DIVESTITURES AND OTHER TRANSACTIONS

12 Months Ended

Dec. 31, 2020

Discontinued Operations and Disposal Groups [Abstract]


NOTE 4 - DIVESTITURES AND OTHER TRANSACTIONS

DIVESTITURES AND OTHER TRANSACTIONS

2020

In November 2020 and December 2020, Occidental divested of certain non-core, largely non-operated proved and unproved acreage in the Permian for a loss of approximately $820 million. The losses have been presented within gains (losses) on sale of assets, net in the Consolidated Statement of Operations. The net proceeds were used to pay down near-term maturities.

In October 2020, Occidental entered into an agreement to sell its onshore oil and gas Colombia assets. The transaction closed in December 2020, and Occidental recorded a loss on sale of approximately $353 million. The loss has been presented within gains (losses) on sale of assets, net in the Consolidated Statement of Operations. The net proceeds were used to pay down near-term maturities.

In August 2020, Occidental entered into an agreement to sell approximately 4.5 million mineral acres and 1 million fee surface acres located in Wyoming, Colorado and Utah for approximately $1.33 billion. The transaction closed in October 2020 for net cash proceeds of approximately $1.0 billion, after satisfying $329 million of liabilities associated with the sale of future royalties. Occidental recorded a loss on sale of $440 million. The loss has been presented within gains (losses) on sale of assets, net in the Consolidated Statement of Operations. The net proceeds were utilized to pay down a portion of the 2-year variable rate Term Loan due 2021. See Note 7 - Long-Term Debt for further information.

2019

In December 2019, Occidental disposed of real estate assets for $565 million. Occidental utilized net proceeds to pay down a portion of the Term Loans. Concurrent with the sale, Occidental entered a 13-year lease for part of the real estate assets. Based on the terms of the lease, Occidental treated this as a failed sale-leaseback, retained the related book value in property, plant and equipment and recognized a finance lease of approximately $300 million based on the discounted future minimum lease payments.

In November 2019, Occidental and Ecopetrol closed on the joint venture to develop approximately 97,000 net acres of Occidental’s Midland Basin unproved properties in the Permian Basin. Ecopetrol paid $750 million in cash at closing and up to $750 million of carried capital in exchange for a 49% interest in the new venture. Occidental recognized a gain of $563 million on the sale. Following the close, Occidental owned a 51% interest and operates the joint venture. During the carry period, Ecopetrol will pay 75% of Occidental’s share of capital expenditures, up to $750 million. The joint venture allows Occidental to accelerate its development plans in the Midland Basin, where it currently has minimal activity. Occidental will retain production and cash flow from its existing operations in the Midland Basin. The proceeds were used to pay down a portion of the Term Loans.

In September 2019, Occidental sold its remaining equity investment in Plains for net proceeds of $646 million, which resulted in a pre-tax gain of $114 million. The proceeds were used to pay down a portion of the Term Loans.

2018

In September 2018, Occidental divested non-core domestic midstream assets for total consideration of $2.6 billion, of which approximately $2.4 billion was received at closing, resulting in a pre-tax net gain of $907 million. These assets include the Centurion common carrier oil pipeline and storage system, Southeast New Mexico oil gathering system and Ingleside Crude Terminal. Following the transactions, Occidental retained its long-term flow assurance, pipeline takeaway and export capacity through its retained marketing business.

In July 2018, Occidental acquired a previously leased power and steam cogeneration facility for $443 million.

In March 2018, Occidental divested non-core midstream assets for approximately $150 million, resulting in a pre-tax gain of $43 million.

DISCONTINUED OPERATIONS

The following table presents the amounts reported in discontinued operations, net of income taxes, related to the Ghana assets for the year ended December 31, 2020 and for the Ghana, Mozambique and South Africa assets subsequent to the Acquisition closing date through December 31, 2019:


millions	2020		2019
Revenues and other income
Net sales	$	419	$	221

Costs and other deductions
Oil and gas lease operating expense	117		45
Fair value adjustment on assets held for sale	2,263		85
Other	48		45
Total costs and other deductions	$	2,428	$	175

Income (loss) before income taxes	$	(2,009)	$	46
Income tax benefit (expense)	711		(61)
Discontinued operations, net of tax	$	(1,298)	$	(15)

The following table presents amounts related to the Ghana assets reported as held for sale in the Consolidated Balance Sheet as of December 31, 2020 and the amounts related to the Mozambique, South Africa and Ghana assets reported as held for sale in the Consolidated Balance Sheet as of December 31, 2019, respectively:


millions	2020		2019

Current assets	$	37	$	40
Property, plant and equipment, net	1,364		3,720
Long-term receivables and other assets, net	32		110
Assets held for sale	$	1,433	$	3,870

Current liabilities	$	84	$	264
Long-term debt, net - finance leases	175		185
Deferred income taxes	328		1,112
Asset retirement obligations	166		155
Other	—		2
Liabilities of assets held for sale	$	753	$	1,718

Net assets held for sale	$	680	$	2,152

ALGERIA OPERATIONS RECLASSIFICATION

The following table presents the amounts previously reported in discontinued operations, net of income taxes, for the year ended December 31, 2019 which was reclassified to continuing operations as a result of Occidental's decision to operate in Algeria.


millions	Year ended December 31, 2019

Revenues and other income
Net sales	$	518

Costs and other deductions
Oil and gas lease operating expense	36
Transportation expense	14
Taxes other than on income	133
Depreciation, depletion and amortization	159
Other	9
Total costs and other deductions	351

Income before income taxes	167
Income tax expense	(167)
Net income of Algeria operations, after taxes	$	—

The following table presents the amounts previously reported in the Consolidated Balance Sheets as held for sale related to Algeria that were subsequently reclassified as of December 31, 2019:


millions	December 31, 2019
Current assets	$	249
Property, plant and equipment, net	1,761
Long-term receivables and other assets, net	146
Total Assets	$	2,156

Current liabilities	$	188
Non-current liabilities	104
Total Liabilities	$	292