OXY: Occidental Petroleum Corp Message Board

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Gold/Mining/Energy : OXY: Occidental Petroleum Corp

OXY 41.20

+1.2%

Oct 31 9:30 AM EST

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From: Dennis Roth	5/21/2007 9:00:12 AM
	of 24

Removing from Americas Conviction List, but retain Buy rating Goldman Sachs' Rating/Coverage View is Buy/Neutral May 21, 2007 What happened We are removing the shares of Occidental Petroleum (Oxy) from the Americas Conviction Buy List, as we see greater upside at this time in the shares of Valero Energy (see related note published today). Occidental Petroleum remains Buy rated. Since being added to the Conviction Buy List on January 24, 2007, Oxy is up 18.3% versus a 16.2% gain for XOI (AMEX oil index) and a 5.7% rise in the S&P 500. Current view We continue to hold a very positive fundamental view of Oxy.based on the following: (1) favorable leverage to our bullish crude oil view; (2) attractive growth opportunities and exposure to the Middle East and Libya; (3) high-quality legacy assets in the Permian Basin (Texas) and Elk Hills (California) oil fields; (4) top quartile returns on capital; and (5) significant free cash generation that could be used to either fund additional growth opportunities or repurchase shares. We believe the combination of Oxy’s growth projects and stock buyback will result in top quartile per share growth. While Oxy is approaching our $55, 12-month target price (based on asset value and cash flow valuation analyses; key risk is lower oil prices), we think additional trading upside potential could exist to levels between our “mid-point”-based target price and a $67 “high-end” trading value. Our “high-end” trading values are consistent with M&A valuations. While we have not recommended Oxy as a consolidation candidate, we think it has a very attractive set of assets that many other large international oil companies (both public and state-owned) would covet.

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