https://www.ft.com/video/d2bdb8c4-fc12-4eb2-83ff-ee2c27ed80e9
Hate to say it but the video is 100% right. OXY is going down the drain fast.
6 replies (most recent on top)
Maybe they got paid to make this as a teaching resource to go along with the case studies that students have to do on this deal. It has that educational resource look.
I’m still trying to understand the driver behind this video that had no new relevance. Not that it was wrong but it’s old news and someone was late to the party with their animation.
Funny you said “the place to hire leftovers”. Not accurate but almost. We sent back bad performers to COP and KMI. Otherwise we got clever folks from XOM, CVX, Shell and BO that thought they were superior to LOXY and brought unnecessary processes and costly way to operate. Off course we got the Apache dignitaries who added flame to all of this.
Last year, Vicky Hollub pulled off one of the biggest coups in the history of big oil. But just months later, the CEO of Houston-based Occidental Petroleum was scrambling to save her job and her company. The $55 billion acquisition of Anadarko Petroleum was a remarkable victory for Hollub. Not only did she gate crash a planned deal by larger rival, Chevron, but the Occi boss brought Warren Buffett's Berkshire Hathaway to the party as an investor to help pay for the mega deal. Not invited were Occi shareholders, including the feared activist raider, Carl Icahn, who didn't get to vote on the deal thanks to how the deal was structured.
But victory did not come cheap. Occi's debt soared to $43.9 billion, or six times higher the level it was just a year prior. Then came the twin pressures of COVID-19 and the price war between Russia and Saudi Arabia. The oil price crash emboldened Carl Icahn who built his stake to over 10% of the company's shares. In a desperate move, Hollub introduced a poison pill to stop Icahn from taking over the company. Poison pill allows a firm to issue new shares, which they loot an unwanted suitor stake in the company.
Hollub also broke her biggest promise to investors, she slashed the dividend almost 90%, the first payout cut in three decades. To preserve cash, Occi recut its deal with Buffett, giving him shares in the company in lieu of promised cash payments. Finally, Icahn made his move, gaining four seats on Occi's 11-person board. As markets and the oil price recovered, Occi's share prices recouped some of its losses, but it sits far below where it was before the Anadarko deal. And that is why Hollub's big deal backfired.
The minute CVX walked away from the negotiation with $1B; lOxy has been laughed at.
Before that, Oxy has been known as the place to hire leftovers and can't cut its. Very rarely did you lose a good worker to Oxy... instead, thats where they would land if you let them go. And when you don't lay off poor performers, like Oxy so proudly exclaimed, your culture and work become poor as well. Eventually, the poor culture just stinks so bad externally, no one will want to come work for you.
Its true. Nobody said I want to go work for a 3rd tier company that doesn't pay well and expects me to kiss the behind of a manager to get ahead.
Oxy the joke of industry 2019 2021