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Western Midstream Partners LP (NYSE:WES) shares are volatile after the news of Occidental Petroleum Corp (NYSE:OXY) reportedly exploring a sale of its stake in the company to reduce debt.
Occidental owns 49% of Western Midstream and controls the company’s operations, which has a U.S. natural gas-focused pipeline operator with a market value of close to $20 billion (including debt), reported Reuters.
As per the report, JPMorgan is advising Occidental to extract the most value from its ownership of Western Midstream.
Western Midstream said in a statement that they are aware of “recent news coverage indicating that WES is working towards a sales process.”
The company added, “WES has not launched a sales process nor has it engaged bankers or other advisors with a view toward doing so. We are aware, as has been publicly stated, that Occidental Petroleum Corporation (“Oxy”) has expressed interest in divesting assets. We cannot speak to the composition of the assets Oxy may seek to divest, and any questions regarding Oxy’s ownership interest in WES should be directed to Oxy.”
In particular, the asset sale is projected to help Occidental reduce debt, which stood at $18.5 billion as of December 31, 2023.
Last week, during the earnings release call, Occidental reaffirmed its goal of reducing its debt to below $15 billion. Occidental reported earnings per share of 74 cents for the fourth quarter, which beat a Street consensus estimate of 71 cents per share.
Price Action: WES shares, which closed 5.69% higher at $30.81 yesterday, are down 1.56% at $30.33 premarket on the last check Wednesday.
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