On May 9, 2019, Occidental entered into the Acquisition Agreement with Anadarko. On August 8, 2019, Anadarko’s stockholders voted to approve the Acquisition and it was made effective the same day. The Acquisition added to Occidental’s oil and gas portfolio, primarily in the Permian Basin, DJ Basin and Gulf of Mexico, and a controlling interest in WES.

In exchange for each share of Anadarko common stock, Anadarko stockholders received $59.00 in cash and 0.2934 of a share of Occidental common stock, plus cash in lieu of any fractional share of Occidental common stock that otherwise would have been issued, based on the average price of $46.31 per share of Occidental common stock on the NYSE on August 8, 2019.

In connection with the Acquisition, Occidental issued $13.0 billion of new senior unsecured notes, $8.8 billion of term loans (the Term Loans) and 100,000 shares of series A preferred stock (the Preferred Stock) with a warrant to purchase 80 million shares of Occidental common stock at an exercise price of $62.50 (the Warrant) for $10 billion. In addition, Occidental increased its existing $3.0 billion revolving credit facility by an additional $2.0 billion in commitments. See Note 7 - Long-term Debt and Note 13 - Stockholders’ Equity for additional information.



millions except per-share amounts	As of August 8, 2019
Total shares of Anadarko common stock eligible for Acquisition consideration		491.6
Cash consideration (per share of common stock and shares underlying Anadarko stock-based awards eligible for Acquisition consideration)		$	59.00
Cash portion of Acquisition consideration		$	29,002

Total shares of Anadarko common stock eligible for Acquisition consideration		491.6
Exchange ratio (per share of Anadarko common stock)		0.2934
Total shares of Occidental common stock issued to Anadarko stockholders		144
Average share price of Occidental common stock at August 8, 2019		$	46.31
Stock portion of Acquisition consideration		$	6,679

Acquisition consideration attributable to Anadarko stock-based awards		$	23

Total Acquisition consideration		$	35,704

The following table sets forth the preliminary allocation of the Acquisition consideration. Certain data necessary to complete the purchase price allocation is not yet available, including, but not limited to, final appraisals of certain assets acquired and liabilities assumed, valuation of pre-Acquisition contingencies and final tax returns that provide underlying tax basis of assets acquired and liabilities assumed. Occidental will finalize the purchase price allocation during the 12-month period following the Acquisition date, during which time the value of the assets and liabilities may be revised as appropriate.



millions	As of August 8, 2019
Fair value of assets acquired:
Current assets		$	3,596
Africa Assets held for sale		10,616
Investments in unconsolidated entities		194
Property, plant and equipment		49,074
Other assets		836
Amount attributable to assets acquired		$	64,316

Fair value of liabilities assumed:
Current liabilities		$	3,410
Liabilities of Africa Assets held for sale		2,200
Long-term debt		13,240
Deferred income taxes		8,607
Asset retirement obligations		2,724
Pension and post-retirement obligations		1,072
Non-current derivative liabilities		1,280
Other long-term liabilities		2,323
Amount attributable to liabilities assumed		$	34,856

Net assets		$	29,460
Fair value of WES net assets acquired less noncontrolling interests ^(a)		$	6,244
Total Acquisition consideration		$	35,704

The following table summarizes the fair value of the major categories of WES assets acquired and liabilities assumed at the Acquisition date as well as the noncontrolling interest, which primarily consists of the 44.6% limited partner interest in WES owned by the public. The fair value of Occidental’s controlling interest in WES is calculated based on the market capitalization value at the Acquisition date.



millions	As of August 8, 2019
Fair value of WES assets acquired:
Current assets		$	499
Investments in unconsolidated entities		2,425
Property, plant and equipment		10,160
Intangible assets - customer relationships		1,800
Goodwill		5,772
Other assets		342
Amount attributable to assets acquired		$	20,998

Fair value of WES liabilities assumed:
Current liabilities		$	815
Long-term debt		7,407
Deferred income taxes		1,174
Asset retirement obligations		321
Other long-term liabilities		142
Amount attributable to liabilities assumed		$	9,859

Net assets		$	11,139
Less: Fair value of noncontrolling interests in WES		$	4,895
Fair value of WES net assets acquired less noncontrolling interests		$	6,244

The aggregate purchase price noted above was allocated to the major categories of assets and liabilities acquired based upon their preliminary estimated fair values at the date of the Acquisition. The valuation of certain assets, including property and intangible assets, are based on preliminary appraisals. The majority of measurements of assets acquired and liabilities assumed, other than debt, are based on inputs that are not observable in the market and thus represent Level 3 inputs. The fair value of acquired properties and equipment is based on both available market data and a cost approach.

Onshore undeveloped oil and gas properties were valued primarily using a market approach based on comparable transactions for similar properties while the income approach was utilized for developed oil and gas properties based on underlying reserve projections at the Acquisition date. For the acquired Gulf of Mexico offshore properties, an income approach was used as the primary valuation method based on underlying reserve projections. Income approaches are considered level 3 fair value estimates and include significant assumptions of future production, commodity prices, and operating and capital cost estimates, discounted using weighted average cost of capital for industry peers, and risk adjustment factors based on reserve category. Price assumptions were based on a combination of market information and published industry resources adjusted for historical differentials. Cost estimates were based on current observable costs inflated based on historical and expected future inflation. Taxes were based on current statutory rates.

The fair value of WES investments in unconsolidated entities were valued using an income approach for each investment, with significant inputs being forecasted distributions, an anticipated growth rate and an estimated discount rate. Acquired WES property, plant and equipment primarily consisted of gathering systems and processing and treating facilities and were primarily valued using a replacement cost approach. Intangible assets primarily consist of relationships with third-party customers, the fair value of which was determined using an income approach, including significant assumptions related to estimated cash flows from third-party customers less a contributory asset charge, a customer retention rate and an estimated discount rate. Customer relationships are amortized over 30 years. Goodwill is attributable to the difference in WES market capitalization value and the net assets acquired and primarily relates to the relationship between Occidental and WES that is not recognized as a separate asset, due to Occidental consolidating WES as of the Acquisition date.

Deferred income taxes represent the tax effects of differences in the tax basis and acquisition-date fair values of assets acquired and liabilities assumed. The measurement of debt instruments was based on unadjusted quoted prices in an active market and are primarily Level 1; approximately $2.5 billion of the assumed Anadarko debt is considered Level 2, while approximately $730 million of the WES debt is considered Level 2. The value of derivative instruments was based on observable inputs, primarily forward commodity-price and interest-rate curves and is considered Level 2.

With the completion of the Acquisition, Occidental acquired proved and unproved properties of approximately $19.1 billion and $27.4 billion, respectively, primarily associated with the Permian Basin, DJ Basin, Gulf of Mexico and Powder River Basin. The remaining $2.5 billion in PP&E which consists of non-oil and gas mineral interests and other real estate assets.

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 includes 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.



	Year ended December 31,
millions except per-share amounts	2019			2018
Revenues	$	28,723		$	31,206
Net income (loss) attributable to common stockholders ^(a)	$	(769	)	$	2,965
Net income (loss) attributable to common stockholders per share—basic	$	(0.95	)	$	3.26
Net income (loss) attributable to common stockholders per share—diluted	$	(0.95	)	$	3.25

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 at January 1, 2018, nor is it necessarily indicative of future operating results of the combined entity. The unaudited pro forma information for 2019 and 2018 is a result of combining the statements of operations of Occidental with the pre-Acquisition results from January 1, 2019, and 2018 of Anadarko and included adjustments for revenues and direct expenses. The pro forma results exclude results from the Africa Assets, 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 (depreciation, depletion and amortization) based on the purchase price allocated to property, plant, and equipment 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.

Employee severance and related employee cost primarily relates 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, employee severance and related employee cost included expenses for a voluntary separation program for eligible employees. Occidental initiated this program to align the size and composition of its workforce with its expected future operating and capital plans. Employee notifications related to the voluntary separation program were ongoing at December 31, 2019, with additional expenses associated with the program expected to be incurred through most of 2020. Employees may revoke their participation in the voluntary severance program up to their separation date.