Billionaire investor Warren Buffett now holds a 26.8% stake in the Permian-focused energy group.
Occidental Petroleum (OXY) – Get Occidental Petroleum Corporation Report shares jumped higher Monday after billionaire investor Warren Buffett added to both his stake in the oil major and speculation that he may be preparing to buy at least half of its outstanding stock.
Buffett boosted his holding in Occidental, which he has been adding to for most of the year, to 26.8%, according to Securities & Exchange Commission filings from late last week, after buying an additional 51.99 million shares.
The move came shortly after the Federal Energy Regulatory Commission (FERC) said in late August that Berkshire Hathaway’s additional investment in Occidental was “consistent with the public interest”, giving Buffett the nod to purchase “up to 50%” of the oil major’s common shares.
Buffett’s investment in the group goes back to 2019, when Occidental CEO Vicki Hollub sought his support for her $55 billion takeover of Anadarko Petroleum. Buffett helped finance that deal by purchasing $10 billion in preferred shares. He also owns, beyond his 26.8% stake, warrants that would allow him to buy another 83.9 billion in common stock for around $5 billion in cash.
Occidental shares were marked 3.5% higher in pre-market trading to indicate an opening bell price of $67.90 each, giving it a market value of around $63.2 billion.
Occidental posted stronger-than-expected second quarter earnings of $3.2 billion last month, thanks in part to a huge surge in global crude prices and record high domestic gas prices.
The group also said it would resume share buybacks and dividend payments after paying down more than $4.8 billion in debt over the quarter, much of it linked to the 2019 Anadarko takeover.