Occidental Announces Results of Offer to Exercise Warrants at a Temporarily Reduced Price

Rhea-AI Summary

Occidental (NYSE: OXY) has announced the completion of its warrant exercise offer, which expired on March 31, 2025. The offer allowed warrant holders to exercise their warrants at a reduced price of $21.30 per warrant, compared to the standard exercise price of $22.00.

According to the final count by Equiniti Trust Company, 41,941,075 warrants were tendered, including 69,166 warrants under guaranteed delivery procedures. As a result, Occidental will issue 41,871,909 shares of common stock and receive $891.9 million in aggregate proceeds. An additional 69,166 shares and $1.5 million in proceeds are expected if all guaranteed deliveries are completed.

Warrants not tendered during this offer remain exercisable at the original price of $22.00 per warrant.

Positive

• Successful warrant exercise generating $891.9 million in immediate proceeds
• High participation rate with 41.9 million warrants tendered
• Additional $1.5 million potential proceeds from guaranteed deliveries

Negative

• Dilution of existing shareholders with issuance of 41.9 million new shares
• Discounted warrant exercise price reduces potential proceeds by $0.70 per warrant

Insights

Financial Analyst

Occidental's warrant exercise program has successfully raised $891.9 million in immediate capital through the conversion of 41.9 million warrants at a temporarily reduced price of $21.30 per warrant. This represents a $0.70 discount from the standard $22.00 exercise price – effectively trading a modest discount for accelerated capital raising.

The transaction achieves multiple financial objectives simultaneously. First, it provides a substantial cash infusion representing approximately 1.9% of OXY's $46.6 billion market capitalization. Second, it simplifies the company's capital structure by reducing the warrant overhang, which improves valuation clarity and potentially enhances trading dynamics.

While the issuance of approximately 42 million new shares creates dilution for existing shareholders, this dilution was inevitable as these warrants would eventually be exercised. By incentivizing early exercise, management has secured needed capital without resorting to debt markets or traditional equity offerings that might carry higher costs or greater market uncertainty.

The successful warrant conversion suggests institutional confidence in OXY's current valuation, as warrant holders would be reluctant to exercise if they anticipated significant share price deterioration. The timing indicates management is strategically optimizing its capital structure while market conditions remain favorable.

Without specific guidance on the intended use of proceeds, debt reduction seems the most probable application given industry volatility and OXY's historical focus on balance sheet strength.

Corporate Finance Strategist

This warrant exercise represents a well-executed financial engineering maneuver that strengthens Occidental's financial position. By offering the $0.70 discount on the exercise price, management effectively created a compelling value proposition for warrant holders while securing nearly $892 million in fresh capital with minimal friction.

The transaction's structure demonstrates sophisticated capital markets strategy. Rather than waiting for organic warrant exercises at the standard $22.00 price over time, this approach consolidated the capital raise into a defined window, providing predictability and immediate financial reinforcement. The 3.2% discount from standard exercise price represents an efficient cost of capital compared to alternative financing methods.

From a balance sheet perspective, this significantly enhances Occidental's financial flexibility without introducing new debt obligations or complex financial instruments. The removal of a substantial portion of outstanding warrants also reduces future dilution uncertainty that had been overhanging the stock.

While the article doesn't specify the intended capital allocation, this infusion creates optionality for management to potentially accelerate debt reduction, fund capital projects with attractive returns, or opportunistically pursue strategic initiatives. In the current macroeconomic environment of elevated interest rates, having this capital cushion provides competitive advantage.

The high participation rate in the offer (41.9 million warrants tendered) signals strong investor confidence in Occidental's medium-term prospects and validates management's approach to capital structure optimization.

HOUSTON, April 01, 2025 (GLOBE NEWSWIRE) -- Occidental (NYSE: OXY) today announced the results of its offer to exercise Occidental’s outstanding publicly traded warrants (the “Warrants”) at a temporarily reduced price of $21.30 per Warrant (the “Offer”). The Offer expired at 5:00 p.m. Eastern Time on March 31, 2025.

Based on the final count by Equiniti Trust Company, LLC, the depositary agent for the Offer, 41,941,075 Warrants were tendered and not validly withdrawn (including 69,166 Warrants tendered pursuant to the guaranteed delivery procedures available pursuant to the Offer). Occidental will issue 41,871,909 shares of Occidental’s common stock, $0.20 par value per share (“Common Stock”), and receive $891.9 million of aggregate proceeds in respect of the Warrants exercised, excluding the Warrants tendered pursuant to the guaranteed delivery procedures. If all of the guaranteed deliveries are consummated in accordance with the terms of the Offer, Occidental will issue an additional 69,166 shares of Common Stock and receive an additional $1.5 million of aggregate proceeds in respect of the Warrants tendered pursuant to guaranteed delivery. The Warrants that were not tendered and exercised in connection with the Offer remain in effect at an exercise price of $22.00 per Warrant.

The Offer was subject to the terms and conditions set forth in the Offer to Exercise Warrants to Purchase Common Stock of Occidental Petroleum Corporation, dated March 3, 2025, filed as an exhibit to Occidental’s Schedule TO filed with the U.S. Securities and Exchange Commission (“SEC”) on March 3, 2025.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy the Common Stock.

About Occidental
Occidental is an international energy company with assets primarily in the United States, the Middle East and North Africa. We are one of the largest oil and gas producers in the U.S., including a leading producer in the Permian and DJ basins, and offshore Gulf of America. Our midstream and marketing segment provides flow assurance and maximizes the value of our oil and gas, and includes our Oxy Low Carbon Ventures subsidiary, which is advancing leading-edge technologies and business solutions that economically grow our business while reducing emissions. Our chemical subsidiary OxyChem manufactures the building blocks for life-enhancing products. We are dedicated to using our global leadership in carbon management to advance a lower-carbon world.

Cautionary Statement Regarding Forward-Looking Statements

This press release contains forward-looking statements, including, but not limited to, statements about Occidental’s expectations, beliefs, plans or forecasts. All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including, but not limited to: any projections of earnings, revenue or other financial items or future financial position or sources of financing; any statements of the plans, strategies and objectives of management for future operations or business strategy; any statements regarding future economic conditions or performance; any statements of belief; and any statements of assumptions underlying any of the foregoing. Words such as “estimate,” “project,” “predict,” “will,” “would,” “should,” “could,” “may,” “might,” “anticipate,” “plan,” “intend,” “believe,” “expect,” “aim,” “goal,” “target,” “objective,” “commit,” “advance,” “likely” or similar expressions that convey the prospective nature of events or outcomes are generally indicative of forward-looking statements. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release unless an earlier date is specified. Unless legally required, Occidental does not undertake any obligation to update, modify or withdraw any forward-looking statements as a result of new information, future events or otherwise.

Forward-looking statements involve estimates, expectations, projections, goals, forecasts, assumptions, risks and uncertainties. Actual outcomes or results may differ from anticipated results, sometimes materially. Factors that could cause results to differ from those projected or assumed in any forward-looking statement include, but are not limited to: general economic conditions, including slowdowns and recessions, domestically or internationally; Occidental’s indebtedness and other payment obligations, including the need to generate sufficient cash flows to fund operations; Occidental’s ability to successfully monetize select assets and repay or refinance debt and the impact of changes in Occidental’s credit ratings or future increases in interest rates; assumptions about energy markets; global and local commodity and commodity-futures pricing fluctuations and volatility; supply and demand considerations for, and the prices of, Occidental’s products and services; actions by the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC oil producing countries; results from operations and competitive conditions; future impairments of Occidental’s proved and unproved oil and gas properties or equity investments, or write-downs of productive assets, causing charges to earnings; unexpected changes in costs; inflation, its impact on markets and economic activity and related monetary policy actions by governments in response to inflation; availability of capital resources, levels of capital expenditures and contractual obligations; the regulatory approval environment, including Occidental’s ability to timely obtain or maintain permits or other government approvals, including those necessary for drilling and/or development projects; Occidental’s ability to successfully complete, or any material delay of, field developments, expansion projects, capital expenditures, efficiency projects, acquisitions or divestitures; risks associated with acquisitions, mergers and joint ventures, such as difficulties integrating businesses, uncertainty associated with financial projections or projected synergies, restructuring, increased costs and adverse tax consequences; uncertainties and liabilities associated with acquired and divested properties and businesses; uncertainties about the estimated quantities of oil, natural gas liquids and natural gas reserves; lower-than-expected production from development projects or acquisitions; Occidental’s ability to realize the anticipated benefits from prior or future streamlining actions to reduce fixed costs, simplify or improve processes and improve Occidental’s competitiveness; exploration, drilling and other operational risks; disruptions to, capacity constraints in, or other limitations on the pipeline systems that deliver Occidental’s oil and natural gas and other processing and transportation considerations; volatility in the securities, capital or credit markets, including capital market disruptions and instability of financial institutions; government actions (including geopolitical, trade, tariff and regulatory uncertainties), war (including the Russia-Ukraine war and conflicts in the Middle East) and political conditions and events; health, safety and environmental (HSE) risks, costs and liability under existing or future federal, regional, state, provincial, tribal, local and international HSE laws, regulations and litigation (including related to climate change or remedial actions or assessments); legislative or regulatory changes, including changes relating to hydraulic fracturing or other oil and natural gas operations, retroactive royalty or production tax regimes, and deep-water and onshore drilling and permitting regulations; Occidental’s ability to recognize intended benefits from its business strategies and initiatives, such as Occidental’s low-carbon ventures businesses or announced greenhouse gas emissions reduction targets or net-zero goals; potential liability resulting from pending or future litigation, government investigations and other proceedings; disruption or interruption of production or manufacturing or facility damage due to accidents, chemical releases, labor unrest, weather, power outages, natural disasters, cyber-attacks, terrorist acts or insurgent activity; the scope and duration of global or regional health pandemics or epidemics, and actions taken by government authorities and other third parties in connection therewith; the creditworthiness and performance of Occidental’s counterparties, including financial institutions, operating partners and other parties; failure of risk management; Occidental’s ability to retain and hire key personnel; supply, transportation and labor constraints; reorganization or restructuring of Occidental’s operations; changes in state, federal or international tax rates; and actions by third parties that are beyond Occidental’s control.

Additional information concerning these and other factors that may cause Occidental’s results of operations and financial position to differ from expectations can be found in Occidental’s filings with the SEC, including Occidental’s Annual Report on Form 10-K for the year ended December 31, 2024, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.

Contacts

Media	Investors
Eric Moses 713-497-2017 eric_moses@oxy.com	R. Jordan Tanner 713-552-8811 investors@oxy.com

FAQ

How much did Occidental (OXY) raise from the warrant exercise offer in 2025?

Occidental raised $891.9 million from the warrant exercise, with potential for an additional $1.5 million from guaranteed deliveries.

What was the discount offered on OXY warrant exercise price in March 2025?

OXY offered a reduced exercise price of $21.30 per warrant, compared to the standard price of $22.00, representing a $0.70 discount.

How many new shares will OXY issue from the 2025 warrant exercise?

OXY will issue 41,871,909 shares, with potential for additional 69,166 shares from guaranteed deliveries.

What happens to unexercised OXY warrants after the March 2025 offer?

Unexercised warrants remain valid at their original exercise price of $22.00 per warrant.