[Editor's note: This story was updated at 5:21 p.m. CT May 31.]
Occidental Petroleum Corp. cut its quarterly dividend to just a penny per share on May 29 after having slashed it 86% in March to save cash after a historic plunge in oil prices.
The oil and gas producer's shares fell 5% to $12.95 and have lost nearly 70% of their value this year.
Occidental has been struggling to cut a crushing debt load since its $38 billion purchase of rival Anadarko Petroleum last year, an ill-timed bet on rising oil prices.
Occidental previously slashed its quarterly dividend to 11 cents a share from 79 cents, cut its 2020 spending budget nearly in half, and offered employees buyouts to save cash.
Debt rating firm Gimme Credit this week ranked the company among its Bottom Ten, citing its lack of free cash flow despite dividend and spending cuts.
Occidental, which reported more than $36 billion in debt at the end of March, faces “gigantic near term maturities,” wrote Gimme Credit's Carol Levenson.
On March 9, U.S. oil futures began a historic plunge. In April, they actually closed one session in negative territory for the first time, as oil-producing nations waged a price war and the coronavirus outbreak eroded demand.
This year's two dividend cuts will save about $2.7 billion a year. But the one-cent payout "will keep OXY in equity indices and portfolios that require a payout," said Robert W. Baird analyst Ethan Bellamy.
At its first annual meeting since the Anadarko takeover, also held on May 29, Occidental shareholders approved the election of all 11 director nominees and approved the issue of 400 million new shares, warrants and a poison-pill measure.
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