FT复盘西方石油Anadarko并购遗留问题与新CEO去杠杆任务

Occidental tries to free itself from the messy legacy of Anadarko deal
The value of Occidental Petroleum gained $1bn in March on a single piece of news: chief executive Vicki Hollub was stepping down.
It was a brutal verdict on a tenure marked by one of the most notorious debt-fuelled deals in a shale sector that had become synonymous with capital destruction.
Shareholders blamed Hollub for bypassing them in 2019 when she outbid Chevron to clinch the $55bn hostile takeover of Anadarko Petroleum in one of the largest energy deals of the decade.
“Vicki is going to be one of the more polarising CEOs in recent memory,” said Mark Viviano, portfolio manager at private equity group Kimmeridge.
“There is a significant amount of value destruction that comes down to the reckless decision to acquire Anadarko.”
On Friday, Oxy’s shares traded for about $61 a share. The stock had plunged from $62 when it first made public its bid for Anadarko to less than $9 at its nadir in the pandemic, as the price of oil collapsed and put the heavily leveraged company with $39bn in debt on the brink of bankruptcy. The stock has returned just 18 per cent or about 2.3 per cent a year since it announced its bid.
For shareholders in one of America’s oldest oil companies, it has been a ride as wild and volatile as the driller’s globetrotting forays in countries such as Libya and the USSR.
The question now is whether new chief executive Richard Jackson can steady Oxy after the volatility of the Hollub years, finally shed its debt load and catch up with its peers.
“We are focused on execution and delivery from our advantaged resource position, and our ability to deliver on our $4bn-plus annual sustainable cash flow improvement plan is grounded in organic development,” Oxy said.
“We expect to generate significant free cash flow growth by 2030 and sustainable long-term value for our shareholders.”
Hollub’s extraordinary gamble with Warren Buffett’s Berkshire Hathaway, which bankrolled the 2019 deal, was met with opprobrium for being too expensive, too risky and only benefiting the Oracle of Omaha.
But Berkshire has not made out much better. While the sprawling $1.1tn insurance-to-investment conglomerate has generated sizeable returns on its $10bn preferred stock investment, Buffett’s decision to plough a further $14.4bn into Occidental common stock between 2022 and 2025 has sapped Berkshire’s returns.
Berkshire’s overall investment in Occidental has generated an internal rate of return of about 7.3 per cent over the past seven years, FT calculations show — subpar for the firm, according to investors.
“You can say clearly that capital would have been better invested in Apple,” Bill Stone, the chief investment officer of Glenview Trust, a Berkshire investor, said, referring to one of Berkshire’s most profitable trades in the iPhone maker.
“You can’t call it anything but disappointing.”
Buffett and Berkshire did not respond to a request for comment.
Making money in America’s prolific shale patch in the past 15 years has never been for the faint-hearted. Unlike conventional oil, shale wells deplete quickly, so producers must keep drilling ever more wells just to hold output steady. Producers borrowed from Wall Street to fund drilling binges or acquisitions. Hollub did both, earning her a reputation for recklessness.
As a result, Occidental has trailed larger rivals who focused more on shareholder returns than empire building. Shares of Exxon and Chevron have advanced more than 98 and 68 per cent respectively, while generating double-digit annualised total returns.
Dividends have offset Oxy’s decline, helping investors achieve a minimal positive return. Even so, the returns for common stockholders are dwarfed by Buffett’s take, given the added yield Berkshire earned from the $10bn preferred investment.
The preferred investment came straight out of Buffett’s classic playbook, providing expensive capital to companies in need, as he did with Goldman Sachs and General Electric during the financial crisis. Similarly, he stepped in to provide capital to Wrigley, Dow Chemical and Burger King to clinch their own acquisitions.
Christopher Bloomstran, the chief investment officer of Berkshire investor Semper Augustus, described the overall investment as “mediocre”.
“It has not been a home run yet,” he said.
Occidental “overpaid for Anadarko, contributing to the performance of the common [shares]. But the preferred has been a very good investment” for Berkshire.
Occidental’s excess cash is still going towards debt reduction and the eventual pay-off of Berkshire’s remaining $8.5bn preferred shares. In August, during its second-quarter results presentation, the company signalled that redeeming those shares was a priority once it could do so in 2029.
“If Vicki’s era was all about making ambitious decisions, this era has to be about resisting those decisions,” said Viviano.
Seven years after signing the deal with Buffett, Occidental’s balance sheet is nonetheless stronger.
The company’s principal debt is about $11.8bn, the lowest since the second quarter of 2019, reducing its interest costs significantly. However, it has had to divest major assets to cut that debt load.
In the first six months of the year, it generated $4.8bn of free cash flow from its continuing operations, before accounting for working capital. Analysts at credit rating agency S&P Global expect free cash flow will eclipse $10bn for the full year.
Separately, the Houston-based company reached a record of more than 1.4mn oil-equivalent barrels per day in the fourth quarter last year and its dividend has increased by half since 2023 to $0.28 per share. Exxon, the country’s biggest producer, pumped out 5mn oil-equivalent barrels per day in the same time period.
Through the Anadarko acquisition, Hollub dramatically repositioned the company to claim some of the largest acreage in the Permian, the shale heartland of the US. She increased that footprint with the 2024 acquisition of CrownRock for $12bn.
“I think she is a wildcatter and she took this risk,” said Michael Alfaro of Gallo Partners.
“She did the deal with Anadarko, which had great assets and was a very long-term view. But they did ignore factually the ability of the balance sheet to withstand such a huge acquisition in the near term.”
Investors have also questioned the economics of some of Hollub’s expensive carbon capture projects, including using carbon to boost well productivity.
“She was solely bailed out by the Russia-Ukraine war,” added Alfaro, “had that not happened the company would have been bankrupt”.
Hollub did not respond to a request for comment.
As the company focused on the US, it has worked to streamline its portfolio and reduce its leverage, selling LNG assets in Mozambique in 2019 and its chemicals business to Berkshire last year for nearly $10bn.
When the coronavirus pandemic hit in 2020 and caused oil prices to crash, Occidental slashed its common stock dividend while continuing to pay Buffett.
Occidental was the only oil and gas producer that had no cash return in place of dividends because everything was going to pay down that debt, said Betty Jiang, an analyst at Barclays.
Yet investors have been showing more interest in the stock as the company has moved closer to hitting its debt target of $10bn and the cash position it needs to pay off the Berkshire preferred shares in 2029, said Jiang.
“They are back on the table of investable energy equities for investors in my conversations,” said Jiang.
Occidental has promising opportunities in the Middle East, with ongoing exploration in Oman and Algeria and improving techniques to increase recovery in the Gulf of America.
Exploiting those opportunities now falls to Jackson, Occidental’s former chief operating officer who was overseeing Permian operations as well as the company’s carbon capture business, and who took over from Hollub in June.
“As we consider future reinvestment for growth, we appreciate we have a deep inventory of advantaged, well-understood resources for low-cost development,” said Jackson during the August second-quarter results call. “However, when we invest for growth, we want to be thoughtful.”
His promotion has been seen by analysts as a sign the company will continue to focus on streamlining its debt and operations.
“Vicki was there to transform the company, Richard is now taking over as chief executive to really maintain discipline and to steer the ship for shareholders,” said James West, head of energy and power at Melius Research.
“It’s not like they are running around the world drilling exploration wells,” he added. “They want to be a boring dividend-growth story.”
Valuing Berkshire’s investment in Occidental: the methodology
The FT estimated Berkshire Hathaway’s annualised return on its investment in Occidental Petroleum using a money-weighted internal rate of return (IRR) from August 8 2019 to August 7 2026. The IRR accounts for both the amount and timing of every investment, dividend, redemption and remaining asset value, treating the preferred stock, common stock and warrants as a single investment.
The calculations include the $10bn Berkshire spent on the preferred stock in 2019, as well as the $800mn the company earned each year before Occidental began redeeming the preferred stock at a 10 per cent premium. That reduced preferred stock dividends to roughly $680mn a year. The remaining $8.5bn preferred stock is valued with a 105 per cent liquidation value, reflecting the premium Occidental must pay to retire the stock. The remaining value does not assume pre-2029 redemptions of preferred stock.
The calculations also include the $14.4bn Berkshire spent accumulating its 26.5 per cent position in Occidental between 2022 and 2025, and the cash dividends Berkshire received for that ownership stake. The FT estimates the value of the stake was worth $14.8bn, based on Occidental’s stock price on August 7 2026.
The FT used a Black-Scholes model to value the 83.9mn warrants Berkshire owns, which are exercisable for one year after the preferred stock is fully redeemed.
The valuation does not include Berkshire’s transaction costs to purchase Occidental common stock.