble should buy the acreage!

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Post ID: @9xoi+11YjoVKY

Natural Buttes now up for sale

https://finance.yahoo.com/news/occidental-petroleum-stepping-oil-gas-225056596.html

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Post ID: @3fdx+11YjoVKY

DJ Basin is a cash cow and PRB is just about the last place in the Rockies for an early-entry, repeatable oil play. They'd be stupid to shed these assets, but based on how Oxy is handling this whole thing, I wouldn't be surprised if they put all their eggs in one basket and dump the DJ and PRB.

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Post ID: @1qwb+11YjoVKY

Just wait. Good luck. They’re getting destroyed for defunding Permian. Going to sell off Powder and DJ ASAP. Just waiting for prices to rise to get decent valuation

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Post ID: @1xms+11YjoVKY

They are not selling all of the acreage. The Denver office is not closing.

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Post ID: @ouj+11YjoVKY

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