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Occidental Petroleum slashed its quarterly dividend by 86% on Tuesday, becoming one of the biggest casualties of the recent plunge in oil prices.

The company also said that it would be cutting its 2020 capital spending to between $3.5 billion to $3.7 billion, from $5.2 billion to $5.4 billion.

The dividend cut, to 11 cents a share from 79 cents, wasn’t much of a surprise as several analysts had predicted such an action. Occidental’s balance sheet is stretched as a result of the debt incurred from its much-criticized $57 billion purchase of Anadarko Petroleum last year. Barron’swrote on Monday that the lofty dividend was in jeopardy.

Shares of Occidental (ticker: OXY), which plunged 53%, or $14.35, to $12.51 on Monday, were up 96 cents, at $13.47, in midday trading Tuesday. The stock now yields 3.2% with the new dividend.

Occidental’s bonds have also come under pressure lately with the company’s 4.4% bonds due in 2029 now trading around 70 cents on the dollar, down from above 100 cents in late February. The yield is now about 6.5%.

The dividend cut is a blow to Occidental CEO Vicki Hollub, who championed the Anadarko deal over the objections of many shareholders who called it risky. She succeeded in restructuring the agreement to avoid a shareholder vote, angering big holders like T. Rowe Price, who called the action terrible corporate governance. Hollub argued the deal was so important to Occidental that the company couldn’t risk a potential rejection by holders.

Hollub’s bet-the-company deal for Anadarko has proven to be an albatross given the sharp drop in oil prices.

Oil prices, as measured by West Texas intermediate crude, were up $2.24, to $33.37 a barrel on Tuesday, but they are down by about 50% since last spring.

In a statement on Tuesday, Hollub said: “Due to the sharp decline in global commodity prices, we are taking actions that will strengthen our balance sheet and continue to reduce debt. These actions lower our cash flow break-even level to the low $30s WTI, excluding the benefit of our hedges, positioning us to succeed in a low commodity price environment.”

Still, Hollub’s job could be in jeopardy because of the Anadarko fiasco. She has overseen an 80% drop in the stock price since last April, when rumors surfaced that the company would seek to break up the deal that Anadarko had reached with Chevron (CVX).

Following the Anadarko deal, Occidental went from having one of the strongest balance sheets among its peers to one of the worst. Its long-term debt rose to $38 billion from $10 billion.

Hollub also made another widely criticized move in getting expensive preferred stock financing from Warren Buffett’s Berkshire Hathaway (BRK. A), which bought $10 billion of 8% preferred with warrants that cost Occidental $800 million annually.

Activist investor Carl Icahn, who holds a stake in Occidental, has been critical of Hollub and her handling of the Anadarko deal.

“The Buffett deal was like taking candy from a baby and amazingly she even thanked him publicly for it,” Icahn wrote last year.

In addition to its preferred holding, Berkshire owns a 2% stake in Occidental common shares and is sitting with a big loss on that position. Berkshire held nearly 19 million shares at year-end after buying 11.5 million shares in the fourth quarter. That stake is now worth about $250 million, down from $775 million at the end of 2019.

Berkshire’s preferred dividends appear safe for now. One possibility raised by J.P. Morgan analyst Phil Gresh in a recent note is that Occidental could pay Berkshire in stock rather than cash. That is permitted under the agreement between the two companies.

Such a move would preserve cash for Occidental, but it would be dilutive to shareholders. The company’s market value now stands at just $13 billion.

Write to Andrew Bary at andrew.bary@barrons.com