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Tuesday, October 7, 2014

Oxy sale of Bakken assets would make strategic sense -analysts, (NYSE: OXY)

Any sale of Occidental Petroleum Corp's roughly 330,000 acres in North Dakota's oil-rich Bakken shale formation would make strategic sense for the company, which is likely eager to strike a deal, two analysts said on Tuesday. Oxy is looking to sell its Bakken holdings, which are largely undeveloped, for as much as $3 billion, according to a report from Bloomberg News.Even with the recent dip in crude oil prices, the divestment "makes sense to us, strategically," Raymond James analysts Pavel Molchanov and Kevin Smith said in a note to clients on Tuesday."This is substantially undeveloped acreage, and Occidental has long cited it as a likely monetization candidate, so it's been puzzling why the company kept it this long," the analysts said.Oxy is spending about $510 million this year on its North Dakota holdings, and any buyer would have to invest significant capital to boost production. Currently, Oxy is the 18th-largest oil producer in North Dakota with about 17,000 barrels per day as of July, trailing peers of the same size and even much-smaller rivals.

Occidental Petroleum Corporation (Occidental) conducts its operations through various subsidiaries and affiliates. Shares of OXY fell by 2.28% or $-2.21/share to $94.87. In the past year, the shares have traded as low as $85.90 and as high as $105.64. On average, 3537270 shares of OXY exchange hands on a given day and today's volume is recorded at 5334660.