Mar 7, 2022 - Economy & Business

Buffett buys into oil giant as Icahn exits

Someone holding a barrel of oil on their finger

Illustration: Aïda Amer/Axios

Warren Buffett moved big into one of the country's largest oil companies, Occidental Petroleum, just as Carl Icahn hit the exits.

Why it matters: This comes as oil prices Monday hit a 14-year high, as both the U.S. and EU consider bans on Russian imports.

Buying in: Buffett's Berkshire Hathaway on Friday disclosed that it bought 91.2 million Occidental shares, on top of existing warrants to buy another 83.9 million shares. If it were to exercise its warrants, Berkshire's stake would climb to 17% from 9%.

  • Berkshire's warrants are exercisable at $59.62 a piece.
  • Occidental shares opened last Monday at $38.53 and closed Friday at $56.15. They opened up higher this morning.

Selling out: Carl Icahn fully exited what once was a 10% stake in Occidental, which he began building in 2019 as opposition to the company's highly-leveraged, $38 billion buyout of Anadarko Petroleum.

  • His two board reps at Occidental also resigned.
  • Icahn is estimated to have earned around $1 billion off his Occidental investment, but may regret not holding on for a few more days.
  • And, just to square the circle, Berkshire got its aforementioned warrants by helping to finance the Anadarko deal that Icahn despised.

Meanwhile, there are reports that Oasis Petroleum and Whiting Petroleum are nearing an all-stock merger that could value the combined North Dakota shale drillers at around $6 billion.

The bottom line: Oil price volatility isn't tamping down on oil industry deal making.

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