What are these warrants and why is OXY distributing them?

Occidental Petroleum is distributing warrants to its common stockholders as a form of distribution. Each warrant gives the holder the right to purchase one share of OXY's common stock at a specified price ($22.00) before a certain expiration date (August 3, 2027).

How many warrants will I receive, and when will I get them?

Shareholders as of the close of business on July 6, 2020 (the record date) will receive 0.125 warrants for each share of common stock they own. The warrants are expected to be distributed on August 3, 2020.

What are the tax implications of receiving these warrants?

The distribution of warrants is intended to be treated as a taxable distribution for U.S. federal income tax purposes, based on their fair market value at the time of distribution. Non-U.S. holders may be subject to a 30% withholding tax (or a lower treaty rate). Investors should consult their own tax advisors for specific advice.

What happens if I own fractional shares of OXY stock?

Fractional warrants will not be issued. Instead, the Warrant Agent will sell the warrants representing the aggregate fractional amounts and distribute the net cash proceeds to the shareholders who would have otherwise received fractional warrants.

OXY/OXY-WT 8-K: Material Agreements

Summary

Occidental Petroleum Corporation (OXY) has announced a distribution of warrants to its common stockholders. On June 26, 2020, the Board of Directors declared a distribution of warrants, exercisable at $22.00 per share, to holders of record as of July 6, 2020. These warrants will be distributed on August 3, 2020, with each shareholder receiving 0.125 warrants for every share of common stock held. The warrants have an expiration date of August 3, 2027, and are subject to anti-dilution adjustments. The company expects to issue approximately 114.8 million warrants in aggregate.

Key Highlights

1Distribution of Stock Purchase Warrants: OXY is distributing warrants to common stockholders on a 0.125 warrants per share basis.
2Exercise Price and Expiration: Warrants are exercisable at $22.00 per share and expire on August 3, 2027.
3Record and Distribution Dates: The record date for the distribution is July 6, 2020, with distribution occurring on August 3, 2020.
4Potential Dilution: The issuance of warrants could lead to future dilution if exercised, impacting existing shareholders.
5Anti-Dilution Provisions: The exercise price and number of shares issuable are subject to adjustments, including for stock splits and certain issuances.
6Taxable Distribution: The warrant distribution is expected to be treated as a taxable event for U.S. federal income tax purposes.
7Listing on NYSE: OXY has applied to list the warrants on the New York Stock Exchange.

OCCIDENTAL PETROLEUM CORP /DE/ 8-K Report, Material Agreement (Jul 27, 2020)

Summary

Key Highlights

Frequently Asked Questions