Oxy struggles to cope with the impacts of its acquisition of Anadarko

FORBES | Hindsight is easy, but you have to believe that, if she could go back in time to April of 2019, Oxy CEO Vicki Hollub might take a pass on that $55 billion acquisition of Anadarko Petroleum. To be fair, no one could have foreseen the advent of the COVID-19 pandemic at the time Oxy stole Anadarko out of from under Chevron at the end of their hugely expensive bidding war. But even at the time, most analysts questioned the wisdom of acquiring so much additional debt - including an infusion of $10 billion from Warren Buffet - to pay a premium price for Anadarko and its assets.

All of this comes up again this week as Oxy reported a huge loss of $8.4 billion for the second quarter of 2020, a loss that equates to $9.12 per share. The loss includes a write-down of its oil and gas assets of $6.2 billion by the company, which remains saddled with $36 billion in debt. “We continue to make progress on our debt structure and have significantly exceeded our cost savings targets while delivering operational excellence across our business,” Hollub said in a statement.

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