On April 28, Occidental Petroleum (OXY) took its first flight to Omaha in four years. That includes its current G-550 and the G-650 it sold in late September, 2017. Two days later, Berkshire Hathaway announced an greement to buy $10bn of OXY preferred stock, contingent on OXY’s acquistion of Anadarko Petroleum (APC)
OXY and Chevron (CVX) have been locked in a bidding war to buy APC, and Warren Buffett’s backing of OXY is a significant boost to its bid.
JetTrack users had a two day headstart on the news. Those tracking the deal had both CVX and OXY on their watchlists and been notified of each flight. JetTracks’ Signals notified that it had been more than a year since they had visited Omaha, prompting further research and an increase in probability of Buffett involvement.
“Warren Buffett is getting involved in a rare bidding war unfolding in the energy industry.
Berkshire Hathaway has committed a $10 billion preferred stock investment in Occidental Petroleum contingent on the company completing its proposed takeover of Anadarko Petroleum. Last week, Occidental made a rival bid for the oil and gas driller, challenging Chevron’s $33 billion buyout of Anadarko.
Shares of Occidental fell 2% on Tuesday, while Chevron’s stock popped 3%. A company’s stock price often falls when investors believe it is about to acquire a company. Anadarko’s shares fell about half a percent.
The capital injection from Berkshire could make Occidental a more formidable suitor. In pursuing Anadarko, Occidental is going toe to toe with an oil major with a much bigger balance sheet and whose market capitalization is nearly five times its value.
Several analysts initially downgraded shares of Occidental following its bid, with many saying the buyout would carry more risks than Chevron’s proposed takeover of Anadarko. Achieving the benefits of the deal depends in part on Occidental’s successful divestment in $10 billion-$15 billion in assets and achieving $3.5 billion in savings from the tie-up.”
OXY bought their current Gulfstream G550 on July 28th, 2014, using their flight operation subsidiary, Swiflite Aircraft Corporation. Sources tying Swiflite Aircraft Corporation to OXY include their SEC filings, not to mention job postings.