Occidental (NYSE: OXY) today announced the early tender results of
its offers to purchase for cash (collectively, the “Tender Offers”
and each a “Tender Offer”) its outstanding 2.600% Senior Notes due
2021 (the “2.600% 2021 Notes”), 3.125% Senior Notes due 2022 (the
“3.125% 2022 Notes”), 2.600% Senior Notes due 2022 (the “2.600%
2022 Notes”), 2.700% Senior Notes due 2022 (the “2.700% 2022
Notes”) and 2.70% Senior Notes due 2023 (the “2.70% 2023 Notes”
and, together with the 2.600% 2021 Notes, 3.125% 2022 Notes, 2.600%
2022 Notes and 2.700% 2022 Notes, the “Notes”). In connection
therewith, Occidental further announced that it is increasing the
maximum aggregate purchase price of Notes it will accept for
purchase, excluding accrued but unpaid interest (as amended herein,
the “Maximum Aggregate Purchase Price”), from the previously
announced amount of $2 billion to $2.3 billion. The maximum
aggregate purchase price to be paid by Occidental for the 2.70%
2023 Notes, excluding accrued but unpaid interest, is limited to
$500 million (the “Sub-Cap”).
The Tender Offers and Consent Solicitations (as
defined below) are being made pursuant to the terms and subject to
the conditions described in Occidental’s Offer to Purchase and
Consent Solicitation Statement, dated December 7, 2020, as amended
by a press release issued by Occidental on December 8, 2020, and as
further amended by this press release (the “Offer to Purchase”).
Capitalized terms used but not defined herein have the meanings
ascribed thereto in the Offer to Purchase.
The Tender Offers and Consent Solicitations are
subject to, and conditioned upon, the satisfaction or waiver of
certain conditions described in the Offer to Purchase, including
the receipt of proceeds by Occidental from an issuance of senior
unsecured debt securities (the “Concurrent Offering”) with an
aggregate principal amount of at least $2 billion, on terms and
subject to conditions reasonably satisfactory to Occidental (the
“Financing Condition”). As set forth in the Offer to Purchase,
Occidental reserves the right, but is under no obligation, to
further increase the Maximum Aggregate Purchase Price or the
Sub-Cap, or amend the Financing Condition, at any time, subject to
compliance with applicable law.
According to the information received from Global
Bondholder Services Corporation, the Tender Agent and Information
Agent for the Tender Offers and Consent Solicitations, as of 5:00
p.m., New York City time, on December 18, 2020 (such date and time,
the “Early Tender Time”), Occidental had received valid tenders
from holders of the Notes as outlined in the table below.
Series of Notes |
|
CUSIP Number/ISIN |
|
AggregatePrincipal
AmountOutstanding ($) |
|
Acceptance Priority Level |
|
AggregatePrincipal
AmountTendered ($) |
|
AggregatePrincipal
AmountAccepted for Purchase ($) |
|
Total Consideration(1)(2)
($) |
|
Proration Factor (3) |
2.600% Senior Notes due 2021 |
|
674599CU7 / US674599CU76 |
|
$350,095,000 |
|
1 |
|
$126,274,000 |
|
$126,274,000 |
|
$1,012.50 |
|
100% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3.125% Senior Notes due 2022 |
|
674599CC7 / US674599CC78 |
|
$813,690,000 |
|
2 |
|
$537,991,000 |
|
$537,991,000 |
|
$1,017.50 |
|
100% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2.600% Senior Notes due 2022 |
|
674599CK9 / US674599CK94 |
|
$228,645,000 |
|
3 |
|
$127,540,000 |
|
$127,540,000 |
|
$1,005.00 |
|
100% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2.700% Senior Notes due 2022 |
|
674599CP8 / US674599CP81 |
|
$1,898,445,000 |
|
4 |
|
$1,269,325,000 |
|
$1,269,325,000 |
|
$1,012.50 |
|
100% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2.70% Senior Notes due 2023 |
|
674599CE3 / US674599CE35 |
|
$1,139,042,000 |
|
5 |
|
$411,265,000 |
|
$212,434,000 |
|
$995.00 |
|
51.7% |
|
|
|
(1) |
Does not include accrued but unpaid interest, which
will also be payable as provided in the Offer to Purchase. |
(2) |
Includes the Early Tender Premium (as defined
below). |
(3) |
Rounded to the nearest tenth of a percentage
point. |
The purchase of all Notes validly tendered and not validly
withdrawn in the Tender Offers would cause Occidental to purchase
an aggregate principal amount of Notes that would result in a
maximum aggregate purchase price, excluding accrued but unpaid
interest, in excess of the Maximum Aggregate Purchase Price.
Accordingly, Occidental has accepted for purchase 2.70% 2023
Notes, and all Notes with a higher Acceptance Priority Level; the
2.70% 2023 Notes will be purchased on a pro rata basis up to
the Maximum Aggregate Purchase Price. As the Tender Offers were
fully subscribed up to the Maximum Aggregate Purchase Price as of
the Early Tender Time, holders who validly tender Notes after the
Early Tender Time will not have any of such Notes accepted for
payment unless Occidental further increases the Maximum Aggregate
Purchase Price. The early settlement date for Notes validly
tendered and not validly withdrawn at or prior to the Early Tender
Time and accepted for purchase will be December 22, 2020 (the
“Early Settlement Date”), subject to the satisfaction or waiver of
all conditions to the Tender Offers and Consent Solicitations
described in the Offer to Purchase.
Holders of Notes that were validly tendered and
not validly withdrawn at or prior to the Early Tender Time and have
been accepted for purchase pursuant to the applicable Tender Offer
will receive the applicable Total Consideration for each series of
Notes as set forth in the table above, which includes the early
tender premium of $50 per $1,000 principal amount of Notes (the
“Early Tender Premium”), together with accrued but unpaid interest
on such Notes from the last interest payment date with respect to
such Notes to, but not including, the Early Settlement Date. The
Tender Offers and Consent Solicitations will expire at 11:59 p.m.,
New York City time, on January 5, 2020, unless earlier extended or
terminated by Occidental.
As part of the Tender Offers, Occidental also
solicited consents (the “Consent Solicitations”) from holders of
the Notes for certain proposed amendments described in the Offer to
Purchase that would, among other things, eliminate certain of the
restrictive covenants contained in the indenture for the related
series of Notes (the “Proposed Amendments”). Adoption of the
Proposed Amendments with respect to each series of Notes requires
the requisite consent applicable to each series of Notes as
described in the Offer to Purchase (the “Requisite Consent”). As of
the Early Tender Time, holders of $126,274,000 aggregate principal
amount of the 2.600% 2021 Notes and $1,269,325,000 aggregate
principal amount of the 2.700% 2022 Notes, representing
approximately 62.07% of the outstanding 2.600% 2021 Notes and
2.700% 2022 Notes, taken together as a single class, $537,991,000
aggregate principal amount of the 3.125% 2022 Notes, representing
approximately 66.12% of the outstanding 3.125% 2022 Notes, and
$127,540,000 aggregate principal amount of the 2.600% 2022 Notes,
representing approximately 55.78% of the outstanding 2.600% 2022
Notes, had validly tendered their 2.600% 2021 Notes, 2.700% 2022
Notes, 3.125% 2022 Notes and 2.600% 2022 Notes, respectively, and
were deemed to have delivered their consents to the Proposed
Amendments with respect to such series of Notes by virtue of such
tender. As a result, the Requisite Consent required to approve the
Proposed Amendments with respect to the 2.600% 2021 Notes, 2.700%
2022 Notes, 3.125% 2022 Notes and 2.600% 2022 Notes has been
received, and the Company intends to execute supplemental
indentures to the indentures governing such series of Notes on the
Early Settlement Date. The Requisite Consent required to approve
the Proposed Amendments with respect to the 2.70% 2023 Notes was
not obtained by the Company and, therefore, the indenture governing
such Notes will not be amended and will remain in effect in its
present form.
RBC Capital Markets, LLC, J.P. Morgan Securities
LLC, Barclays Capital Inc., HSBC Securities (USA) Inc., and SG
Americas Securities, LLC are the lead Dealer Managers and lead
Solicitation Agents in the Tender Offers and Consent Solicitations,
and BofA Securities, Inc., MUFG Securities Americas Inc. and SMBC
Nikko Securities America, Inc. are the co-Dealer Managers and
co-Solicitation Agents in the Tender Offers and Consent
Solicitations. Global Bondholder Services Corporation has been
retained to serve as the Tender Agent and Information Agent for the
Tender Offers and Consent Solicitations. Persons with questions
regarding the Tender Offers and Consent Solicitations should
contact RBC Capital Markets, LLC at (toll free) (877) 381-2099 or
(US) (212) 618-7843, J.P. Morgan Securities LLC at (toll free)
(866) 834-4666 or (collect) (212) 834-2045, Barclays Capital Inc.
at (toll-free) (800) 438-3242 or (collect) (212) 528-7581, HSBC
Securities (USA) Inc. at (toll free) (888) HSBC-4LM or (collect)
(212) 525-5552 or SG Americas Securities, LLC at (toll free) (855)
881-2108 or (collect) (212) 278-7886. Requests for the Offer to
Purchase should be directed to Global Bondholder Services
Corporation at (banks or brokers) (212) 430-3774 or (toll free)
(866) 807-2200 or by email to contact@gbsc-usa.com.
None of Occidental, the Dealer Managers and
Solicitation Agents, the Tender Agent and Information Agent, the
trustee under the indentures governing the Notes or any of their
respective affiliates is making any recommendation as to whether
holders should tender any Notes in response to the Tender Offers
and Consent Solicitations. Holders must make their own decision as
to whether to participate in the Tender Offers and Consent
Solicitations and, if so, the principal amount of Notes as to which
action is to be taken.
This press release shall not constitute an offer
to sell, a solicitation to buy or an offer to purchase or sell any
securities. Neither this press release nor the Offer to Purchase is
an offer to sell or a solicitation of an offer to buy debt
securities in the Concurrent Offering or any other securities. The
Tender Offers and Consent Solicitations are being made only
pursuant to the Offer to Purchase and only in such jurisdictions as
is permitted under applicable law. In any jurisdiction in which the
Tender Offers are required to be made by a licensed broker or
dealer, the Tender Offers will be deemed to be made on behalf of
Occidental by the Dealer Managers, or one or more registered
brokers or dealers that are licensed under the laws of such
jurisdiction.
About Occidental
Occidental is an international energy company with operations in
the United States, Middle East, Africa and Latin America. We are
one of the largest oil producers in the U.S., including a leading
producer in the Permian and DJ basins, and offshore Gulf of Mexico.
Our midstream and marketing segment provides flow assurance and
maximizes the value of our oil and gas. Our chemical subsidiary
OxyChem manufactures the building blocks for life-enhancing
products. Our Oxy Low Carbon Ventures subsidiary is advancing
leading-edge technologies and business solutions that economically
grow our business while reducing emissions. We are committed to
using our global leadership in carbon dioxide management to advance
a lower-carbon world. Visit oxy.com for more information.
Cautionary Statement Concerning
Forward-Looking Statements
This press release contains forward-looking statements that
involve risks and uncertainties that could materially affect
expected results of operations, liquidity, cash flows and business
prospects. Actual results may differ from anticipated results,
sometimes materially, and reported results should not be considered
an indication of future performance. Factors that could cause the
results to differ include, but are not limited to: the scope and
duration of the COVID-19 pandemic and actions taken by governmental
authorities and other third parties in response to the pandemic;
our indebtedness and other payment obligations, including the need
to generate sufficient cash flows to fund operations; our ability
to successfully monetize select assets, repay or refinance our debt
and the impact of changes in our credit ratings; assumptions about
energy markets; global and local commodity and commodity-futures
pricing fluctuations, such as the sharp decline in crude oil prices
that occurred in the first half of 2020; supply and demand
considerations for, and the prices of, our products and services;
actions by the Organization of Petroleum Exporting Countries
(“OPEC”) and non-OPEC oil producing countries; results from
operations and competitive conditions; future impairments of our
proved and unproved oil and gas properties or equity investments,
or write-downs of productive assets, causing charges to earnings;
unexpected changes in costs; availability of capital resources,
levels of capital expenditures and contractual obligations; the
regulatory approval environment, including our ability to timely
obtain or maintain permits or other governmental approvals,
including those necessary for drilling and/or development projects;
our ability to successfully complete, or any material delay of,
field developments, expansion projects, capital expenditures,
efficiency projects, acquisitions or dispositions; risks associated
with acquisitions, mergers and joint ventures, such as difficulties
integrating businesses, uncertainty associated with financial
projections, 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
and natural gas liquids reserves; lower-than-expected production
from development projects or acquisitions; our ability to realize
the anticipated benefits from prior or future streamlining actions
to reduce fixed costs, simplify or improve processes and improve
our competitiveness; exploration, drilling and other operational
risks; disruptions to, capacity constraints in, or other
limitations on the pipeline systems that deliver our oil and
natural gas and other processing and transportation considerations;
general economic conditions, including slowdowns, domestically or
internationally, and volatility in the securities, capital or
credit markets; uncertainty from the expected discontinuance of
LIBOR and transition to any other interest rate benchmark;
governmental actions and political conditions and events;
legislative or regulatory changes, including changes relating to
hydraulic fracturing or other oil and natural gas operations,
retroactive royalty or production tax regimes, deepwater and
onshore drilling and permitting regulations, and environmental
regulation (including regulations related to climate change);
environmental risks and liability under international, provincial,
federal, regional, state, tribal, local and foreign environmental
laws and regulations (including remedial actions); potential
liability resulting from pending or future litigation; disruption
or interruption of production or manufacturing or facility damage
due to accidents, chemical releases, labor unrest, weather, natural
disasters, cyber-attacks or insurgent activity; the
creditworthiness and performance of our counterparties, including
financial institutions, operating partners and other parties;
failure of risk management; our ability to retain and hire key
personnel; reorganization or restructuring of our operations;
changes in state, federal or foreign tax rates; and actions by
third parties that are beyond our control.
Words such as “estimate,” “project,” “predict,” “will,” “would,”
“should,” “could,” “may,” “might,” “anticipate,” “plan,” “intend,”
“believe,” “expect,” “aim,” “goal,” “target,” “objective,” “likely”
or similar expressions that convey the prospective nature of events
or outcomes generally indicate forward-looking statements. You
should not place undue reliance on these forward-looking
statements, which speak only as of this press release. Unless
legally required, we undertake no obligation to update, modify or
withdraw any forward-looking statements, as a result of new
information, future events or otherwise. Factors that could cause
actual results to differ and that may affect Occidental’s results
of operations and financial position appear in Part I, Item 1A
“Risk Factors” of Occidental’s Annual Report on Form 10-K for the
year ended December 31, 2019, and in Occidental’s other filings
with the U.S. Securities and Exchange Commission.
Contacts |
|
Media |
Investors |
Melissa E. Schoeb |
Jeff Alvarez |
713-366-5615 |
713-215-7864 |
melissa_schoeb@oxy.com |
jeff_alvarez@oxy.com |
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