Occidental CEO jokes Chevron is an unsuitable buyer; lifts stock
By Ernest Scheyder
WILLISTON, N.D. (Reuters) - Occidental Petroleum Corp OXY.N Chief Executive Stephen Chazen quipped on Thursday that his larger rival Chevron Corp (CVX.N: Quote) was too poor to buy the No. 4 U.S oil producer, but the offhand remark sent Oxy's stock up anyway.
During a conference call to discuss the company's fourth-quarter results, an analyst asked Chazen if his company was on the market.
The question was to be expected. With oil prices down by half since June and profits slipping, bankers are readying for a wave of mergers and acquisitions that can be made on the cheap.
"Have you considered selling Oxy?" Wolfe Research's Paul Sankey said.
Chazen, an Oxy employee since 1994 and CEO since 2011, responded, "Right now, people are cash flow challenged so I suspect selling Oxy is probably not likely."
Then, without Sankey or any other analyst mentioning Chevron, Chazen casually mentioned he had reviewed the second-largest U.S. oil producer's books.
"I looked at Chevron and they don't have any free cash," Chazen said on the call.
Laughter was audible in the background, but eyebrows were raised by the mention of a specific company, which is three times Oxy's size with $14.3 billion cash in the bank and could probably buy Oxy if it wanted. Continued...