Company News

UPDATE 1-Occidental to slash dividend, spending as oil prices crash

(Adds Occidental-Anadarko deal background)

March 10 (Reuters) - Occidental Petroleum Corp said on Tuesday it would cut its dividend by over 86% and lower spending, as oil producers scramble to reassure investors that they can remain profitable in one of the worst oil slumps in history.

Occidental last year made an enormous bet on continued growth of U.S. shale with its $38 billion purchase of Anadarko Petroleum.

The deal was heavily criticized as it saw Occidental’s debt quadruple to around $40 billion and saw the company offer preferred shares to billionaire investor Warren Buffett to secure financing to avoid a shareholder vote on the transaction.

Since then, the company’s shares have sunk 80%, taking the oil producer’s total market value to about $12 billion.

Occidental said it would slash its quarterly dividend to 11 cents per share from 79 cents.

The company said it will lower 2020 capital spending to between $3.5 billion and $3.7 billion, from its earlier forecast of between $5.2 billion and $5.4 billion and will implement additional cost-cutting measures. (Reporting by Shariq Khan in Bengaluru; Editing by Maju Samuel)