This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Will Asset Sales Boost Occidental's Stock?

NEW YORK ( TheStreet) -- Occidental Petroleum (OXY - Get Report) is looking to sell about 40% of its assets in the Middle East and North Africa, perhaps in the hope that a sale will help lift its stock, the way asset sales boosted the stock of Apache (APA - Get Report), another U.S.-based energy company.

Despite the asset sales, the two companies will continue to go after growth in the Middle East. Occidental will spend an additional $300 million in its core markets in the Middle East while Apache has applied for additional leases in Egypt.

Apache's officials have repeatedly said that the unrest in Egypt hasn't hurt the company's operations. But the crisis is not making operating in the Middle East more attractive. Last August, markets cheered when Apache announced the sale of Egyptian assets. The shares -- which traded recently at $82.79, up 70 cents -- rose 9% on the day after the company announced it was selling one-third of its assets in Egypt to China's Sinopec(SHI).

Shares of Occidental's shares, meanwhile, have risen by 13% during the last 12 months. They were recently trading at $94.38, up 1%.

The company was looking to sell assets to a consortium of state-owned enterprises from Oman, the United Arab Emirates and Qatar. According to Bloomberg, however, the company could not secure the deal because of the political rift between Qatar and other Arab countries. Unlike its peers, Qatar has been supporting the Muslim Brotherhood in Egypt.

As a result, Occidental is considering breaking up its assets instead of selling it to a single investor group.

Occidental has exposure to the Middle East with operations in Bahrain, Iraq, Libya, Oman, Qatar, U.A.E. and Yemen. It has more than 15 million acres of oil and gas assets in the Middle East that account for more than a third of its global oil and gas production.

The company is the second biggest oil producer at offshore Qatar and one of the largest oil producers in Oman. In Bahrain, Occidental is redeveloping the country's first oil field that was discovered back in 1930s. In Iraq, Occidental is developing the giant Zubair oil field, located in the southwest region.

Occidental's plans to sell its assets in the Middle East are part of the larger drive by major oil companies looking to sell overseas assets and refocus on North America.

Apache is also looking to divest in the Middle East. However, unlike Occidental, Apache is a major player in Egypt. In the final quarter of 2013, Apache got 22% of its output from Egypt, the biggest source of its production behind North America.

At the time of publication, the author held no positions in any of the stocks mentioned.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

Sarfaraz A. Khan is an independent capital market analyst and a finance writer. Khan earned an MBA from the University of Aberdeen in the U.K. His specialty is energy stocks. He also covers consumer goods, services sector, technology stocks, emerging markets and ETFs.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
APA $52.13 0.00%
OXY $75.57 0.00%
AAPL $95.18 0.00%
FB $117.43 0.00%
GOOG $692.36 0.00%


Chart of I:DJI
DOW 17,750.91 -140.25 -0.78%
S&P 500 2,063.37 -18.06 -0.87%
NASDAQ 4,763.2240 -54.37 -1.13%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs