Despite relatively good returns on capital and a solid asset base, Occidental Petroleum (NYSE:OXY)
hasn't really been at the top of the Street's list of favorites in the
oil and gas sector. Now, management is pushing on with an ambitious
restructuring plan that will see its once-core California business spun
out on its own, a likely sell-down of its assets in the Middle East and
North Africa, and a more aggressive drilling program in the Permian. All
told, Occidental should be looking at better production growth and
stronger returns than most large peers, with an enhanced oil recovery
program supporting a decent dividend. A combination valuation
methodology supports a fair value above $110, which I think is a decent
implied return.
Follow this link to the full article:
Occidental Has A Good Plan, And Some Value Left
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