One time, I was talking to (Charlie Munger) and he mentioned that he would love to have an investment in Exxon if he could get a commitment from the management that they would do no more cap-ex and they would simply run all the oil fields with the cash flows going to the shareholders. He had calculated that it would be a tremendous investment.
And, of course, oil companies don't think that way.
But Oxy thinks that way.
If you study Occidental, what you'll find is they don't really have exploration going on ... Oxy basically has no speculative drilling going on. So, in effect, it looks like a CD. They're clipping coupons.
What Oxy is doing is they have a huge gusher of cash flows coming out and that huge gusher of cash flows is only going into buybacks and dividends. It's all being pumped out to shareholders - and Warren Buffett loves that.
He looks at Oxy as U.S. Treasuries on steroids.