HOUSTON (Reuters) -U.S. oil producer Occidental Petroleum Corp will increase its fixed dividend payments to shareholders after cutting its debt levels to $25 billion, Chief Executive Vicki Hollub said on Friday.
“We are going to get there sooner than we expected,” Hollub told analysts on a call to comment on the company’s third-quarter results.
Occidental quadrupled its debt in 2019 to $40 billion after buying https://www.reuters.com/article/us-anadarko-petrol-m-a-chevron/chevron-drops-anadarko-takeover-battle-after-occidental-raises-bid-idUSKCN1SF1GX Anadarko and its prized assets in the United States’ huge Permian shale oilfield.
It used extra cash brought by higher commodity prices in the third quarter to repay $4.3 billion of long-term debt, bringing it down to $31 billion.
The company, which declared a regular quarterly dividend of $0.01 per share on common stock earlier this week, did not specify by how much its dividends would increase.
Shares were up a fraction on Friday morning, but moved down 0.77% to $33.50 in early afternoon trading after Hollub ruled out resuming buybacks together with a dividend increase.
Occidental is the only oil producer “not giving meaningful cash returns back to investors” as oil prices approach a seven-year high, Bank of America analyst Douglas George Leggate said on Friday.
Share repurchases are “a longer-term possibility for us”, Hollub told analysts, but will not come in “the nearest term”.
The company plans to increase dividends without production growth in the coming years as it moves to reduce carbon emissions from its operations, Hollub said.
“We don’t need additional growth from production right now to be able to increase the dividend over the next couple of years,” she said.
Occidental more than doubled its profit to $836 million in the third quarter from the previous three months, beating market estimates.
Higher commodities prices boosted its upstream results despite a temporary production bump in the third quarter after Hurricane Ida hit the Gulf of Mexico.
(Reporting by Sabrina Valle; Editing by Chris Reese, Jonathan Oatis and Jan Harvey)
