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Tension Brewing at the Top of This Energy Giant

By Taylor Muckerman and Joel South - Apr 12, 2013 at 11:04AM

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Disputes between management and the board of directors can affect the future of company operations dramatically. Which exploration and production company might begin to experience this?

In the case of Occidental Petroleum (OXY -0.54%), the company just doesn't seem to be trading at a share price worthy of the sum of its parts. An article in Barron's stated that the company's individual parts could be worth up to $125 per share while the company currently trades around $84. How has the price arrived at this supposedly depressed level? Well, it has traded down 8% since last April versus the S&P 500 (^GSPC -0.81%), which is up over 16% during that same time frame.

At odds about the company's future
The board at Occidental, led by its former CEO, is currently seeking a potential replacement for Stephen Chazen because of the path the company has trended down recently. What's fascinating about this is that 10 board members' statuses are up for shareholder vote in the near future. This will be the perfect forum for the shareholders to decide the direction that the company takes. They can side with the board by keeping them all or voice their approval of Chazen by showing one or more the boardroom door.

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Stocks Mentioned

Occidental Petroleum Corporation Stock Quote
Occidental Petroleum Corporation
OXY
$65.07 (-0.54%) $0.35
S&P 500 Index - Price Return (USD) Stock Quote
S&P 500 Index - Price Return (USD)
^GSPC
$3,941.48 (-0.81%) $-32.27
Chesapeake Energy Corporation Stock Quote
Chesapeake Energy Corporation
CHKA.Q
Anadarko Petroleum Corporation Stock Quote
Anadarko Petroleum Corporation
APC
EOG Resources, Inc. Stock Quote
EOG Resources, Inc.
EOG
$129.25 (0.92%) $1.18

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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