Occidental Petroleum Corporation (NYSE: OXY) announced today that its
Board of Directors has approved the spin-off of its California oil and
gas business into an independent and separately traded company, California
Resources Corporation.
The companies will be separated through the distribution of
approximately 80.1 percent of the outstanding shares of California
Resources to holders of Occidental common stock. Subject to the
satisfaction of the conditions to the spin-off, the distribution is
expected to occur on November 30, 2014. Occidental shareholders will
receive 0.4 shares of California Resources common stock for every one
share of Occidental common stock held at the close of business November
17, 2014, the record date for the distribution. Fractional shares of
California Resources common stock will not be distributed. Any
fractional shares of California Resources common stock will be
aggregated and sold in the open market and the aggregate net proceeds of
the sales will be distributed ratably in the form of cash payments to
Occidental stockholders of record who would otherwise be entitled to
receive a fractional share of California Resources common stock.
Following the distribution of California Resources common stock,
California Resources will be an independent, publicly traded company,
and Occidental will retain approximately 19.9 percent ownership interest
in California Resources for a period of up to 18 months. California
Resources has been approved to list its shares of common stock on the
New York Stock Exchange under the symbol “CRC”.
As previously announced, California Resources’ Board of Directors will
include William E. Albrecht, Executive Chairman, and Todd A. Stevens,
President and Chief Executive Officer. Other Board members will include:
Justin A. Gannon, 65, an independent consultant, private investor and
former Managing Partner with Grant Thornton LLP and audit partner with
Arthur Andersen LLP, who brings over four decades of financial
accounting and private investment experience; Ronald L. Havner, Jr., 56,
Chairman of the Board, President and Chief Executive Officer of Public
Storage, who will provide insight into growing a California-based
business; Harold M. Korell, 69, who recently served as Chairman of the
Board and before that as Chief Executive Officer of Southwestern Energy
Company and will bring over four decades of experience in the energy
business; Richard W. Moncrief, 72, founding principal and current
President and Chairman of the Board of Moncrief Oil International, Inc.,
who offers extensive experience in the upstream oil and gas industry;
Avedick B. Poladian, 62, Executive Vice President and Chief Operating
Officer of Lowe Enterprises, Inc., and a Director of Occidental
Petroleum; and Robert V. Sinnott, 65, President, Chief Executive Officer
and Chief Investment Officer of Kayne Anderson Capital Advisors, L.P.,
who brings broad experience analyzing and investing in oil and gas
industry firms.
Trading of Occidental and California Resources Shares Prior to the
Distribution Date
In connection with the distribution, beginning on or shortly before the
record date and continuing up to and including through the distribution
date, Occidental expects that there will be three trading markets:
-
In the “regular way” market, shares of Occidental common stock
will trade with an entitlement to the California Resources common
shares distributed on the distribution date under the symbol “OXY”.
Holders who sell Occidental common stock in the regular way market on
or before the distribution date will also sell their right to receive
California Resources common shares.
-
In the “ex-distribution” market, shares of Occidental common stock
will trade without the right to the California Resources common shares
distributed on the distribution date under the symbol “OXY WI”.
Holders who sell Occidental common stock in the ex-distribution market
on or before the distribution date will retain their right to receive
California Resources common shares in the distribution.
-
In the “when-issued” market, the right to receive California Resources
common shares distributed on the distribution date will trade under
the symbol “CRC WI”. Holders who sell the right to California
Resources common shares in the when-issued market on or before the
distribution date will retain their shares of Occidental common stock.
Occidental anticipates that “regular way” trading of California
Resources common stock under the symbol “CRC” will begin on December 1,
2014, the first trading day following the distribution date. California
Resources will report its third quarter financial results and hold its
own earnings call after market close on October 22, 2014.
Occidental stockholders are encouraged to consult their financial
advisors and tax advisors regarding the particular consequences of the
distribution in their situation, including, without limitation, the
specific implications of selling Occidental common stock on or prior to
the distribution date and the applicability and effect of any U.S.
federal, state, local and foreign tax laws.
Information About the Spin-off
The California Resources spin-off has been structured to qualify as a
tax-free distribution to U.S. holders of Occidental common stock for
U.S. federal income tax purposes. Cash received in lieu of fractional
shares will, however, be taxable. Occidental has received a private
letter ruling from the Internal Revenue Service with respect to the
treatment of certain aspects of the spin-off. Based on the private
letter ruling and certain facts, assumptions, representations and
undertakings made by Occidental and California Resources, Occidental
will receive an opinion of counsel to the effect that for U.S. federal
income tax purposes, the distribution of California Resources common
stock and certain related transactions will not be taxable to Occidental
or U.S. holders of Occidental common stock, except in respect to cash
received in lieu of fractional share interests which generally will be
taxable to such holders as capital gain.
The completion of the distribution is subject to the satisfaction or
waiver of a number of conditions, including the Registration Statement
on Form 10 for California Resources common stock being declared
effective by the U.S. Securities and Exchange Commission (SEC) and
certain other conditions described in the information statement included
in the California Resources Registration Statement on Form 10.
Occidental expects all the conditions to the distribution to be
satisfied on or before the distribution date. California Resources’
Registration Statement on Form 10 is available at the SEC's website at http://www.sec.gov.
Prior to the distribution, Occidental will mail or provide access to a
copy of the information statement filed as part of the registration
statement to all shareholders entitled to receive the distribution. The
information statement will provide details regarding the distribution
and describe California Resources and its shares, including the risks of
California Resources’ business and owning shares of California Resources
common stock. Occidental shareholders are encouraged to read the
information statement closely.
No action is required by Occidental shareholders in order to receive
shares of California Resources common stock in the spin-off
distribution. Occidental shareholders entitled to receive the dividend
will receive a book-entry account statement reflecting their ownership
of California Resources common stock, or their brokerage account will be
credited for the shares.
California Resources will be California’s largest natural gas producer
and the largest oil and gas producer on a gross-operated barrels of oil
equivalent basis. It will be the largest oil and gas mineral acreage
holder in California with approximately 2.3 million net acres and will
have major operations in the state’s high-potential oil and gas basins,
including Los Angeles, San Joaquin, Ventura and Sacramento.
Occidental is one of the largest U.S. oil and gas companies, based on
equity market capitalization. The company will have exploration and
production operations in the Permian Basin and other parts of Texas, the
Middle East region and Colombia. It will also have a midstream and
marketing segment and a chemical subsidiary, OxyChem. Each of these
segments is a leader in its respective sector.
About Occidental Petroleum
Occidental
Petroleum Corporation is an international oil and gas exploration
and production company with operations in the United States, Middle
East/North Africa and Latin America. Headquartered in Houston,
Occidental is one of the largest U.S. oil and gas companies, based on
equity market capitalization. Occidental’s midstream and marketing
segment gathers, processes, transports, stores, purchases and markets
hydrocarbons and other commodities in support of Occidental’s
businesses. The company’s wholly owned subsidiary OxyChem manufactures
and markets chlor-alkali products and vinyls. Occidental is committed to
safeguarding the environment, protecting the safety and health of
employees and neighboring communities and upholding high standards of
social responsibility in all of the company's worldwide operations.
Forward-Looking Statements
Portions of this press release contain forward-looking statements and
involve risks and uncertainties that could materially affect expected
results of operations, liquidity, cash flows and business prospects.
Actual results may differ from anticipated results, sometimes
materially, and reported results should not be considered an indication
of future performance. Factors that could cause results to differ
include, but are not limited to: global commodity pricing fluctuations;
supply and demand considerations for Occidental's products;
higher-than-expected costs; the regulatory approval environment;
reorganization or restructuring of Occidental's operations, including
any delay of, or other negative developments affecting, the spin-off of
California Resources Corporation; not successfully completing, or any
material delay of, field developments, expansion projects, capital
expenditures, efficiency projects, acquisitions or dispositions;
lower-than-expected production from development projects or
acquisitions; exploration risks; general economic slowdowns domestically
or internationally; political conditions and events; liability under
environmental regulations including remedial actions; litigation;
disruption or interruption of production or manufacturing or facility
damage due to accidents, chemical releases, labor unrest, weather,
natural disasters, cyber attacks or insurgent activity; failure of risk
management; changes in law or regulations; or changes in tax rates.
Words such as “estimate,” “project,” “predict,” “will,” “would,”
“should,” “could,” “may,” “might,” “anticipate,” “plan,” “intend,”
“believe,” “expect,” “aim,” “goal,” “target,” “objective,” “likely” or
similar expressions that convey the prospective nature of events or
outcomes generally indicate forward-looking statements. You should not
place undue reliance on these forward-looking statements, which speak
only as of the date of this release. Unless legally required, Occidental
does not undertake any obligation to update any forward-looking
statements, as a result of new information, future events or otherwise.
Material risks that may affect Occidental's results of operations and
financial position appear in Part I, Item 1A “Risk Factors” of the 2013
Form 10-K. Occidental posts or provides links to important information
on its website at www.oxy.com.
Copyright Business Wire 2014