Occidental Petroleum (OXY) said Friday it plans to split its California operating into a separate company, as the energy producer continues its strategic review.

The new publicly traded company will have 8,000 employees and contractors and $4 billion to $5 billion in funded debt after the spinoff. According to Occidental, its California business recorded pretax earnings of $1.5 billion last year.

As a separate company, Occidental’s California operations will form the state’s largest producer of natural gas and its top oil-and-gas producer by gross operated barrels of oil equivalent.

Occidental plans to announce its California management team by the third quarter. The transaction, is expected to be completed by the end of this year or early 2015.

The Los Angeles-based company also said it has asked president and chief executive Stephen Chazen to remain in his current roles through the 2016 annual meeting. Occidental came under fire early last year for initiating a search for a new CEO, while shareholders pushed for the company to keep Chazen.

Like several other oil and gas companies, Occidental has turned to asset sales to focus on more profitable businesses. On Thursday, it unveiled a deal to sell assets in the Hugoton Field for $1.4 billion.

Occidental also hiked its quarterly dividend by eight cents to 72 cents a share, and its board approved the repurchase of another 30 million shares. The current authorization had seven million shares remaining at the end of 2013.

Shares rose 2.6% to $94.67 in early morning trading.

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