Berkshire Hathaway Inc., run by billionaire Warren Buffett, said it has this week purchased another 4.3 million shares of Occidental Petroleum Corp., giving it a 19.2% stake in the oil company.
In a U.S. Securities and Exchange Commission filing on July 13, Berkshire said it spent about $250 million on the additional shares, and now owns 179.4 million Occidental common shares worth about $10.4 billion.
The latest purchases put Berkshire closer to 20% ownership, a threshold that would let it record its proportionate share of Occidental’s earnings with its own results, known as the equity method of accounting.
RELATED:
Is Warren Buffett’s Interest in Occidental Petroleum a Bet Against Recession?
Analysts on average expect Occidental’s net income to exceed $10 billion this year, according to Refinitiv.
Berkshire uses the equity method for its 26.6% stake in Kraft Heinz Co., the packaged food company it controls with Brazilian private equity firm 3G Capital.
Yet while Berkshire is by far Occidental’s largest shareholder, it could contend that its accounting should remain unchanged because its stake is passive.
Berkshire also owns $10 billion of Occidental preferred stock that throws off $800 million of annual dividends, and has warrants to buy another 83.9 million common shares for $5 billion.
Occidental’s share price has doubled this year, helped by rising oil prices following Russia’s invasion of Ukraine.
Some analysts have speculated that Berkshire could buy all of the Houston-based company, which has been reducing debt since acquiring Anadarko Petroleum Corp. for $35.7 billion in 2019.
Berkshire’s preferred stock investment helped finance the Anadarko takeover.
In 2010, Berkshire bought the BNSF railroad for $26.5 billion after earlier accumulating a 22.6% stake.
Buffett’s Omaha, Nebraska-based conglomerate also owns dozens of other businesses including the Geico car insurer and See's candies, and stocks including Apple Inc. and Bank of America Corp.
Recommended Reading
Transocean President, COO to Assume CEO Position in 2Q25
2025-02-19 - Transocean Ltd. announced a CEO succession plan on Feb. 18 in which President and COO Keelan Adamson will take the reins of the company as its chief executive in the second quarter of 2025.
Ovintiv Names Terri King as Independent Board Member
2025-01-28 - Ovintiv Inc. has named former ConocoPhillips Chief Commercial Officer Terri King as a new independent member of its board of directors effective Jan. 31.
Independence Contract Drilling Emerges from Chapter 11 Bankruptcy
2025-01-21 - Independence Contract Drilling eliminated more than $197 million of convertible debt in the restructuring process.
Berry Announces Jeff Magids as New CFO
2025-01-21 - Jeff Magids was appointed as Berry Corp.’s new CFO on Jan. 21 in replacement of Mike Helm, effective immediately.
Michael Hillebrand Appointed Chairman of IPAA
2025-01-28 - Oil and gas executive Michael Hillebrand has been appointed chairman of the Independent Petroleum Association of America’s board of directors for a two-year term.
Comments
Add new comment
This conversation is moderated according to Hart Energy community rules. Please read the rules before joining the discussion. If you’re experiencing any technical problems, please contact our customer care team.