Berkshire Hathaway CEO Warren Buffett.
Saul Loeb/AFP via Getty Images
Berkshire Hathaway continued its aggressive purchases of the shares of Occidental Petroleum this week, lifting its stake in the big energy company to $6.9 billion, according to a filing Friday evening.
The buying reflects the enthusiasm of
Berkshire Hathaway
(ticker: BRK/A, BRK/B) CEO Warren Buffett for
Occidental Petroleum
(OXY), which has staged a major recovery along with the surge in oil and natural gas prices.
Berkshire bought 27.1 million shares of Occidental worth about $1.6 billion from Wednesday through Friday. The bulk of the purchases–some 24 million shares–occurred Wednesday when volume spiked to 134 million shares, above the average of 20 million in the past year.
Berkshire now holds 118.3 million shares of Occidental, a 12.7% stake. Because Berkshire owns more than 10% of the company, it needs to report transactions in Occidental stock within two business days.
Barron’s reported Thursday that there was speculation that Berkshire was purchasing Occidental stock on Wednesday. Berkshire also holds 83.9 million warrants to purchase Occidental stock at a strike price of $59.62. Occidental shares ended Friday at $57.95, down 18 cents on the session.
Occidental stock has surged in the past two weeks, gaining 31% so far in March, way ahead of the gains in the broader energy sector. Berkshire held less than 30 million shares of Occidental on March 1, and has purchased nearly 90 million shares since then.
The buying is uncharacteristically aggressive by Buffett, who oversees Berkshire’s $350 billion equity portfolio. Berkshire normally accumulates stock quietly over time.
Occidental produces about 1.2 million barrels of oil equivalent daily and has been an industry leader in carbon capture. The company was burdened by high debt from its 2019 purchase of Anadarko Petroleum, but it has been rapidly paying that down thanks to the strength in energy prices. Last month, Occidental CEO Vicki Holub said the company aims to get its net debt down to under $25 billion by the end of the first quarter.
Berkshire shares hit a record Friday, with the class B stock ending at $326.60, up 0.4%. The stock is up 9% so far this year, trouncing the
S&P 500,
which has lost 11% over the same time period as investors seek a safe haven in a rocky market. Berkshire’s class A stock ended Friday at $489,802, up 0.4% in the session.
Write to Andrew Bary at andrew.bary@barrons.com
