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Occidental Petroleum: Entering Slowly The Event Horizon


  • Occidental Petroleum filed an 8K filing in which the company changes its control severance plan for executives.
  • This action has fueled speculation about a possible takeover down the road.
  • Which company could be solid enough to attempt a takeover and digest such a large debt load? Maybe Chevron will eventually make an offer, but at what price.
  • Looking for a helping hand in the market? Members of The Gold And Oil Corner get exclusive ideas and guidance to navigate any climate. Get started today »

Source: LA Times

Note: An event horizon is a notional region around a black hole beyond which no light or other radiation can escape anymore. It is considered a point of no return. By extension, a financial event horizon could spell an economic collapse that has been set in motion.

Quick Introduction

The Houston-based Occidental Petroleum (NYSE:OXY) found itself again at the center of a new round of speculation about a possible controversial acquisition. However, this time the market is not expecting Occidental to acquire another company, but rather to be the target of a takeover itself.

Occidental Petroleum has been dropping slowly down the food chain and now is regarded as mere food for bigger fish. From a vicious predator ready to gobble the entire US Shale, the company is now downgraded to a wild game prepared to be hunted.

The past six months have been extremely difficult for the company and, above all, its shareholders.

The market has collapsed, and oil prices have sunk to unsustainable lows. Yes, we have witnessed an excellent rebound recently, but we are still in the danger zone, and we know that fierce headwinds are just around the corner.

The stock collapsed since January and if we compare OXY with EOG Resources (EOG) or Chevron corp. (CVX) it is not a bright picture.

ChartData by YCharts

One thing for sure is that a large part of the adverse effects that have crippled Occidental can be traced back to one single faulty management decision to takeover Anadarko Petroleum. I believe we can all agree with that. It has been done at the worst time ever in history and at an inflated price that required debilitating financing deals that are still haunting the company as I am writing.

As a reminder, Occidental's CEO Vicki Hollub secured

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This article was written by

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As an experienced investor, I will help you stay on task more efficiently.

I am a former test & measurement doctor engineer (geodetic metrology). I was interested in quantum metrology for a while.

I live mostly in Sweden with my loving wife.

I have also managed an old and broad private family Portfolio successfully -- now officially retired but still active -- and trade personally a medium-size portfolio for over 40 years.

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Note: I am not a financial advisor. All articles are my honest opinion. It is your responsibility to conduct your own due diligence before investing or trading.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

I trade short tern OXY quite regularly but do not have a long term position.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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