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Anadarko Employees – Options and Choices

By Paul J. Carroll, CFP®June 12, 2019December 3rd, 2023Videos

As we know, Occidental is purchasing Anadarko. And ever since the purchase has been announced, their stock has been pummeled. In fact, June 5th, the stock dropped a full 4%. What’s going on here? I mean there’s nothing wrong with Anadarko. What’s going on here is leverage. Occidental is using an enormous amount of leverage to make this deal happen.

We actually had a video about a week or two ago where we discussed some of the components of this deal. But, long story short, Occidental is going to be under intense pressure to sell assets. They’ve already got assets for sale in Africa to Total Energy out of France. They’re probably going to have to sell those towers. They’ve got to get the debt under control. So where does that leave the employees? Well, unless you’re out in the Permian Basin or there’s something unique about your skillset, you’re probably moving on.

There’s going to be a number of groups. Without a doubt, there’ll be accelerated retirements. Those out in the fracking fields, they’re going to be needed. This is an asset play, this is not a people play. If you are skilled, if you have a unique skillset, you’ve got options. And one of those options may be Occidental. But for the bulk of the employees, even the skilled employees, there are limited opportunities in the area. People are talking about moving out of town, maybe getting a job in Houston; if they’re very fortunate, migrating over to ExxonMobil.

So for all of those groups, there are a number of options available, and a number of decisions that need to be made. Some of those individuals have got defined benefit plans. Some of them have got stock units in the 401(k). They may have stock options. There’s certainly an ESOP plan. And, almost certainly for a number of these groups, there will be severance options.

If you’re one of these individuals and you think that you’re going to be facing options, that you’ll have difficult decisions and that you need to make informed choices, then give us a call at Efficient Wealth Management: 281-528-1200.

Because we’re here for you every step of the way. Thank you.