8-KMaterial AgreementsFinancial EventsCorporate Changes+3

OCCIDENTAL PETROLEUM CORP /DE/ 8-K Report, Material Agreement (Oct 7, 2014)

Filed October 7, 2014For Securities:OXYOXY-WT

Summary

Occidental Petroleum Corporation (OXY) filed an 8-K on October 7, 2014, detailing significant corporate actions primarily related to its subsidiary, California Resources Corporation (CRC). The most critical event is the successful private placement of $5.0 billion in senior notes by CRC, with net proceeds of approximately $4.95 billion. These notes are structured into three tranches: $1.0 billion of 5% senior notes due 2020, $1.75 billion of 5.5% senior notes due 2021, and $2.25 billion of 6% senior notes due 2024. The financing is linked to the anticipated spin-off of CRC. The filing also announces key developments regarding the spin-off itself, including the Board of Directors' approval and an expected distribution date of November 30, 2014, where OXY shareholders will receive 0.4 shares of CRC for each OXY share owned. Furthermore, OXY's Board declared a quarterly dividend of $0.72 per share and authorized the repurchase of an additional 60 million shares of OXY's common stock, underscoring a commitment to returning value to shareholders. Additionally, OXY amended its bylaws to implement a plurality voting standard for director elections.

Key Highlights

  • 1California Resources Corporation (CRC), an indirect wholly-owned subsidiary of Occidental Petroleum (OXY), successfully closed a private placement of $5.0 billion in senior notes on October 1, 2014.
  • 2The notes are comprised of $1.0B (5% due 2020), $1.75B (5.5% due 2021), and $2.25B (6% due 2024), issued at par for net proceeds of approximately $4.95 billion.
  • 3The spin-off of CRC to OXY shareholders was approved by the Board of Directors on October 2, 2014, with an expected distribution date of November 30, 2014.
  • 4Shareholders will receive 0.4 shares of CRC common stock for every one share of OXY common stock held on the record date of November 17, 2014.
  • 5Occidental Petroleum declared a regular quarterly dividend of $0.72 per share, payable on January 15, 2015.
  • 6OXY's Board authorized the repurchase of an additional 60 million shares of the Company's common stock.
  • 7OXY amended its bylaws to implement a plurality voting standard for the election of directors.

Frequently Asked Questions

The $5.0 billion in senior notes issued by California Resources Corporation (CRC) is primarily to finance operations and activities related to its upcoming spin-off from Occidental Petroleum (OXY). The proceeds will be used by CRC as an independent entity.

The distribution of California Resources Corporation (CRC) common stock to Occidental Petroleum (OXY) shareholders is expected to occur on November 30, 2014. The record date for determining eligibility to receive the shares is November 17, 2014.

Occidental Petroleum (OXY) declared a regular quarterly dividend of $0.72 per share, payable on January 15, 2015. Additionally, the Board authorized the repurchase of an additional 60 million shares of OXY's common stock, indicating a continued commitment to shareholder returns.

The spin-off is a corporate separation where Occidental Petroleum (OXY) will distribute at least 80.1% of its indirect subsidiary, California Resources Corporation (CRC), to OXY's shareholders. This will result in CRC becoming an independent, publicly traded company, allowing OXY to focus on its core assets and potentially unlock shareholder value.