Occidental Petroleum says it will spin off its California assets into a separately traded company, creating the state's largest natural gas producer.
Feb 14 (Reuters) - Occidental Petroleum Corp said it would spin off its oil and gas assets in California into a separately traded company and move its headquarters from Los Angeles to Houston, where it will be closer to its largest U.S. operations.
Wall Street analysts have estimated the underperforming California unit, which Occidental had talked about splitting from for months, could be worth $19 billion to $22 billion.
New York-traded shares of Occidental rose 3.5 percent on Friday to $95.51, giving the fourth-largest U.S. oil company a market capitalization of $72 billion.
Occidental said the California unit generated a pretax profit of about $1.5 billion in 2013.
"Creating two separate energy companies will result in more focused businesses that will be competitive industry leaders," Chief Executive Stephen Chazen said on Friday.
The California unit, the largest natural gas producer in the state, has long been seen as a drag on the company because of its limited oil production. Total production growth averaged 3.6 percent between 2010 and 2013.
The California fields produced an average 261 million cubic feet of gas and 88,000 barrels of oil per day in 2013.
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