June 2020 Warrants

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​​​​​​​​Occidental Petroleum Corporation

​​                                        Q&A Regarding Warrants

1. Why has Occidental Petroleum Corporation issued warrants as a distribution on its common stock?

Occidental issued warrants as a distribution on the common stock to provide value to our existing stockholders. Occidental has taken significant actions to address the issues created by the protracted downturn associated with the COVID-19 pandemic and the decline in oil prices in the first half of 2020, including the pursuit of divestitures of assets not as directly impacted by the decline in commodity prices, aggressive cost reductions and the difficult decision to significantly reduce the common dividend. Occidental has been clear in its prioritization of liquidity, addressing near-term maturities and balance sheet repair. The warrants allow our common stockholders the opportunity to acquire additional common stock in the future at what Occidental believes will be an attractive price. Recipients also may sell the warrants they receive to achieve immediate value.

2. Does this distribution mean that Occidental is changing its dividend policy?

No—this distribution does not mean that Occidental is changing its dividend policy. The amount of future dividends to be paid on our common stock, if any, will be determined by our Board based on a number of factors, including our financial condition and expected capital needs.

3. What did stockholders receive in the distribution?

Stockholders received 1/8th of a warrant for every share of common stock of which they were the record holder as of July 6, 2020.

4. Who received the warrants? How many warrants did stockholders receive?

All holders of record of common stock as of July 6, 2020 received warrants in the amount of 1/8th of a warrant per share of common stock.

5. Do I have to do anything in order to receive the warrants?

No—all holders of record of common stock as of July 6, 2020 will have automatically received the warrants in the amounts described above in book-entry form. If you hold your shares in street name, contact your broker for further information. If your shares are held in a registered account with Occidental’s transfer agent, contact Equiniti Trust Company P.O. Box 64874, St. Paul, MN 55164, Telephone: 1-877-699-8166 or 651-450-4064, for further information.

6. When can I exercise the warrants?

You can exercise the warrants at any time from August 3, 2020 through, and including, August 3, 2027.

7. What is the exercise price? What does the exercise price mean?

The initial exercise price of the warrants is $22 per share of common stock. The exercise price is the amount required to be paid in cash to purchase shares of common stock pursuant to the warrants.

8. Do I have to pay anything when I exercise the warrants? How will the warrants be settled on exercise?

Yes—you will have to pay the exercise price of $22 per share of common stock. The exercise price must be paid in cash when the warrants are exercised.

9. Will the warrants be adjusted for future transactions?

The initial exercise price and the number of shares of common stock issuable upon exercise are subject to certain anti-dilution adjustments, including for stock splits, reclassifications, noncash distributions, cash dividends on the common stock other than quarterly dividends, pro rata repurchases of common stock and certain issuances of common stock (or securities exercisable or convertible into or exchangeable for common stock) at a price (or having a conversion price) that is less than 95% of the market price of the common stock. In addition, Occidental may decrease the exercise price for any reason the Board considers to be advisable.

10. What happens to the warrants in the event of a merger or business combination?

In the event of certain mergers, business combinations or reclassifications, the right to receive common stock upon exercise of a warrant will be changed into a right to acquire the type and amount of securities or other property or assets that a warrant holder would have been entitled to receive had the warrant holder exercised its warrant immediately before the merger, business combination or reclassification.

11. Were holders of Occidental’s Series A preferred stock entitled to receive the warrants?

No—only holders of Occidental’s common stock were entitled to receive the warrants.

12. Will the exercise of the warrants result in the issuance of additional shares of common stock?

Yes—upon exercise of the warrants, new shares of common stock will be issued. However, unlike an equity offering which would have immediately resulted in the issuance of additional shares, the warrants will only result in the issuance of shares of common stock to the extent holders choose to exercise the warrants.

13. What happens to fractional warrants?

Fractional warrants were not distributed. Fractional warrants to which Occidental’s holders of record would otherwise have been entitled to receive will be aggregated and sold in the public market by the warrant agent. The aggregate net cash proceeds of the sales will be distributed ratably to those stockholders who would otherwise have received fractional warrants.

14. What will happen to the proceeds from the exercise of the warrants?

Occidental will receive the proceeds from the exercise of the warrants and may use the proceeds for any authorized corporate purpose.

15. Will the warrants expire?

Yes—the warrants will expire after August 3, 2027.

16. What happens if I do not exercise the warrants before they expire?

After the expiration date, you will no longer be entitled to exercise the warrant to purchase shares of common stock at the exercise price.

17. If I do not exercise the warrants before they expire, will my preexisting ownership of common stock be affected?

No—the warrants are a separate security from any shares of Occidental common stock that you own.

18. What happens to my warrants if I sell my shares of common stock?

You do not need to remain a common stockholder in order to receive, hold or exercise the warrants.

19. Will the warrants be listed? Can I sell the warrants?

Yes—Occidental listed the warrants on the NYSE and you may sell the warrants at the prevailing market price on the NYSE. Although the warrants are listed on the NYSE, we cannot provide any assurances that an active trading market for the warrants will continue or that there will be liquidity in the trading market. You should consult your financial advisor for assistance.

The official NYSE ticker for the warrants is “Oxy WS”.

20. What will the warrants be worth?

The “intrinsic” value of a warrant is generally considered to be the amount by which the price of the common stock issuable upon exercise of the warrant exceeds the exercise price of the warrant at that time. There are other methodologies for calculating the “theoretical” value of a warrant. You should consult your financial advisor for assistance.

21. What are the U.S. federal income tax consequences of the receipt of the warrants in the distribution?

Occidental intends to report the distribution of the warrants as a taxable dividend in an amount equal to the fair market value of the warrants distributed to you. Accordingly, your tax basis in the warrants received in the distribution will equal the fair market value of the warrants distributed to you. In addition, if you are a non-U.S. holder of Occidental’s common stock, you will be subject to U.S. federal withholding tax at a rate of 30% (or lower treaty rate, if applicable) on the fair market value of the warrants that would otherwise be delivered to you. Such non-U.S. holders should expect applicable withholding agents to retain and sell a portion of the warrants, or otherwise debit the relevant account, to fund the required withholding tax payment.

Occidental intends to report the fair market value of the warrants as $4.95, which is the average of the highest and lowest trading prices of the warrants on the NYSE on August 4, 2020, the first trading date following the distribution of the warrants.

Please refer to our Current Report on Form 8-K, filed on July 27, 2020, for additional information regarding the U.S. federal income tax consequences of the distribution of the warrants. You should consult your own tax advisor regarding the tax consequences of the distribution as well as the ownership, disposition and exercise of the warrants.

Earnings Package

​​​​3rd Quarter 2020

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Investor Relations Contacts
Corporate Headquarters
Occidental
5 Greenway Plaza, Suite 110
Houston, Texas 77046-0506
Investor Relations
Jeff Alvarez - Vice President Investor Relations
Neil Backhouse - Director Investor Relations
Email
(713) 552-8811

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