Warren Buffett’s Berkshire Hathaway Bumps Up Occidental Stake To 25% With $122M Share Purchase

UKRAINE - 2023/05/16: In this photo illustration, Berkshire Hathaway Inc. logo is seen on a smartphone screen. (Pavlo Gonchar/SOPA Images/LightRocket via Getty Images)

Warren Buffett’s Berkshire Hathaway, Inc. (NYSE:BRKA) (NYSE:BRKB) has added more Occidental Petroleum Corp. (NYSE:OXY) shares to its portfolio, according to filings by the investment holding company late Wednesday. The fresh purchase comes close on the heels of a $201 million worth of Occidental buy by Berkshire in mid-May.

SUN VALLEY, IDAHO – JULY 07: Warren Buffett, CEO of Berkshire Hathaway, rides to a morning session during the Allen & Company Sun Valley Conference on July 07, 2022, in Sun Valley, Idaho. The world’s most wealthy and powerful businesspeople from the media, finance, and technology will converge at the Sun Valley Resort this week for the exclusive conference. (Kevin Dietsch/Getty Images) 

The Buffett-led company bought shares in three tranches over three days this week:

• Monday: 638,301 shares at a weighted average price of $57.0143
• Tuesday: 1,239,180 shares at $57.1694
• Wednesday: 260,769 shares at $57.02

Berkshire’s cumulative purchase of Occidental shares this week was 2,138,250, valued at $122.1 million.

“We don’t know where the price of oil will be, but we like Occidental’s position in the Permian,” said Buffett in a shareholders meeting held in May.

Following the week’s purchase, Berkshire’s holding of Occidental stands at 224,129,192 common shares and 91,964 preferred shares. The preferred shares Berkshire is in possession of were issued on Aug. 8, 2019, when Occidental needed funding to buy peer Anadarko Petroleum. The preferred shares carry an 8% dividend and come along with warrants to buy $5 billion worth of Occidental shares at $59.62 apiece.

“We’re not going to buy control,” said Buffett. “We’ve got the right management running it.”

Occidental has 891.75 million in outstanding shares and the 224.13 million common stock Berkshire now holds represents roughly 25% stake in the oil company.

Occidental is an upstream oil and gas company with reserves in the U.S., the Middle East and North Africa.  It is a leading producer in the Permian and DJ basins and offshore Gulf of Mexico.

Berkshire began accumulating Occidental shares since the onset of the Russia-Ukraine war in a bid to capitalize on the rising oil prices. Buffett and team have denied in the past any plans for an outright purchase of Occidental and instead expressed the desire to have the company’s shares as an investment holding.

Occidental shares are down 8.2% year-to-date as it pulled back along with the price of crude oil. The WTI grade of crude oil shed 13.6% this year despite the Chinese reopening. Analysts expect oil prices to recover as the global economic growth pickup.

Produced in association with Benzinga

Edited by Alberto Arellano and Joseph Hammond