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Warren Buffett, Chairman and CEO of Berkshire Hathaway.
Kevin Dietsch/Getty Images
Berkshire Hathaway
bought more than 500 million dollars of
western oil
stock recently and now owns a 16.3% stake in the major energy company, according to a regulatory filing late Wednesday.
Berkshire Hathaway
(ticker: BRK/A, BRK/B) CEO Warren Buffett started buying
western oil
(OXY) earlier this year and Berkshire now owns 152.7 million shares after buying a total of 9.5 million shares last Friday and Wednesday. The bet is now worth $8.5 billion.
Shares of Occidental fell 3.6% on Wednesday to $55.77 as oil prices continued to slide, falling 1.7% to $104 a barrel based on western intermediate crude from Texas. Buffett appears to be taking advantage of recent weakness in oil prices and energy stocks to bolster Berkshire’s position.
As a holder of more than 10% of Occidental, Berkshire must disclose stock transactions within two business days via a filing with the Securities and Exchange Commission. Berkshire’s last purchases of Western stocks were in May.
The new purchases could fuel speculation that Berkshire will further increase its stake to 20%, or potentially a bid for the entire company. At 20%, Berkshire would likely get a different accounting treatment for Occidental that would allow it to reflect a proportionate share of Occidental’s profits in its own results.
Along with other energy companies, Occidental is trading cheap, earning just five times its projected 2022 earnings as it capitalizes on high oil and gas prices. Berkshire also has a significant stake in
Chevron
(CLC).
Write to Andrew Bary at [email protected]
.
