Occidental Petroleum Corp.’s board has authorized the separation of its California assets into an independent and separately traded company.
The news comes just a day after Oxy reported plans to sell its Hugoton field assets to an undisclosed buyer for $1.4 billion as part of the company’s strategic review (OGJ Online, Feb. 13, 2014).
The newly formed company will hold 2.3 million net acres in California, including major operations in Los Angeles, San Joaquin, Ventura, and Sacramento (OGJ Online, July 23, 2009; Feb. 23, 2010; May 21, 2010).
The California business in 2013 earned $1.5 billion on a pretax basis. Earnings before income, taxes, depreciation, and amortization were $2.6 billion with capital expenditures of $1.7 billion. Capital expenditures planned for this year were increased to $2.1 billion.
Oxy said it will determine management and governance of the California business by the third quarter and complete the separation by yearend or early 2015.
Oxy, previously based in Los Angeles, will move its headquarters to Houston, maintaining exploration and production operations in the Permian basin and other parts of Texas, the Middle East region, and Colombia. The company will continue to operate its midstream and marketing segment along with chemical subsidiary OxyChem.
Stephen I. Chazen, Oxy president and chief executive officer since 2011, will remain in the position through 2016 (OGJ Online, Oct. 14, 2010).
