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Occidental Petroleum Corp. cut its dividend for the first time in at least 20 years as the oil explorer producer opts to conserve cash to cover debt incurred in its US$37 billion takeover of Anadarko Petroleum Corp.
The company trimmed its quarterly payout to 11 cents from 79 cents, according to a statement Tuesday. Occidental also trimmed capital spending for the year by 32 per cent to about US$3.6 billion.
The decision comes less than two weeks after Chief Executive Officer Vicki Hollub said the payout was “one of the defining characteristic of our company” and vowed to protect it.
Occidental is one of the most-exposed major oil explorers to declining crude prices because of the large debts it took on to outbid Chevron Corp. for Anadarko last year. The company had planned to sell US$15 billion worth of assets by the middle of this year to help reduce borrowings. But that’s looking more difficult now, given collapsing valuations in energy markets.
Shares were up 3.4 per cent at US$12.94 at 12:18 p.m. New York time.