Artikel vom 14.03.2020 (bei WTI Preis 32/33 $)
"Occidental Petroleum has seen its stock price drop by more than 85% since mid-2018 on the back of what was arguably the worst acquisition of all time with Anadarko. The company has been forced to cut its dividend from $0.79 to $0.11 / quarter and cut its capital spending by ~$1.3 billion annually below its breakeven rates.
However, the company's new breakeven is "in the low $30s / barrel WTI" not counting the company's hedges. The company's hedges, through a three-way cost less collar to add $10 / barrel for 300,000 barrels / day in production in 2020. Across the company's entire production that's nearly $3 / barrel above current prices from the hedging.
That's perfect because it means the company's actual WTI breakeven is ~$28-29 / barrel WTI or ~$3-4 / barrel (~10%) below current prices. The company has significant debt, but it also has room to cut its dividend further if needed (saving ~$500 million annually if it chooses too or ~$1.5/ barrel). So the company has the financial strength to breakeven at current prices, which means while shareholder rewards won’t be there, it could weather a long oil crisis.
Last, it was worth noting that previously, at $40 / barrel WTI, Occidental Petroleum was breaking even with its old dividend. At $50 / barrel WTI it could increase production. But with its old dividend at almost 30% based on current prices, and the company able to cover that at $40 / barrel WTI, that means even with a slight recovery in oil prices in 12 months, the company could generate significant shareholder rewards. Remember, we’re expecting $55 WTI by second half 2020."
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