Q3 earnings look good except for high debt and pi-s poor dividend. Certainly no need for layoffs. No sarcasm here. Really.
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You are correct.
A big part of the pitch, spin - whatever you want to call it - was having the Total deal all lined up to offset a chunk of the massive new debt.
Sort of a “Don't worry about the balance sheet, dividend or share price. We've got that all figured out. After all, were not stupid.”
But Vicki and her hotshot deal makers - who unceremoniously departed in short order - didn't grasp the rather obvious Algeria/France dynamic.
A mere detail to be worked out later . . . by someone else. After all, Vicki is a big picture gal with a big vision.
And OP is also correct – no need for layoffs when you can just "stiff" the shareholders instead.
For reference, here's an excerpt from the May 2019 press release (https://www.businesswire.com/news/home/20190509006041/en/Occidental-to-Acquire-Anadarko) :
Total S.A. Transaction
As announced on May 5, 2019, Occidental has entered into a binding agreement to sell Anadarko’s Algeria, Ghana, Mozambique and South Africa assets to Total S.A. (“Total”) (NYSE: TOT) for $8.8 billion. The sale is contingent upon Occidental completing its acquisition of Anadarko, and would be expected to close simultaneously or as soon as reasonably practicable afterwards.
Financing
Occidental is confident in its ability to realize the full potential of the transaction while maintaining a strong balance sheet, investment grade credit rating and its current dividend.
See the 'Forward Looking Statements' section for the “It's not my fault if I'm wrong” weasel words.
Oxy tried offloading Algeria to Total (They acquired Mozambique LNG). Total being French and their history in colonial Algeria put them in a tough spot. Any other company should not face the same headwinds....
The problem for a new company will be in getting rid of North Africa. Last time they tried there were no good offers or the government would not let them sell it.
I thought with all of the stink around APC (Macondo, Tronox, various superfund sites...) , low stock price and debt that we were undesirable too. Wrong... Someone will want your position in the Permian and be prepared to hold their nose to buy the company. Then do to Oxy exactly what they did to APC... carve up the assets and sell them. If Marathon was attractive then so are you. No one is safe.
The debt is good in a way because hopefully it keeps other companies from buying us. As long as the debt can be managed it is good for us.
No one who has the money wants the company because of the debt.
Quarterly presentation looks the same each quarter. Nothing to see here. I posted yesterday that given today's stock price, an acquisition bid of cash plus 20% would still be less than the stock value of earlier this year. It was promptly deleted... Perhaps something is in the works...lets see what happens.