Today's Paper Search Latest stories Traffic #Gazette200 Listen Digital Replica FAQs Weather Newsletters Most commented Obits Puzzles + Games Archive
ADVERTISEMENT
ADVERTISEMENT

Occidental Petroleum, owner of one of the most high-profile corporate jets in recent history, is ready to sell Anadarko Petroleum's planes in a bid to show it is serious about cost cuts.

At a time when activists are digging deeper in search of shareholder returns, the corporate jet has become a symbol of excess among some oil producers. In Occidental's case, it also allowed investors to track key moves in its fight for Anadarko.

To be clear, Occidental is not selling its own plane, which generated some speculation as executives flew to Paris; The Hague, Netherlands; and Omaha, Neb., in what became a very visible effort to line up backing for its acquisition of Anadarko Petroleum Corp. Occidental said this week that Anadarko's four planes would be on the company's hit list when the takeover closes.

Investors may have been impressed by the promise of cost cuts. Warren Buffett, who kicked $10 billion into the deal, has some other advice.

"If you use a company plane, it's a big way of running a billboard that I'm in town for something," Buffett said in a May 3 interview with CNBC.

Occidental has said it sees about $2 billion in annual cost cuts once it closes the Anadarko deal. The company's chief financial officer, Cedric Burgher, was quick to point out in a May 6 conference call the company could cut back on Anadarko's four planes.

"We don't think we need all of those, and we can reduce that along with obviously people in duplicate offices and real estate," Burgher said.

Representatives for Occidental and Anadarko declined to comment.

Most major explorers reduced their capital budgets after oil prices fell at the end of 2018, and shareholders took a hard stand against unfettered growth.

For U.S shale producers, reining in growth may not be enough to win back investors upset with an industry that for years burned through cash. Now, everything from executive pay to corporate jets and country club memberships are newly under fire as activists go a level deeper in demanding more returns for shareholders.

Earlier this year, wildcatter Floyd Wilson was kicked out as chief executive officer of Halcon Resources after hedge fund Fir Tree launched a campaign against the struggling producer's spending habits, calling out Wilson for flying private even after the company emerged from bankruptcy.

Business on 05/11/2019

Print Headline: Occidental proposes sale of corporate jets

ADVERTISEMENT

Sponsor Content

You must be signed in to post comments

Comments

ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT