Warren Buffett, the renowned billionaire investor, has further increased his stake in Occidental Petroleum through his company Berkshire Hathaway Inc. According to a recent regulatory filing, Berkshire Hathaway has acquired an additional 2.95 million shares of the U.S. oil producer, bringing Buffett’s total ownership in Occidental’s common stock to nearly 29 per cent.
The details of this acquisition were disclosed in a filing with the U.S. Securities and Exchange Commission on Monday. The document revealed that Berkshire Hathaway had made three separate purchases of Occidental shares since the previous Thursday, investing approximately USD 176 million in total for these transactions.
As a result of these recent acquisitions, Berkshire Hathaway now holds about 255.3 million Occidental common shares. This substantial stake is valued at approximately USD 15.37 billion based on Monday’s market prices. It’s worth noting that Buffett’s purchases of Occidental shares this month alone have amounted to 5.5 million shares.
This latest move comes in the context of Berkshire Hathaway receiving U.S. regulatory approval in August 2022 to acquire up to 50 per cent of Occidental. However, despite this authorisation, Buffett has publicly stated that he has no intentions of acquiring the Houston-based company outright.
The consistent accumulation of Occidental shares by Berkshire Hathaway has caught the attention of analysts and investors. Many have speculated that a potential acquisition of Occidental could serve to diversify Berkshire’s energy portfolio, which already includes several utilities, electricity distributors, and renewable power projects.
Occidental Petroleum itself has been expanding its operations. In a significant move last year, the Houston, Texas-based company acquired CrownRock, a Permian shale oil producer, in a deal valued at USD 12 billion. This acquisition was aimed at strengthening Occidental’s presence in the Permian Basin, which is recognised as the largest oilfield in the United States.
In addition to his common stock holdings, Buffett also possesses warrants that give him the right to purchase another 83.5 million shares of Occidental for USD 59.62 per share. This strike price is notably below Occidental’s closing price of USD 60.20 on Monday, potentially offering additional value to Berkshire Hathaway.
Occidental’s stock performance has been relatively stable this year, with shares gaining about 1 per cent since the beginning of the year. Following the news of Buffett’s increased stake, Occidental’s shares showed a marginal increase in pre-market trading on Tuesday.
This continued investment in Occidental Petroleum by Warren Buffett and Berkshire Hathaway underscores their confidence in the oil producer’s potential and their strategic interest in the energy sector. It also highlights the ongoing consolidation and strategic positioning taking place within the U.S. oil industry, particularly in the wake of global energy market fluctuations and the increasing focus on energy security.