Tag: Occidental

Berkshire Hathaway and Occidental Partner to Revolutionize Lithium Extraction

Post author By David Mazor
Post date June 4, 2024
No Comments on Berkshire Hathaway and Occidental Partner to Revolutionize Lithium Extraction

(BRK.A), (BRK.B)

Berkshire Hathaway-backed Occidental and BHE Renewables, a subsidiary of Berkshire Hathaway Energy, have joined forces to demonstrate and deploy TerraLithium’s Direct Lithium Extraction (DLE) technologies. This partnership aims to extract and commercially produce high-purity lithium compounds from geothermal brine, and will lead to Berkshire owning and operating commercial lithium production facilities in California.

TerraLithium, a subsidiary of Occidental, holds patents for DLE technologies capable of converting any lithium-containing brine into a high-purity, responsibly sourced lithium supply. BHE Renewables operates 10 geothermal power plants in California’s Imperial Valley, which handle 50,000 gallons of lithium-rich brine per minute, producing 345 megawatts of clean energy. The joint venture has initiated a project at BHE Renewables’ Imperial Valley facility to demonstrate TerraLithium’s DLE technology’s feasibility for environmentally safe lithium production.

“This joint venture with TerraLithium signifies a major step forward in BHE Renewables’ goal to produce lithium in an environmentally responsible and commercially viable way, benefiting the Imperial Valley community,” said Alicia Knapp, President and CEO of BHE Renewables. “We are thrilled to collaborate with Occidental on this opportunity to position the Imperial Valley as a global leader in lithium production.”

Upon successful demonstration, BHE Renewables plans to construct, own, and operate commercial lithium production facilities in the Imperial Valley and potentially license the technology for projects elsewhere.

“By integrating Occidental’s brine management expertise with BHE Renewables’ geothermal operations knowledge, we can advance a more sustainable form of lithium production,” said Richard Jackson, President of U.S. Onshore Resources and Carbon Management Operations at Occidental. “We are eager to work with BHE Renewables to showcase how DLE technology can produce a critical mineral essential for achieving net-zero goals.”

Lithium is crucial for batteries in electric vehicles, consumer electronics, and energy storage, as well as in the production of glass, ceramics, and pharmaceuticals. The International Renewable Energy Agency projects a tenfold increase in battery lithium demand from 2020 to 2030, driven by battery demand growth.

“Securing a reliable and domestic high-purity lithium supply is vital for the energy transition,” said Jeff Alvarez, President and General Manager of TerraLithium. “The partnership with BHE Renewables will accelerate the development and commercial deployment of our Direct Lithium Extraction technologies to meet the growing global lithium demand.”

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.

Tags Berkshire Hathaway Energy, Occidental

Occidental

Berkshire Hathaway Granted Approval to Substantially Increase Stake in Occidental Petroleum

Post author By David Mazor
Post date April 4, 2024
No Comments on Berkshire Hathaway Granted Approval to Substantially Increase Stake in Occidental Petroleum

(BRK.A), (BRK.B)

The Federal Energy Regulatory Commission (FERC) has greenlit Berkshire Hathaway’s expansion of its stake in Occidental Petroleum, deeming it “consistent with the public interest.” This move permits Berkshire to boost its ownership in the energy giant up to fifty percent.

Warren Buffett, the driving force behind Berkshire Hathaway’s major investment decisions, has articulated the company’s positive stance on Occidental Petroleum. At the 2023 Berkshire Hathaway Annual Meeting, Buffett expressed favor towards Occidental’s position in the Permian Basin, highlighting its strategic significance. However, he emphasized that Berkshire has no intentions of acquiring a controlling interest in the company. Buffett reiterated confidence in Occidental’s existing management, asserting, “we wouldn’t know what to do with it.”

In addition to its ongoing open market purchases, Berkshire Hathaway holds warrants enabling it to acquire 80 million Occidental shares at an exercise price of $62.50 per share. These warrants were obtained in 2019 when Berkshire provided $10 billion, facilitating Occidental’s successful bid of $38 billion to acquire Anadarko Petroleum, outbidding industry heavyweight Chevron.

Berkshire Hathaway’s increasing stake in Occidental Petroleum underscores its continued confidence in the energy sector and strategic investments aligned with its long-term vision.

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Occidental

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

Post author By David Mazor
Post date December 12, 2023

(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.

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Occidental

Occidental Makes $1.1 Billion Acquisition of Carbon Engineering Ltd.

Post author By David Mazor
Post date August 17, 2023

(BRK.A), (BRK.B), (OXY)

Just days after Occidental Petroleum subsidiary 1PointFive was awarded a portion of a $1.2 billion grant from the Biden administration for its commercial-scale direct air capture facilities in Texas, the Berkshire Hathaway-backed company has announced that the wholly owned subsidiary has entered into a definitive purchase agreement to acquire all the outstanding equity of Carbon Engineering Ltd.

The acquisition is for total cash consideration of approximately $1.1 billion, to be made in three approximately equivalent annual payments, with the first at closing.

This transaction is expected to close before the end of 2023, subject to Canadian court reviews, Canadian and U.S. regulatory approvals and other customary closing conditions.

Occidental has been working with Carbon Engineering on direct air capture (DAC) deployment since 2019. Acquiring Carbon Engineering aligns with Occidental’s integrated net-zero strategy and provides Occidental, through its 1PointFive subsidiary, the opportunity to rapidly advance DAC technology breakthroughs and accelerate deployment of DAC as a large-scale, cost effective, global carbon removal solution. Carbon Engineering’s DAC-based climate solutions utilize standardized processes and proven industrial equipment.

“We expect the acquisition of Carbon Engineering to deliver our shareholders value through an improved drive for technology innovation and accelerated DAC cost reductions. The technology partnership also adds new revenue streams in the form of technology licensing and royalties. Importantly, the acquisition enables Occidental to catalyze broader development partnerships for DAC deployment in the most capital efficient and valuable way,” said Occidental President and CEO Vicki Hollub.

“We look forward to continuing our collaboration with the Carbon Engineering team, which has been a leader in pioneering and advancing DAC technology,” Hollub said. “Together, Occidental and Carbon Engineering can accelerate plans to globally deploy DAC technology at a climate-relevant scale and make DAC the preferred solution for businesses seeking to remove their hard-to-abate emissions.”

Upon closing, Carbon Engineering would become a wholly owned subsidiary of Oxy Low Carbon Ventures. Carbon Engineering’s personnel will continue to drive ongoing DAC technology development efforts and work closely with the Occidental and 1PointFive teams to bring DAC solutions to market. Carbon Engineering’s research and development activities and Innovation Center will remain in Squamish, British Columbia.

“We have always believed that global partnerships and cross-industry collaboration would be required to deploy DAC infrastructure at the scale required to make a climate-relevant impact. Carbon Engineering and Occidental have been working increasingly close together for the past five years to address the CO2 problem, making Occidental a trusted and committed partner for this next chapter in Carbon Engineering’s journey,” said Carbon Engineering CEO Daniel Friedmann. “At the core of this deeper relationship is the commitment to invest in the development of our technology here in Canada, and the global reach to accelerate implementation of DAC-based climate solutions in the U.S. and around the world.”

1PointFive is building Stratos, the world’s largest DAC plant, which is expected to be commercially operational in mid-2025, in Ector County, Texas. Occidental and Carbon Engineering are also adapting Stratos’ front-end engineering and design study for a DAC plant to be built at King Ranch in Kleberg County, which is part of the South Texas DAC Hub that was selected to receive a grant from the U.S. Department of Energy’s Office of Clean Energy Demonstrations.

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway and Occidental, 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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Minority Stock Positions

No OXY Takeover in Berkshire’s Future, Says Buffett

Post author By David Mazor
Post date May 6, 2023

(BRK.A), (BRK.B)

Rumors have been circulating that Berkshire Hathaway, the conglomerate headed by legendary investor Warren Buffett, is seeking to take over Occidental Petroleum. However, Buffett himself has dismissed these speculations, stating that his company is not looking to buy control of the oil producer.

At this year’s Berkshire annual meeting, Buffett made it clear that the rumors were unfounded. “There’s speculation about us buying control, we’re not going to buy control,” he said. “We wouldn’t know what to do with it.”

Despite this, Berkshire Hathaway has already purchased a significant stake in Occidental, after receiving regulatory approval to buy as much as 50% of the company. While Buffett has ruled out seeking control of the company, he has hinted that his company may add to their current 23.5% stake in the future.

In addition, Berkshire holds warrants that are exercisable for 83.9 million common shares for $5 billion. These warrants give the company the option to purchase more shares at a later date, potentially increasing their stake in Occidental even further.

“We may or may not own more in the future but we certainly have warrants on what we got on the original deal on a very substantial amount of stock around $59 a share, and warrants last a long time, and I’m glad we have them,” Buffett explained.

It’s worth noting that Buffett has a history of making strategic investments in companies without necessarily seeking control. His approach is to invest in strong companies with a long-term outlook, and then let their management teams run the business.

This seems to be the case with Occidental Petroleum. While Berkshire Hathaway has a significant stake in the company, they are not looking to take over or interfere with the management team’s decisions. Instead, they are content to hold on to their shares and potentially increase their stake in the future.

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Minority Stock Positions

Berkshire Hathaway Occidental Petroleum Stake Reaches 23.6 Percent

Post author By David Mazor
Post date March 28, 2023

(BRK.A), (BRK.B)

A dip in the price of Occidental Petroleum saw Warren Buffett adding more purchases of OXY shares on March 23 and 27.

In its latest Form 4 filing, Berkshire purchased 3,666,714 shares of OXY stock at prices ranging from $58.2862 to $59.6262 per share.

After these purchases, Berkshire holds 211,707,119 shares of OXY common stock, and raises Berkshire’s stake to 23.6 percent.

Berkshire also holds 100,000 series A preferred stock shares with an 8% dividend and warrants that Berkshire can exercise for roughly 84M shares of common stock at $59.624 per share.

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Minority Stock Positions

Lease Agreement Gives Occidental Space for up to 3 Billion Metric Tons of Carbon Sequestration

Post author By David Mazor
Post date November 7, 2022

(BRK.A), (BRK.B)

Energy producer Occidental, which is over 20-percent owned by Berkshire Hathaway, and its subsidiary 1PointFive and King Ranch, a privately-held agricultural production and resource management company, today announced a lease agreement to support large-scale Direct Air Capture (DAC) projects for dedicated carbon dioxide (CO2) sequestration on 106,000 acres in Kleberg County, Texas.

The agreement provides access to land for the potential to remove up to 30 million metric tons of CO2 per year through DAC and pore space estimated to store up to 3 billion metric tons of CO2 in geologic reservoirs.

The agreement will advance 1PointFive’s development plans for commercial-scale DAC plants as a decarbonization solution to accelerate a net-zero economy. In addition to DAC emissions capture, the King Ranch acreage is also located near industrial emitters in the Gulf Coast region, including Corpus Christi, where emissions can be captured, transported and sequestered in the pore space. Each DAC plant in the site is expected to be capable of removing up to 1 million metric tons of CO2 per year yielding a total capacity of up to 30 million metric tons per year when all facilities are operational.

“We are excited to work with King Ranch on what will be the largest DAC deployment project in the world, as we continue our plans to provide affordable and practical industrial-scale decarbonization solutions,” said Vicki Hollub, President and CEO, Occidental. “We believe large-scale DAC, which is an innovative engineered CO2 removal solution, will play an important role in helping organizations and nations reduce their net CO2 emissions and provide the scale necessary to make a difference in addressing climate change globally.”

“King Ranch has been focused on conservation for more than a century. While these methods to capture carbon are relatively new, they are consistent with our vision and values. We’re proud to partner with Occidental while continuing a focus on stewardship of our natural resources,” said Robert Hodgen, CEO of King Ranch, Inc.

Occidental’s first DAC plant in the Texas Permian Basin is currently under construction and builds on Occidental’s 50 years of carbon management experience. 1PointFive is working with Carbon Engineering to commercialize their technology and enable the global deployment of large-scale DAC projects. Worley is handling engineering, procurement, and construction (EPC) services for the first DAC plant.

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Minority Stock Positions

Berkshire Hathaway Pushes Its Occidental Petroleum Stake Above 20%

Post author By David Mazor
Post date August 9, 2022

(BRK.A), (BRK.B)

A dip in the price of Occidental Petroleum below $60 has Warren Buffett resuming his purchases of OXY shares, spending $391 million for just under 6.7 million Occidental shares between Aug. 4 and Aug. 8.

Berkshire now owns 188.4 million Occidental shares, which is 20.2% of all outstanding shares.

The purchases bring Berkshire Hathaway’s stake to over 20% and enable it to add a portion Occidental’s earnings to its own depending on the accounting method it chooses.

In its latest Form 4 filing, Berkshire made purchases at prices as low as $57.326 and as high as $60.0162.

In addition to its over 20% stake in OXY common stock, Berkshire also holds 100,000 series A preferred stock shares and warrants that Berkshire can exercise for roughly 84M shares of common stock at $59.624 per share.

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