Occidental Petroleum Corp (OXY)

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Occidental Petroleum's (OXY) debt situation raises potential risk for shareholders
By: Investing | October 30, 2023

Warren Buffett's stance on risk has highlighted the need for a thorough examination of Occidental Petroleum Corporation's (NYSE:OXY) debt status, which could present substantial risks to its shareholders. As of June 2023, the company's net debt stands at $18.6 billion, showing a decrease from the previous year's $22 billion. This figure takes into account cash reserves amounting to $486 million.

The company is faced with short-term liabilities of $7.15 billion, due within a year, and long-term liabilities amounting to $34.6 billion. The value of Occidental Petroleum's cash and near-term receivables is estimated at $3.33 billion, which creates a significant imbalance compared to its liabilities.

Despite Occidental Petroleum's considerable market capitalization of $55.1 billion, the company's financial situation could potentially lead to shareholder dilution. This arises from the possibility that the company may issue more shares to raise capital in order to manage its debt, which would reduce the proportionate ownership of existing shareholders.

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