Occidental Petroleum said on Friday that it plans to spin off its California business, breaking itself in two as it looks to narrow its operational focus.
The move is the latest by an oil company to break itself up in an effort to lift a depressed stock price. Occidental had been under additional pressure since last year, when its board was reportedly divided over the direction of the company.
Under the terms of the plan unveiled on Friday, Occidental will spin off its California business into a separate publicly traded company, creating the state’s biggest natural gas producer. It will have holdings in potentially important oil- and gas-producing areas like Los Angeles, San Joaquin and Sacramento.
Last year, the division reported $2.6 billion in earnings before interest, taxes, depreciation and amortization. When it becomes independent, which is expected to happen as soon as the end of the year, it is expected to carry between $4 billion and $5 billion worth of debt.
Occidental has already made other moves to shrink itself. On Thursday, it announced a deal to sell some of its natural gas holdings in the Midwest for $1.4 billion.
Separately, the company said that it has asked its chief executive, Stephen I. Chazen, to stay until its 2016 annual shareholder meeting. The decision essentially ends a search begun last spring to find a replacement for Mr. Chazen.
Occidental’s current chairman, Edward P. Djerejian, will stay for one more year.
