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ACQUISITIONS, DIVESTITURES AND OTHER TRANSACTIONS | 12 Months Ended
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Dec. 31, 2021
Business Combinations, Asset Acquisitions, Dispositions and Other Disclosure [Abstract] |
ACQUISITIONS, DIVESTITURES AND OTHER TRANSACTIONS |
NOTE 5 - ACQUISITIONS, DIVESTITURES AND OTHER TRANSACTIONS
ACQUISITIONS, DIVESTITURES AND OTHER TRANSACTIONS 2021 In November 2021, Occidental entered into an agreement to sell certain non-strategic assets in the Permian Basin. The transaction closed in January 2022 for net cash proceeds of approximately $190 million. The assets and liabilities, of which $72 million is related to PP&E, net and $7 million is related to AROs, were presented as held for sale as of December 31, 2021. In November 2021, Occidental acquired additional working interests in certain assets in the Permian EOR business unit for a net purchase price of approximately $285 million. In October 2021, Occidental closed the sale of its Ghana assets. See below discussion on Discontinued Operations for additional information. This divestiture completed Occidental's large-scale asset divestiture program. In June 2021, Occidental entered into an agreement to sell certain non-strategic assets in the Permian Basin. The transaction closed in July 2021 for net cash proceeds of approximately $475 million. The difference in the assets' net book value and adjusted purchase price was treated as a recovery of cost and normal retirement, which resulted in no gain or loss being recognized. In March 2021, Occidental completed the sale of certain non-operated assets in the DJ Basin for net cash proceeds of approximately $280 million. The difference in the assets' net book value and adjusted purchase price was treated as a recovery of cost and normal retirement, which resulted in no gain or loss being recognized. In 2021, Occidental sold 14 million limited partner units of WES for proceeds of approximately $250 million, see Note 4 - Investments and Related-Party 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. 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. 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. 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 PP&E 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. 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. In August 2019, the Acquisition was consummated. The Acquisition added to Occidental’s oil and gas portfolio, primarily in the Permian Basin, DJ Basin and Gulf of Mexico and Algeria and a general and limited partner interest in WES. Total consideration of the Acquisition was approximately $35.7 billion in cash and common stock. See Note 14 - Stockholders’ Equity for additional information. From the date of the Acquisition through December 31, 2019, revenues and the net loss attributable to common stockholders associated with the operations acquired through the Acquisition totaled $4.2 billion and $1.7 billion, respectively, which included a charge as a result of recording Occidental’s investment in WES at fair value as of December 31, 2019 upon the loss of control. The following table summarizes the Acquisition-related costs incurred for the years ended December 31:
millions |  | 2021 | 2020 | 2019
Employee severance and related employee cost |  | $ | 117 |  | $ | 314 |  | $ | 1,033 |
IT costs |  | 36 |  | 9 |  | 15 |
Licensing fees for critical seismic data |  | — |  | — |  | 401 |
Bank, legal, consulting and other |  | — |  | 16 |  | 198 |
Total |  | $ | 153 |  | $ | 339 |  | $ | 1,647 |
Employee severance and related employee cost primarily related to one-time severance costs and the accelerated vesting of certain Anadarko share-based awards for former Anadarko employees based on the terms of the Acquisition Agreement and existing change of control provisions within the former Anadarko employment agreements. In addition, this category included expenses for a voluntary separation program for eligible employees and retention awards for certain employees. The IT costs primarily related to Occidental’s efforts to integrate the Anadarko finance, supply chain, asset integrity, and well life cycle systems. The seismic licensing fees related to relicensing of critical seismic data related to the Gulf of Mexico, Permian Basin and DJ Basin that Anadarko had licensed from third-party vendors. The third-party vendors who own the seismic data required a transfer fee in order for Occidental to use the data. The following table summarizes the unaudited pro forma condensed financial information of Occidental for the year ended December 31, 2019 as if the Acquisition had occurred on January 1, 2018:
millions except per-share amounts |
Revenues | $ | 28,723 |
Net loss attributable to common stockholders (a) | $ | (769) |
Net loss attributable to common stockholders per share—basic | $ | (0.95) |
Net loss attributable to common stockholders per share—diluted | $ | (0.95) |
(a)Excluding the pro-forma results of WES, net loss attributable to common stockholders would be $(1.1) billion for the year ended December 31, 2019. The unaudited pro forma information is presented for illustration purposes only and is not necessarily indicative of the operating results that would have occurred had the Acquisition been completed on January 1, 2018, nor is it necessarily indicative of future operating results of the combined entity. The unaudited pro forma information for 2019 is a result of combining the statements of operations of Occidental with the pre-Acquisition results from January 1, 2019 of Anadarko and included adjustments for revenues and direct expenses. The pro forma results exclude results from any assets classified as held for sale, any cost savings anticipated as a result of the Acquisition and the impact of any Acquisition-related costs. The pro forma results include adjustments to DD&A based on the purchase price allocated to PP&E and the estimated useful lives as well as adjustments to interest expense. The pro forma adjustments include estimates and assumptions based on currently available information. Management believes the estimates and assumptions are reasonable and the relative effects of the Acquisition are properly reflected. DISCONTINUED OPERATIONS In 2021, Occidental recorded a $437 million after-tax loss contingency in discontinued operations associated with its former operations in Ecuador, see Note 13 - Lawsuits, Claims, Commitments and Contingencies. In October 2021, Occidental closed the sale of its Ghana assets for $750 million and net proceeds of $555 million, after closing adjustments to reflect an April 1, 2021 effective date. In addition, Occidental settled certain tax claims related to historical operations in Ghana for $170 million. Prior to the sale, 2021 operations in Ghana resulted in an after-tax loss of $31 million. The following table presents the amounts reported in discontinued operations, net of income taxes, related to the Ghana assets for the years ended December 31, 2021 and 2020 and for the Ghana, Mozambique and South Africa assets subsequent to the Acquisition closing date through December 31, 2019:
millions | 2021 | 2020 | 2019
Revenues and other income |  |  |
Net sales | $ | 458 |  | $ | 419 |  | $ | 221 |
Costs and other deductions |  |  |
Oil and gas lease operating expense | 71 |  | 117 |  | 45 |
Fair value adjustment on assets held for sale (a) | 409 |  | 2,263 |  | 85 |
Other | 24 |  | 48 |  | 45 |
Total costs and other deductions | $ | 504 |  | $ | 2,428 |  | $ | 175 |
Income (loss) before income taxes | $ | (46) |  | $ | (2,009) |  | $ | 46 |
Income tax benefit (expense) | 15 |  | 711 |  | (61) |
Discontinued operations, net of tax | $ | (31) |  | $ | (1,298) |  | $ | (15) |
(a) For 2021, included effective date to close date adjustments as well as settlements of certain tax claims. 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:
millions | 2020
Current assets | $ | 37 |
Property, plant and equipment, net | 1,364 |
Long-term receivables and other assets, net | 32 |
Assets held for sale | $ | 1,433 |
Current liabilities | $ | 84 |
Long-term debt, net - finance leases | 175 |
Deferred income taxes | 328 |
Asset retirement obligations | 166 |
Liabilities of assets held for sale | $ | 753 |
Net assets held for sale | $ | 680 |

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- Definition Business Combinations, Asset Acquisitions, Dispositions and Other Disclosure + References No definition available. + Details
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- Definition Description of significant business acquisitions (or series of individually immaterial business combinations or asset acquisitions) planned, initiated, or completed during the period, including background, timing, and allocation of acquisition costs. Includes description of significant business or asset dispositions completed during the period, including background, timing and disclosures for discontinued operations, if applicable. Also includes description of other applicable transactions. This element may be used as a single block of text to encapsulate all disclosures (including data and tables) regarding business combinations, asset acquisitions, business or asset dispositions, including leverage buyout transactions and other transactions. + References No definition available. + Details
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