Occidental Petroleum Stock Jumps As Warren Buffett Adds to $16 Billon Stake

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The Permian-focused oil company now has a 26.8% interest owned by billionaire investor Warren Buffett.

Petroleum company Occidental (OXY) - Get Shares of Occidental Petroleum Corporation Report rose on Monday as billionaire investor Warren Buffett increased his holdings in the oil major and amid rumours that he might be getting ready to purchase at least half of the company's outstanding stock.

According to Securities & Exchange Commission papers from late last week, Buffett increased his holding in Occidental, which he has been increasing for much of the year, to 26.8% after purchasing an additional 51.99 million shares.

The action was taken soon after the Federal Energy Regulatory Commission (FERC) authorised Buffett to purchase "up to 50%" of the common shares of the oil giant by saying in late August that Berkshire Hathaway's increased investment in Occidental was "compatible with the public interest."

Buffett first invested in the company in 2019, when Occidental CEO Vicki Hollub enlisted his assistance in order to complete her $55 billion acquisition of Anadarko Petroleum. Buffett invested $10 billion in preferred shares to assist in funding that transaction.

Occidental shares were marked 3.5% higher in pre-market trading to reflect an opening bell price of $67.90 per share, giving it a market value of roughly $63.2 billion. He also has warrants that would enable him to purchase Occidental shares in addition to his 26.8% interest in the company.

Last month, Occidental announced second quarter earnings of $3.2 billion that were higher than anticipated, in part due to a sharp increase in global oil prices and record-high domestic gas prices.

The company added that after paying off more than $4.8 billion in debt during the quarter, much of it related to the 2019 Anadarko takeover, it would begin share buybacks and dividend payments.

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