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13-03-2022|Business

After recent purchases, Warren Buffett's Berkshire Hathaway now owns $6.9 billion in Occidental Petroleum.

Berkshire Hathaway resumed its aggressive buying of Occidental Petroleum stock this week, increasing its position in the huge energy business to $6.9 billion, according to a filing Friday evening.  

The purchase underscores Berkshire Hathaway (ticker: BRK/A, BRK/B) CEO Warren Buffett's enthusiasm for Occidental Petroleum (OXY), which has made a strong comeback in tandem with the rise in oil and natural gas prices.

From Wednesday to Friday, Berkshire bought 27.1 million shares of Occidental for $1.6 billion. The majority of the purchases—some 24 million shares—took place on Wednesday, when activity soared to 134 million shares, well above the previous year's average of 20 million.

Berkshire owns 12.7 percent of Occidental with 118.3 million shares. Berkshire Hathaway must report Occidental stock transactions within two business days because it owns more than 10% of the company.

Berkshire Hathaway was rumoured to have purchased Occidental stock on Wednesday. Berkshire also has 83.9 million Occidental stock warrants with a strike price of $59.62. Occidental shares closed at $57.95 on Friday, down 18 cents on the day.

Occidental's stock has soared in recent weeks, gaining 31 percent so far in March, greatly outpacing the larger energy sector's gains. On March 1, Berkshire possessed less than 30 million shares of Occidental, but has subsequently purchased roughly 90 million.

Buffett, who oversees Berkshire's $350 billion equity portfolio, has been unusually aggressive in his stock purchases. Berkshire Hathaway is known for quietly amassing stock over time.

Occidental produces roughly 1.2 million barrels of oil equivalent per day and is a carbon capture industry leader. Due to the strength of energy prices, the business was saddled by large debt from its 2019 acquisition of Anadarko Petroleum, but it has been aggressively paying it down. Occidental CEO Vicki Holub stated last month that the company's net debt will be under $25 billion by the end of the first quarter.

Berkshire Hathaway stock struck a new high on Friday, closing at $326.60, up 0.4 percent. The stock has gained 9% this year, outperforming the S&P 500, which has lost 11% in the same time period as investors seek a safe haven in a volatile market. Berkshire Hathaway's class A shares closed at $489,802 on Friday, up 0.4 percent on the day.

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