# Occidental Petroleum (OXY) Sector: Oil and gas exploration and production | Field | Value | |---|---| | Price | $56.90 | | Market cap | $57B | | Intrinsic value source | Analysts | | Data as of | 2026-11-11 | | Next earnings | 2027-02-09 (estimate) | Analysts: Leaning bullish Picks: Research only Discount category: Close to intrinsic value ## In short The market prices Occidental with caution because its cash flow follows the oil price and Berkshire Hathaway's preferred stock comes first, and only lower debt and the 2030 cash flow plan can change this. ## Themes and gap - Themes: Power and energy (power-energy), High debt (leverage), New management (management-change) - Gap type: Slow (slow) - Why: Only several years of lower debt, lower costs and the preferred redemption from August 2029 can lift the value for common shareholders. ## About Occidental Petroleum (Occidental) produces oil, natural gas liquids and natural gas in the United States, the Middle East and North Africa. Its largest areas are the Permian Basin, the Rockies and the Gulf of America in the United States, and Oman, Algeria and the Al Hosn and Dolphin gas projects in the United Arab Emirates and Qatar. In Q3 2026, it produced 1,427 thousand barrels of oil equivalent per day, of which 1,203 thousand came from the United States. It also has a midstream and marketing segment and a low carbon business that builds the STRATOS direct air capture plant, and it owns a share of Western Midstream Partners. On January 2, 2026, Occidental sold its chemical business, OxyChem, to Berkshire Hathaway for $9.7 billion in cash. Berkshire Hathaway also holds Occidental's preferred stock, warrants for 83.9 million common shares at $59.59 per share and a large block of common shares. The common shares trade on the New York Stock Exchange. The head office is in Houston. Richard Jackson is President and Chief Executive Officer. ## Thesis The market prices Occidental with caution for three reasons. Its cash flow moves strongly with the oil price: each $1 per barrel changes annual cash flow by about $265 million before tax. The preferred stock that Berkshire Hathaway holds takes about $680 million a year in dividends before common shareholders. And most of the plan to raise annual sustainable cash flow by $4.0 billion by 2030, at about $65 WTI, is still ahead. For the shares to earn more, three things must be true. Occidental must keep cutting debt toward its new milestone of $6 billion of principal debt, after it reached $10.0 billion in Q3 2026. It must deliver the planned cost savings, a lower decline rate and lower sustaining capital, so that cash flow grows even at lower oil prices. And it must build enough cash to redeem the preferred stock from August 2029. The Q4 2026 report and the 2027 plan, expected in February 2027, are the next test. A fall in the oil price is the main risk to this timeline. ## Checkpoints - Nov 9, 2026: Q3 2026 results: debt and free cash flow. Status: Passed. Watch: Principal debt near $10 billion and free cash flow of $2 billion or more in the quarter pass; higher debt fails. Outcome: Principal debt fell to $10.0 billion, and free cash flow before working capital was $2.8 billion. - Feb 9, 2027 (estimate): Q4 2026 results and the 2027 plan. Status: Pending. Watch: Lower principal debt and a 2027 plan with lower sustaining capital and costs pass; higher spending or debt fails. - 2027 (estimate): Start of the STRATOS direct air capture plant. Status: Pending. Watch: Full start-up and CO2 injection within the $1.8 billion cost estimate pass; more delays or a higher cost fail. ## Balance sheet - Cash: $3.9B - Debt: $10.0B - Net debt: $6.1B - Undrawn credit line: $4.2B, to June 2028 - Ratings: Moody's Baa3, Fitch BBB, S&P BB+ Occidental funds itself with cash flow, senior notes and preferred stock. At September 30, 2026, cash and cash equivalents were $3.9 billion, and principal debt was $9,983 million, against about $20.4 billion at December 31, 2025. Occidental repaid this debt mainly with the proceeds of the OxyChem sale and with free cash flow. Annualized interest on the debt fell from about $1.24 billion to about $655 million. Occidental has no debt maturities in 2026 and only $48 million in 2027. The $4.2 billion revolving credit facility, which ends on June 30, 2028, was undrawn. Moody's rates the debt Baa3, Fitch BBB and S&P BB+. The preferred stock that Berkshire Hathaway holds has a face value of $8.49 billion and an 8% dividend, and Occidental plans to redeem it from August 2029. At October 31, 2026, there were 999,894,745 common shares. There were also 16.5 million listed warrants at $22.00 per share and 83.9 million Berkshire Hathaway warrants at $59.59 per share. The quarterly dividend is $0.28 per share. As of 2026-09-30. Sources: - https://www.sec.gov/Archives/edgar/data/797468/000162828026072193/oxyex9919-30x26earningsrel.htm - https://www.sec.gov/Archives/edgar/data/797468/000162828026072198/oxy-20260930.htm - https://www.oxy.com/siteassets/documents/investors/quarterly-earnings/oxy3q26conferencecallslides.pdf ## Dividends - Dividend yield: 1.8% (last 12 months, at the current price) - Paid per share, last 12 months: $1.04 (4 payments) - Current annual rate: $1.12 ($0.28 x 4 a year) - Payout ratio: 60% of the earnings of the last fiscal year (the year ended 2025-12-31) - Latest ex-dividend date: 2026-09-10, $0.28 per share - Growth from 2020 to 2025: 3.2% a year - Growth from 2015 to 2025: -10.7% a year Dividends per share by year: 2016: $3.02, 2017: $3.06, 2018: $3.10, 2019: $3.14, 2020: $0.82, 2021: $0.04, 2022: $0.52, 2023: $0.72, 2024: $0.88, 2025: $0.96. Source: company filings and market data, read on 2026-11-11. ## Recent events - 2026-11-09: Occidental reported Q3 2026 results. Adjusted EPS from continuing operations was $1.91 and reported EPS was $1.61. Production was 1,427 thousand barrels of oil equivalent per day, above the middle of guidance. Free cash flow before working capital was $2.8 billion. Principal debt fell by $1.8 billion in the quarter to $10.0 billion, and Occidental set a new milestone of $6 billion. - 2026-08-05: Occidental reported Q2 2026 results. Adjusted EPS was $2.40 and reported EPS was $2.75. The worldwide realized oil price was $96.78 per barrel, against $69.91 in Q1 2026. - 2026-05-05: Occidental reported Q1 2026 results. Adjusted EPS from continuing operations was $1.06. Reported EPS was $3.13, which included a gain of about $3.1 billion after tax from the sale of OxyChem. - 2026-04-30: The board appointed Richard Jackson, the Chief Operating Officer, as President and Chief Executive Officer from June 1, 2026. Vicki Hollub retired as Chief Executive Officer and stayed on the board. - 2026-02-18: Occidental reported 2025 results. It raised the quarterly dividend by more than 8% to $0.26 per share. Worldwide proved reserves at the end of 2025 were 4.6 billion barrels of oil equivalent. - 2026-01-02: Occidental completed the sale of OxyChem to Berkshire Hathaway for $9.7 billion in cash. A subsidiary of Occidental kept OxyChem's legacy tort claims and environmental liabilities outside the sold plants. ## Latest news and filings - Last earnings: 2026-11-09 (8-K: https://www.sec.gov/Archives/edgar/data/797468/000162828026072193/) - Next earnings: 2027-02-09 (expected; the company has not confirmed it) | Filed | Form | Headline | Period end | XBRL document | Link | | --- | --- | --- | --- | --- | --- | | 2026-11-09 | 10-Q | Quarterly report for the period ended Sep 30, 2026 | 2026-09-30 | oxy-20260930 | https://www.sec.gov/Archives/edgar/data/797468/000162828026072198/oxy-20260930.htm | | 2026-11-09 | 8-K | Earnings release | | oxy-20261109 | https://www.sec.gov/Archives/edgar/data/797468/000162828026072193/ | | 2026-10-13 | 8-K | Earnings release | | oxy-20261013 | https://www.sec.gov/Archives/edgar/data/797468/000162828026065586/ | | 2026-08-05 | 10-Q | Quarterly report for the period ended Jun 30, 2026 | 2026-06-30 | oxy-20260630 | https://www.sec.gov/Archives/edgar/data/797468/000162828026053388/oxy-20260630.htm | | 2026-08-05 | 8-K | Earnings release | | oxy-20260805 | https://www.sec.gov/Archives/edgar/data/797468/000162828026053377/ | | 2026-07-10 | 8-K | Earnings release | | oxy-20260710 | https://www.sec.gov/Archives/edgar/data/797468/000162828026047886/ | | 2026-05-05 | 10-Q | Quarterly report for the period ended Mar 31, 2026 | 2026-03-31 | oxy-20260331 | https://www.sec.gov/Archives/edgar/data/797468/000162828026030584/oxy-20260331.htm | | 2026-05-04 | 8-K | Change of directors or officers and Shareholder vote results | | | https://www.sec.gov/Archives/edgar/data/797468/000095015726000569/form8-k.htm | | 2026-03-09 | 8-K | New material agreement and Change to shareholder rights or bylaws | | | https://www.sec.gov/Archives/edgar/data/797468/000095015726000265/form8-k.htm | | 2026-02-19 | 8-K | Investor disclosure | | | https://www.sec.gov/Archives/edgar/data/797468/000095015726000166/form8-k.htm | Every filing on SEC EDGAR (CIK 797468): https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000797468&type=&dateb=&owner=include&count=40 ## Risks - High: Earnings and cash flow depend on oil and gas prices. Occidental estimates that each $1 per barrel change in oil prices changes annual cash flow by about $265 million before tax. The high oil prices of 2026 came partly from conflict in the Middle East and can fall fast. - Medium: The preferred stock of $8.49 billion has an 8% dividend, and Occidental cannot redeem it before August 2029. Until then, every dollar paid to common shareholders above $4.00 per share in 12 months forces a redemption at a 10% premium. - Medium: Occidental produces oil and gas in Oman, Algeria, the United Arab Emirates and Qatar. War, sanctions or attacks in the region can stop production or exports. - Medium: The low carbon business spends large amounts on new technology. The capital cost estimate of the STRATOS direct air capture plant rose to $1.8 billion, and the plant needs repairs before full start-up. - Low: Occidental kept OxyChem's legacy tort claims and environmental liabilities, and it is a party to remediation and lawsuits at sites such as the Diamond Alkali Superfund Site. Remediation costs and court decisions can be higher than its reserves. ## Links - Page: https://picks.utilarium.app/company/OXY/ - History of changes: https://picks.utilarium.app/company/OXY/history/ - JSON with full history: https://picks.utilarium.app/data/company/OXY.json > Picks is a personal record of stock picks. It gives general opinions about stocks, including a "Top pick" label. They are not tailored to your needs, goals or risk tolerance. Kevin is not a registered adviser and relies on the general-advice exemption in Canadian securities law (NI 31-103 s.8.25). Do your own research, or ask a registered adviser. Kevin may hold any stock on this site. 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