Occidental Petroleum Credit Agreement

Cravath represented JPMorgan Chase Bank, N.A. under the agreement of a five-year, $3 billion unsecured credit facility, made available to Occidental Petroleum Corporation Occidental, and closed the March quarter with $1.8 billion in payment and equivalents, and the full availability of its $3.0 billion unsecured credit facility (expected in January 2003). A significant portion of the cash is held and available for use in the United States, and the credit facility does not contain significant clauses regarding adverse modifications or outflows that could limit Western`s ability to borrow under the facility. As of March 31, 2019, the Company reports long-term debt of $10.2 billion and short-term debt of $116 million. Future maturities for long-term bonds include $116 million in 2019, $1.2 billion in 2021 and 2022 and $1.2 billion in 2023. As a result, Western has more than adequate liquidity in relation to short-term debt maturities. The remaining deadlines for priority grades are well distributed between 2025 and 2048. On May 10, we negatively undervalued Occidental Petroleum`s A grade. This was done following the final merger agreement of 9 May, announced by Occidental Petroleum and Anadarko Petroleum (unvalued) for Occidental, in order to purchase Anadarko in a cash and equity transaction of 78%/22% under the terms of the revised proposal (5 May) of Occidental. On June 3, the U.S. Federal Trade Commission granted an early end to the wait time under the Hart-Scott-Rodino Act.

Pending approval by Anadarko Occidental shareholders, the transaction is expected to close in the second half of 2019. The main drivers of Western`s short-term growth are the launch of oil and gas extraction from the company`s unconventional gas and cultivation projects in Al Hosn in the United Arab Emirates and Oman. From an operational perspective, Anadarko`s operations are located in the Delaware segment of the Perm Basin or near western facilities, which should create excellent synergies. In addition, Western will receive Anadarko`s portfolio of deepwater companies in the Gulf of Mexico, DJ Basin (Colorado) holdings and development of the Powder River Basin (Wyoming). Western is not active in these areas. The upcoming sale of Anadarko`s African assets should allow Occidental to focus integration efforts on assets that the company considers to be the most valuable for its growth strategy. Including the stock of asset sales and the preferred capital contribution, both of which depend on the closing of the transaction, we expect the 12-month gross debt-to-TRAIL ratio to EBITDAX, 1.0 times on March 31 for the planned acquisition, to more than double to 2.3 times pro forma and exclude any potential synergy.

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