Occidental Petroleum Moving Forward On California Spinoff With Form 10 and New Leadership

Occidental Petroleum (OXY) is making progress on its upcoming California asset spinco. The company recently began filling out the leadership team at California Resources Company and it’s worth noting that it turned to company veterans to fill the top posts. Todd Stevens, currently VP of Corporate Development, will become President and CEO and William Albrecht, President of the company’s America’s Operations, will become Executive Chairman. Mr. Stevens is a 19 year vet at the company and had previously held a senior position within the company’s California operations so both men will be very familiar with these assets.

The new leadership announcement comes just about month after the company released its initial Form 10 filing. I haven’t had a chance to go through it in depth yet, but these filings are must reads for a better understanding of the company’s business, assets and financial performance. A quick glance reveals that the company plans to ‘maximize shareholder returns by accelerating production growth profitably through the development of our high-growth unconventional assets and low-risk conventional asset[s]’. This plan took an early hit when the EIA slashed its estimate of recoverable reserves in California’s Monterey Shale by 96%. Apparently the rock formation in the Monterey Shale is different than the rock in other parts of the country and is much more difficult to access. Recoverable estimates from 2012 had targeted 13.7 billion barrels of recoverable oil, but after further study, that number was cut down to just 600 million barrels. Whoops. It is worth noting that some new technology or drilling method could make all of the reserves accessible, but California would likely ban it anyways (joking…well…maybe half joking?).

We will keep you updated as additional progress is made on this spinoff.

Disclosure: Author holds no position in any stock mentioned.