Thursday, October 2, 2014

For The Archives: OXY USA Spin-Off Of California Assets Approved -- October 2, 2014

Occidental Petroleum Corporationannounced today that its Board of Directors has approved the spin-off of its California oil and gas business into an independent and separately traded company, California Resources Corporation.
The companies will be separated through the distribution of approximately 80.1 percent of the outstanding shares of California Resources to holders of Occidental common stock. Subject to the satisfaction of the conditions to the spin-off, the distribution is expected to occur on November 30, 2014. Occidental shareholders will receive 0.4 shares of California Resources common stock for every one share of Occidental common stock held at the close of business November 17, 2014, the record date for the distribution.
Comments are important.


  1. I wonder why the complexity of share amounts and such? Why not just make an asset split and have a share in each company for the shareholders? Then they would trade indepently. of course the value per share would change for the parent but so what. Would think that would be simplest split. and most tax advantaged.

    P.s. look how well COP has done since they split with DD.

  2. Greetings, Mr Oksol. This comment is related to the California oil potential, and it is peculiar to say the least.
    We all well remember the media hoopla a few months back at the end of May about the Monterey shale being downsized in potential to very minimal resource. Well, the EIA NEVER came out with a report or official announcement. I was waiting to see the official data, and it has never come out. I emailed the EIA a few weeks ago and they responded with a very brief statement that the EIA has never made an announcement regarding the TRR of the Monterey Shale. Very odd.

    1. TRR: technical recoverable resources.

      Yes, that is very odd. I have several posts, but this will take you direct to the article in which the Feds "took the Monterey shale" off the table as having any potential:

      Now the interesting thing: the article says that it was expected that the US EIA would make an official announcement one month after that article was published. From the article:

      "The new estimate, expected to be released publicly next month, is a blow to the nation's oil future ...."

      So, the question, if the e-mail you received back from the EIA said they never made an announcement....but here it is:

      "The Energy Information Administration (EIA) has cut its estimate of recoverable oil in California's Monterey Shale to 600 million bbl, a 96% decrease from previous estimates, an agency spokesman told NGI's Shale Daily Wednesday.

      The revised number comes nearly three years after EIA had estimated Lower 48 technically recoverable shale oil resources at 23.9 billion bbl, including 15.4 billion bbl in the Monterey/Santos play, then believed to be the nation's largest shale oil formation (see Shale Daily, July 11, 2011). A year later, in its Annual Energy Outlook 2013 (AEO2013), the agency estimated technically recoverable oil in the Monterey at 13.7 billion bbl (see Shale Daily, July 24, 2012).

      But changes to technically recoverable resources (TRR) estimates "do not necessarily have significant implications for projected oil and natural gas production, which are heavily influenced by economic considerations that do not enter into the estimation of TRR," an EIA spokesman told NGI."

      The source:

      May 21, 2014.

    2. So, one goes to AEO2014 in which the EIA was supposed to make the announcement on the Monterey.

      Here's the link to the AEO2014:

      I downloaded the 269-page pdf and did a word search of "Monterey" -- "Monterey showed up once -- in a foothill, lumped with all the other "tight shales" -- Bakken, Eagle Ford, etc.

      If that's accurate -- that Monterey is not in the AEO2014, then for some reason the EIA did not officially release what they had said "unofficially" just a month or two earlier.

      Yes, it is quite odd.

      Interestingly, even the Bakken is mentioned hardly at all; much more time is spent on the Eagle Ford. Yes, very odd.