In concessions to activist shareholder Carl Icahn, Houston-based independent Occidental Petroleum Corp. (Oxy) has named Magnolia Oil and Gas Corp. CEO Stephen Chazen as chairman and appointed three Icahn-picked directors to the board.

Chazen served as CEO from 2011-2016, and as a director from 2010-2017. In 2018, he founded Magnolia, where he will continue to serve as CEO.

Chazen is an ally of Icahn, a forceful critic of Oxy CEO Vicki Hollub and of Oxy’s $57 billion acquisition of Anadarko Petroleum Corp. last year.

The current macro environment “is among the most difficult I have seen in my career,” Chazen said. “I am confident that the board and this management team, led by Vicki Hollub, have the operational experience to help guide Occidental through the challenges ahead, and my goal is to help them succeed.”

He said his “primary focus and occupation remains…serving in the role of CEO of Magnolia,” and that he would not serve in a traditional capacity as an employee or executive of Oxy on any basis, whether interim or permanent.

Chazen said separately his objective at Oxy “is to administer steps to preserve as many nonexecutive jobs as possible, while overseeing actions that help Oxy’s stock market value.”

Chazen “oversaw a sustained period of value creation during his more than 20 years as an executive officer at Occidental, including five years as chief executive officer, and has continued to expand his skill set after leaving the company by leading a special purpose acquisition company through its initial public offering, initial business combination and emergence as a publicly traded oil and gas exploration company,” said Oxy Vice Chairman Jack Moore. 

“Steve’s deep knowledge of Occidental and decades of operational and financial leadership in the industry will benefit the board and add valuable insight as Occidental continues to focus on generating returns for shareholders and managing this challenging macroeconomic environment.”

Oxy earlier this month announced it was slashing its dividend and capital expenditures in response to the coronavirus and tanking oil prices. The firm in mid-March announced a limited duration stockholder rights plan to prevent Icahn from capitalizing on the fall in the stock price to increase his share in the company to 15%.

These measures preceded a downgrade of Oxy debt to junk status by Moody’s Investors Service.

The Anadarko acquisition “continues to burden the company’s balance sheet with over $35 billion of debt and $10 billion of preferred stock, significantly compromising its financial flexibility to confront the collapse in oil prices,” said Moody’s Vice President Andrew Brooks. 

“While Oxy has made progress capturing acquisition synergies, and is itself a low-cost operator with attractive Permian Basin acreage, projected asset sales required for debt reduction have slowed and face considerable headwinds in a challenged oil and natural gas price environment, leaving Oxy with a significantly weakened credit profile whose prospects for near-term improvement are uncertain.”

On Wednesday, Oxy said Andrew Langham, Nicholas Graziano and Margarita Paláu-Hernández have been appointed as independent directors. All three were chosen by Icahn and affiliated entities (the Icahn Group), Oxy said.

Existing directors Spencer Abraham, Eugene Batchelder, Margaret M. Foran and Elisse B. Walter will retire at the annual stockholders’ meeting.

“We believe Oxy is a good company with good assets,” Icahn said. Oxy “can now focus on working with Steve Chazen to enhance value for all Oxy stockholders.”

Oxy also adopted “certain corporate governance-enhancing amendments” to its bylaws, and created an oversight committee that is to include two of the Icahn directors.

The Icahn Group currently owns about 9.9% of Oxy’s outstanding shares.