Which do you think Oxy will sell? Oxy said they were keeping GOM, but lately the workers there have had their doubts.
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WES is gone. All employees that are dispensable are being transferred to WES. This is another way for Oxy to hit target head counts.
Selling WES is straightforward it is an existing company with identified assets that have contracts in had. The infrastructure is new and first class unlike the pump n dumps common in the industry. Any financial guy can figure the rate of return, WES just needs a staff. The downside on the valuation is assigning over under forecasts on future production as big brother is no longer directly tied to your financial well-being. GOM has to be much more attractive because sunk costs are already covered and the production is conventional
If buyers are smelling blood they are going to be pressing for a deal trying to Get the highest rate of return first. Stay tuned it’ll get more interesting everybody is playing the cards they are holding and what has been flopped on the table.
WES is tied to E&P at the hip. While possible with infrastructure upgrades to split (e.g. meters) it is also a MLP that then makes partial sales complicated. My guess is the discussion and market expectation for sale have taken a toll on share price.
Which then raises the second question? Is it worth to sale WES now at firesale prices? Could you just drop a small percentage to take the debt off OXY’s books and move on?
What about Algeria and difficulties with government to accept the return of France?
Should you then sell GOM as a whole or partial to cover your divestiture target and in process reduce personnel? Algeria is run by locals with a small expat team supported by Houston. Balance the oil loss in your books, make the money and unload more people.
What happened by the way with the Oxy liar jet flight to Holland? Just sightseeing and dinner with our Shell friends?