Occidental's CrownRock Deal Delayed But Sees Permian Basin Production Boost
Portfolio Pulse from Lekha Gupta
Occidental Petroleum Corporation's (NYSE:OXY) acquisition of CrownRock LP is now expected to close in the third quarter of FY24, delayed from the initial Q1 2024 expectation. Despite this, Occidental plans to boost Permian Basin production by 18,000 barrels per day in the second half of 2024. In Q1, Occidental beat EPS estimates but missed on sales. The stock can be accessed through ETFs like OILT and FTXN.
May 09, 2024 | 10:11 am
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POSITIVE IMPACT
First Trust Nasdaq Oil & Gas ETF (FTXN) offers another avenue for investors to access Occidental's stock, potentially benefiting from Occidental's operational strategies.
FTXN, by including Occidental in its holdings, could experience positive price action following Occidental's earnings beat and ambitious production plans. The effect on FTXN might be moderated by the ETF's portfolio diversification.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 50
POSITIVE IMPACT
Investors can gain exposure to Occidental Petroleum through the Texas Capital Texas Oil Index ETF (OILT), which may be impacted by Occidental's performance.
As OILT provides exposure to Occidental, the ETF could see positive movement based on Occidental's strategic plans for production increase and its recent earnings beat. However, the impact might be diluted due to the diversified nature of the ETF's holdings.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 50
POSITIVE IMPACT
Occidental's acquisition of CrownRock delayed to Q3 FY24, but it plans to boost Permian Basin production. Q1 EPS beat estimates, though sales missed.
The delay in the CrownRock acquisition might initially concern investors, but the planned production increase and Q1 EPS beating estimates are positive signals for Occidental's operational efficiency and financial health. The sales miss could be a minor setback, but the overall positive outlook and strategic expansion in the Permian Basin suggest a potential upside for the stock.
CONFIDENCE 85
IMPORTANCE 90
RELEVANCE 100