U.S. oil and gas producer Occidental Petroleum Corp. is nearing an agreement with activist investor Carl Icahn to halt a proxy battle in return for board seats, according to a person familiar with the matter.

The agreement could put an end to a bitter fight over Occidental's ill-timed purchase of rival Anadarko Petroleum last year, a bet on the continued growth of U.S. shale. After closing that deal, the market turned against Occidental, with oil prices diving more than 60% this year as the global coronavirus outbreak cut oil demand and OPEC and Russia launched an oil-price war.

If the settlement talks conclude successfully, Icahn associates Andrew Langham and Nicholas Graziano would get board seats, and Icahn would have a say in the naming of a third independent director, the source said.

An announcement could come later this week, alongside an official announcement on the appointment of former Occidental CEO Stephen Chazen as Occidental's new chairman, the source said.

The Wall Street Journal was the first to report that Occidental was nearing a truce in the proxy fight with Icahn.

The oil price collapse has left Occidental with about $40 billion in debt and dwindling means of covering operating expenses. This month it slashed its shareholder dividend and unveiled a new round of spending cuts.

The U.S. oil producer's market value fell to $9.16 billion on March 20, far below the $38 billion it paid last August for Anadarko.

Equity researcher Evercore ISI on March 19 cut its forecast for the company to a $3-a-share loss this year, from no profit previously. Even with the company's recent dividend and capex cuts, it needs Brent oil prices at $38 per barrel to cover both dividend and capital spending, according to Evercore ISI. Brent closed around $27 on March 20.

Icahn holds around 10% of Occidental shares and had promised a proxy fight to win control of the company. Occidental has sharply criticized Icahn and attacked his slate of board nominees as inadequate for the job.

Occidental this month said it would issue a shareholder rights offering, often known as a "poison pill" because it is designed to discourage takeovers by diluting the ownership interest of a hostile party.

Icahn and Occidental were not immediately available for comment.