Oxy aims its sights at shareholders

Buried beneath the news about L.A.-based Occidental Petroleum selling its oil and gas operations in Argentina and buying oil and gas properties in Texas and North Dakota is word that the company will be raising its dividend by 21 percent, from $0.38 to $0.46 per quarter. Dividend raising is usually not a big deal, but Oxy's move is another reminder of how much the company focuses on shareholder value (ironic considering its overly generous payouts to CEO Ray Irani). I get into some of this stuff in my profile of the oil giant in the December issue of Los Angeles magazine. A sampler:

Anyone purchasing $100 worth of Oxy stock at the end of 2004 could have cashed out at the end of last August for $275. That same $100 invested in companies making up the S&P 500 stock index would be worth $97. Occidental is slavishly devoted to its stock, to the point where it tries to give investors $2 back for every dollar it keeps in earnings. That's an unusually rich pledge, which is another reason why Wall Street analysts like the company.

For all its success, however, Oxy is not an easy company to love.

It's boring. It's slow. It has no direct connection with consumers (Oxy doesn't sell gasoline--oil products are sold to other companies and then distributed at the retail level). It doesn't buy commercial time during the Super Bowl, and you won't find the company's name on a basketball arena. It has next to no civic visibility in its home base of Los Angeles--and little interest in pursuing any. Executive recruiters told Business Week last year that Oxy is "an autocratic environment where managers at the oil giant simply wait for dictates from on high." Two activist shareholders have complained that senior executives enjoy nearly free rein because of the board's "entrenchment and ossification."

The latest round of buying and selling will significantly bolster's Oxy's domestic reserves (also included is the purchase of Sempra Generation's 50 percent stake in its Elk Hills Power Plant in California). From the LAT:

"There are some good domestic oil reserves out there, but some companies already involved can't exploit them as much as they would like because they don't have the cash," said Brian Youngberg, an oil analyst with Edward Jones and Co. in St. Louis. "Occidental was well positioned to acquire some of that acreage to accelerate development and speed up production."

Oxy shares are up 1.5 percent, to $92.40.