Goldman Sachs Suggests Buying Straddles on Occidental Petroleum

Goldman Sachs is out with a research note this morning, where it suggests that traders buy call straddles on Occidental Petroleum OXY to gain exposure to a shale play in California. Goldman Sachs Oil analyst Arjun Murti sees 17% upside to his 6-mth price target on Buy rated OXY. OXY shares are down 11% YTD, as issues related to its promising California acreage position, including the slow pace of “shale” permitting and volatile quarterly natural gas production results, have weighed on its shares. The analysts see the potential for the company to show better progress than currently expected by many investors over the remainder of 2011 and 2012. The analysts suggest buying the November $85 straddle for $7.75. Occidental Petroleum Corporation conducts its operations through various subsidiaries and affiliates. Occidental operates in three segments: oil and gas segment, chemical segment, and midstream, marketing and other segment.