Berkshire Hathaway, under the leadership of Warren Buffett, has expanded its investment in Occidental Petroleum following a significant drop in the oil and gas producer's stock value. Shares of Occidental have fallen nearly 32% from their all-time high reached last April, with a 17% decline noted in 2024 as oil prices weakened. During a broad market pullback in late December, Berkshire Hathaway seized the opportunity to purchase 8.9 million shares of Occidental, reaffirming its position as the company's largest investor.
Occidental Petroleum remains the sixth-largest equity holding for Berkshire Hathaway, which now holds a 28.2% stake in the company. According to a regulatory filing, Berkshire acquired an additional 763,017 shares of Occidental on Friday, investing $35.7 million. This decision aligns with Buffett's previous statement that his interest in Occidental was piqued after reading a transcript of the company's earnings conference call.
Occidental Petroleum offers a 1.8% dividend yield and is actively investing in a carbon capture business, which may have influenced Berkshire's continued interest. Speculation regarding a potential takeover surfaced after Berkshire received regulatory approval to acquire up to a 50% stake in Occidental. However, Warren Buffett has clarified that he does not intend to take full control of the company, which was founded by legendary oilman Armand Hammer.
In addition to its common stock holdings, Berkshire Hathaway owns $10 billion of Occidental preferred stock and holds warrants to purchase an additional 83.9 million common shares for $5 billion, priced at $59.62 each. These warrants were obtained as part of a strategic deal in 2019 that facilitated Occidental's acquisition of Anadarko Petroleum.
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