OXY Dividend Increase to Pour More Money Into Berkshire’s Coffers

(BRK.A), (BRK.B)

Energy producer Occidental, in which Berkshire Hathaway holds a significant 25.78% stake, has recently announced a substantial 22.2% increase in its quarterly dividend. The move reflects Occidental’s commitment to enhancing shareholder value and aligns with the company’s strategic focus on delivering strong returns to investors.

Starting with the February 2024 declaration, Occidental will raise its quarterly common stock dividend per share by $0.04, reaching a new figure of $0.22.

As of October 26, Berkshire Hathaway owned an impressive 228,051,027 shares in the energy giant. Consequently, the dividend increase will result in an additional $9.1 million payout to Berkshire Hathaway in the upcoming quarter.

The dividend increase comes as Occidental on Monday announced it entered into a purchase agreement to acquire Midland-based oil and gas producer CrownRock L.P., a joint venture of CrownQuest Operating LLC and Lime Rock Partners, for cash and stock in a transaction valued at approximately $12.0 billion, including the assumption of CrownRock’s debt.

According to Occidental, the debt-funded acquisition is expected to deliver increased free cash flow on a diluted share basis, including $1 billion in the first year based on $70 per barrel WTI. The purchase of CrownRock L.P. will add to Occidental’s premier Permian portfolio with the addition of approximately 170 thousand barrels of oil equivalent per day (Mboed) of high-margin, lower-decline unconventional production in 2024, as well as approximately 1,700 undeveloped locations.

© 2023 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell a stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

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