Jonathan Stempel

(Reuters) Occidental Petroleum Corp’s shares rose Thursday following Warren Buffett’s Berkshire Hathaway Inc’s announcement that the company spent $1 billion more on shares of the oil giant. This gives it a 14.6% interest.

Berkshire announced Wednesday night that it has 136.4 Million Occidental shares. This includes 18.1 Million purchased between Monday, Wednesday and Wednesday.

Buffett’s company started revealing this month it was investing in Occidental Common Stock, in addition to the $10 billion it had in preferred stock. According to regulatory filings, Berkshire spent $6.4 billion in common stock.

Occidental shares rose 8.5% to $57.50 in morning trading on the New York Stock Exchange. As recently as October 2020, they traded at $9.

Occidental shares are largely influenced by rising oil prices as well Russia’s incursion in Ukraine. Russia considers this a special operation.

Vicki Hollub (Occidental’s chief executive officer) stated that this month, oil companies are having difficulty meeting the demand due to supply chain issues and labour shortages.

Occidental also aims to reduce its debt by over half, and increase payouts to shareholders. This includes a larger dividend that was announced last month.

Berkshire purchased its preferred stock to finance Occidental’s purchase of Anadarko Petroleum Corp for $35.7 billion (NYSE:).

This preferred stock pays $800 million in annual dividends. Berkshire has the option to purchase $5 billion more Occidental stock for $59.62 each share.

Berkshire’s latest purchase is not clear if it is financing its purchases using cash available or selling stocks that it already owns. Chevron Corp. (NYSE:)

Berkshire had $146.7 billion in cash and equivalents at the end of 2021. In 2021 it was a net stock seller. Buffett stated in his February 26th shareholder letter that “we find very little that excites” about equity markets.