By Ernest Scheyder
WILLISTON, N.D. (Reuters) - Occidental Petroleum Corp (N:OXY) Chief Executive Stephen Chazen quipped on Thursday that his larger rival Chevron Corp (N:CVX) was too poor to buy the No. 4 U.S oil producer, but the offhand remark sent Oxy's stock up anyway.
During a conference call to discuss the company's fourth-quarter results, an analyst asked Chazen if his company was on the market.
The question was to be expected. With oil prices down by half since June and profits slipping, bankers are readying for a wave of mergers and acquisitions that can be made on the cheap.
"Have you considered selling Oxy?" Wolfe Research's Paul Sankey said.
Chazen, an Oxy employee since 1994 and CEO since 2011, responded, "Right now, people are cash flow challenged so I suspect selling Oxy is probably not likely."
Then, without Sankey or any other analyst mentioning Chevron, Chazen casually mentioned he had reviewed the second-largest U.S. oil producer's books.
"I looked at Chevron and they don't have any free cash," Chazen said on the call.
Laughter was audible in the background, but eyebrows were raised by the mention of a specific company, which is three times Oxy's size with $14.3 billion cash in the bank and could probably buy Oxy if it wanted.
After Chazen's comments, shares of Occidental, which had been falling, reversed course. They finished up 2.4 percent at $78.31 per share on a day when most energy stocks were flat.
"Mr. Chazen's comments were made in jest," Oxy spokeswoman Melissa Schoeb said when asked for comment after the call.
A tie-up, however unlikely, might be difficult since the companies have not had especially warm relations.
Both have California roots; Oxy only recently moved its headquarters to Houston. But as recently as last year, there were legal wranglings between Chevron and the U.S. government over oil-rich acreage in California that the government sold to Occidental.
The saga strained relations between the two companies, especially because the land is considered one of California's largest oilfields with about 1 billion barrels of reserves.
Chazen, who also said on the call that Oxy was not interested in making acquisitions, declined through a spokesperson to be interviewed.
Chevron, based in San Ramon, California, declined to comment. The company is due to report quarterly financial results on Friday.
"We're not going to comment on rumor or speculation on M&A," Chevron spokesman Kurt Glaubitz said.