$OXY (Occidental) and the Oracle of Omaha

(Disclaimer: Literally none of this is financial advice. If you take this as financial advice, the only thing you better be sending me are sad cat gifs. I am not liable for your financial gains or losses - this is just my uninformed opinion. Also everyone should be properly credited for their work - if I didn't let me know and I'll fix it)

Also further note: Why the hell am I writing this article if it's something that Warren Buffet keeps buying and has what? 29%?

Current Performance Snapshot (As of Close 6/28/2024):

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Price as of June 28, 2024: $63.03

Market Cap: $56.05B

P/E Ratio: 17.14

Dividend Yield: 1.4%

__________________________________________________________________Daily Chart Snapshot (As of Close 6/28/2024):

How rare is it for someone to keep DCA'ing and adding and adding and not getting with stop losses on dips? Pretty rare if you look at WSB...

Buttttt, not so rare when you're looking at Mr. Warren Buffet.

The man has been buying for a long long time. For a while back in 2022 with all the energy volatility, he was up at 14% of the stake. But what put this company on my radar was the fact that he bought shares 9 days in a row earlier this month.

This has brought his stake up to 28.8% of the company. He also has warrants ready to buy more shares that could push his holding up to 40% of the company.

So why the hell is he buying the stock and why the hell am I looking at it? Well as you know, I'm not exactly the most bullish on the fundamentals of oil and gas right now. Weak demand, all that stuff.

But here we are, so why is it that Warren B. keeps buying?

Enter CrownRock

And so what's happening here? Well back in December of 2023 Oxy announced they were going to target buying CrownRock...and here are some of the more immediate effects:

The US onshore portfolio gets strengthened as almost immediately with some of the best Permian Basin Assets.

Assuming that WTI is maintained at $70/bbl (and we're higher than that) we should see around $1B being added on a FCB diluted share basis in the first year alone. Production will increase and underdeveloped regions will be explored.

Unconventional sub-$40 breakeven inventory will also increase by 33% and high-margin, lower decline unconventional production will be added at a clip of 170 Mboed.

At the end of the day, when all of this is happening and debt principal is decreasing by $4.5 billion is happening who can complain?

Why Now

So the question is why is Mr. Warren B buying right now?

Well the simple answer is that it's happening (or at least it should be)

After months in regulatory hell, the deal looks like it's finally happening

So when Mr. B sees the dips toward the support lines, he thinks "why the hell not"

After all, when it only takes $70 per barrel to make that much money, why the hell wouldn't you want the massive additional cash influx?

TLDR: If he's in, I'm in