One of the worst-performing stocks among the S&P 500 last year was Occidental Petroleum Corp. (NYSE: OXY). That can happen when a company spends about $57 billion in cash and stock on an acquisition that markets are not crazy about because it piles up so much debt that the slightest breeze could cause it to collapse.

Reducing that debt generally means selling off assets, but Oxy’s share price tumbled by about a third last year and selling into that kind of devaluation would likely have made matters worse.

The next best move Oxy could make is spinning off some of its assets that will result in the write-off of a large piece of debt. And that’s what the company announced Monday that it would do with its controlling 55% stake in Western Midstream Pipeline Partners LP (NYSE: WES).

According to the announcement, Western’s management team was transferred from Oxy to Western in December while Oxy employees fully “dedicated and seconded” to Western in December will be transferred to the pipeline company later this year. Oxy will reduce its stake in Western to less than 50% by the end of 2020 and wipe out about $7.8 billion in debt by giving that to Western common unitholders. According to a report at Bloomberg News, Oxy’s $50+ billion in debt will be reduced by about 15%.

In exchange for taking some debt of Oxy’s shoulders, Western unitholders obtain expanded rights to replace the pipeline company’s general partnership, not a small bonus in the world of master limited partnerships (MLPs) where general partners typically reap the lion’s share of distributable cash. Western also gets a $20 million cash payout from Oxy in the first quarter of this year “in recognition of WES’s historical financial support of existing administrative infrastructure, thereby significantly defraying anticipated transition costs required to establish stand-alone human resources and information technology functions at WES.”

Oxy also announced the sale of $565 million in Houston and Woodlands real estate to the Howard Hughes Corporation. The company said it retired $2 billion of bank debt in the fourth quarter.

Western’s common units traded up about 3.7% in the mid-afternoon Monday, at $21.59 in a 52-week range of $17.46 to $35.75. The 12-month consensus price target is $26.07.

Oxy traded up about 3% at $44.93, in a 52-week range of $37.25 to $68.83. The price target on the stock is $49.55.

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