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Occidental Petroleum to Sell Two Ghana Offshore Fields for $750M

Energy company Occidental Petroleum (OXY) has signed agreements to sell its assets in two offshore fields in Ghana for $750 million. Under the first deal, assets will be sold to the Ghana National Petroleum Corporation (GNPC) for $200 million, and the other deal reflects the sale of assets to Texas-based oil and gas firm Kosmos Energy Ltd. (KOS) for $550 million.

Occidental is involved in petrochemical manufacturing in Chile, Canada, and the U.S., and hydrocarbon exploration in Colombia, the Middle East, and the U.S.

The sale includes Occidental’s interests in the TEN and Jubilee fields, which together produced 22,000 barrels of oil equivalent per day (net) in the second quarter of 2021.

The sale to the GNPC is likely to close in the last quarter of 2021, while the sale to Kosmos was closed immediately upon signing the deal. (See Insiders’ Hot Stocks on TipRanks)

President and CEO of Occidental, Vicki Hollub, said, “With this transaction, we have achieved our post-Colombia divestiture target. Proceeds from the Ghana asset sale will be applied to debt reduction. Combined, our divestiture program and free cash flow generation have enhanced our ability to reduce debt, as evidenced by the $4.5 billion we have repaid year to date.”

The company’s shares lost 2.2% on Wednesday to close at $32.38.

Last week, Morgan Stanley (MS) analyst Devin McDermott maintained a Buy rating on the stock with a price target of $47 (45.6% upside potential).

The analyst expects the company to report a loss of $0.10 per share in the fourth quarter.

Overall, the stock has a Moderate Buy consensus rating based on 8 Buys, 3 Holds, and 1 Sell. The average Occidental Petroleum price target of $36.58 implies 13.3% upside potential. Shares have gained nearly 209% over the past year.

According to TipRanks’ Smart Score rating system, Occidental scores a “Perfect 10,” suggesting that the stock is likely to outperform market averages.

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