Occidental CEO Hints at Prolonged Tenure as Breakup LoomsJoe Carroll
Occidental Petroleum Corp. Chief Executive Officer Stephen Chazen suggested he may extend his tenure at the largest oil producer in the continental U.S. beyond his planned retirement date at year-end.
Chazen, who succeeded longtime CEO Ray Irani in 2011, told investors and analysts on an earnings call today that Occidental directors probably will make an announcement on the search for a new leader next month. Chazen followed that by saying he expected to be participating in more quarterly earnings conference calls than he’d originally anticipated.
The board announced on April 29 that the 67-year-old Michigan State University-trained geologist would exit by the end of this year. Shareholders questioned the former CEO’s role in the decision and voted in May to oust Irani as chairman, ending his almost three decades of leadership at the Los Angeles-based explorer. A spokeswoman for Occidental declined to comment today on Chazen’s scheduled departure.
Chazen is seeking to turn around Occidental, whose shares have fallen 23 percent from an April 2011 high, by selling fields from North Dakota to the Persian Gulf and focusing on more profitable, less risky U.S. assets. The company said in October it expected to decide by the end of 2013 whether to split its operations in California into a separate company.
Occidental said it would await agreements on asset sales before deciding on a split. Negotiations with potential buyers won’t conclude before the end of June, according to a company slide presentation today.
Chazen’s “legacy is to shrink and restructure the business,” Brian Youngberg, an analyst at Edward Jones in St. Louis, said in a phone interview before today’s conference call. “Occidental and a number of other companies, in today’s environment, had gotten a little too far-flung.”
Occidental’s fourth-quarter net income more than quadrupled to $1.64 billion, or $2.04 a share, from $336 million, or 42 cents, a year earlier, the company reported today. Results in the prior period were affected by a $1.1 billion writedown mainly associated with lower gas prices. Per-share profit excluding one-time items was $1.72, beating the $1.67 average of 22 analysts’ estimates compiled by Bloomberg.
Production averaged the equivalent of 750,000 barrels of oil a day during the quarter, below the consensus estimate of 767,000, Tim Rezvan, an analyst for Sterne Agee Group Inc., wrote in a note to clients today.
Brent crude, the global benchmark, averaged $109.35 a barrel in the October-to-December period, 78 cents less than the same period last year. The average price of natural gas futures traded in New York rose 8.7 percent from a year earlier to $3.854 per million British thermal units.
Occidental gained 0.6 percent to $88.30 at the close in New York. The shares, which have 19 buy ratings and nine holds from analysts, have fallen 7.2 percent this year.