[Editor's note: This story was updated at 6:12 p.m. CT March 10.]

Occidental Petroleum Corp. on March 10 slashed its shareholder dividend and unveiled a new round of spending cuts, a day after a collapse in U.S. crude prices to near $30 a barrel fed investor worries about its heavy debt load and shrinking cash flow.

Shares rose 14.6% on March 10 to $14.34 after the cuts were disclosed. On March 9, the U.S. oil producer's market value fell to $12 billion, less than a third of the $38 billion it paid last August for rival Anadarko Petroleum, an ill-timed bet on continued growth of U.S. shale.

That deal ran into a fiscal hurricane with oil prices diving as much as 42% this year. OPEC and Russia launched an oil-price war over the weekend to regain market share from U.S. shale.

The oil price collapse left Occidental with about $40 billion in debt and dwindling means of covering operating expenses after the $2.8 billion dividend and interest costs.

The reduced dividend on common shares and as much as $1.9 billion in new spending cuts will save the company a combined $4.1 billion to $4.3 billion a year.

With the cuts, Occidental can finance its expenses with oil in the low-$30 a barrel range, CEO Vicki Hollub said in a statement. Global benchmark Brent crude was trading around $37 a barrel on March 10, with U.S. crude below $35 a barrel.

“I’m not surprised about the dividend cut because she has broken her pledges so many times in the past," said activist investor Carl Icahn, who has been waging a bitter battle against Occidental.

Icahn, who held about 22.6 million Occidental shares at end of 2019, has criticized the deal as a misplaced bet on oil prices rising and has promised a proxy fight to win control of the company. He told Reuters he was glad Hollub had not been replaced, saying: "if they fired her the stock would have gone up considerably, and I’ve been thinking of buying."

Occidental declined to make Hollub available for an interview. Less than two weeks ago, she had called the dividend “one of the defining characteristics of our company,” and pledged to defend it. Occidental last cut its dividend in 1991.

"We were dumbstruck by today’s announcement," said Occidental investor David Katz, president of Matrix Asset Advisors, who also wants to see board and management changes at Occidental. The company has about 40% of this year's production hedged, but "folded two days after oil prices sold off," Katz said.

The company did not say how much its oil and gas production would be affected by the spending cuts. Occidental pumps about 1.4 million barrels of oil and gas per day, but could see "a low-to-mid single digit production decline over the next 12 months," said Pavel Molchanov, analyst with Raymond James.

An Occidental spokesman declined to say whether the company has approached Berkshire Hathaway's Warren Buffett, who holds $10 billion in Occidental preferred shares, about the dividend cut or forbearance on its payments.

Occidental slashed the common stock dividend to 44 cents a share annually from $3.16 a share, after investors called for a cut, according to a person familiar with the matter.

The savings "should help stabilize the company in the medium to long term, said Matt Portillo, an analyst with Tudor, Pickering, Holt & Co. He said even with the cuts, Occidental’s high debt remains the “overriding concern.”

The company said its latest cuts will bring 2020 capital spending down about 60% from last year, to between $3.5 and $3.7 billion. It will implement additional cost-cutting measures.