<div id="readability-page-1"><p>Occidental Petroleum Corp. ((OXY)) has held its Q4 earnings call. Read on for the main highlights of the call.</p><h3>President's Day Sale - 70% Off</h3><ul><li>Unlock  hedge fund-level data  and  powerful investing tools  for smarter, sharper decisions  </li><li> Stay ahead of the market with  the latest news and analysis  and maximize your portfolio's potential</li></ul> <p>Occidental Petroleum’s latest earnings call struck a confident tone, underscoring record production, powerful free cash flow and deep structural cost cuts that are reshaping the company’s financial profile. Management acknowledged pressure from lower oil prices, a GAAP Q4 loss and near‑term headwinds, but argued these are outweighed by efficiency gains, deleveraging and disciplined capital returns.</p> <h2>Strong Free Cash Flow and Cash Generation Momentum</h2> <p>Occidental reported about $4.3 billion in free cash flow before working capital in 2025, reaffirming its ability to fund investment, debt reduction and shareholder returns internally. On a normalized basis excluding OxyChem, cash flow from operations rose roughly 27% year over year, demonstrating underlying earnings power despite a weaker commodity tape.</p> <h2>Record Production with Modest, Capital‑Efficient Growth</h2> <p>The company delivered a new annual production record of around 1.434 million BOE per day in 2025, and it expects to edge that higher to roughly 1.45 million BOE per day in 2026. That implies about 1% growth while spending less capital, signaling continued efficiency improvements rather than volume expansion driven by heavy investment.</p> <h2>Accelerated Deleveraging and a Leaner Balance Sheet</h2> <p>Occidental repaid $4.0 billion of debt in 2025, bringing principal debt down to about $15.0 billion after the OxyChem sale. A newly announced $700 million tender offer aims to cut principal debt to roughly $14.3 billion, a reduction of about 40% versus year‑end 2024 levels on announced actions, even as management keeps a longer‑term $10 billion target in sight.</p> <h2>Material Cost Cuts and Capital Efficiency Gains</h2> <p>Management highlighted $275 million in annual operating expense reductions and total spending cuts of $575 million in 2025, including $300 million less oil and gas capital than originally planned. U.S. new well capital costs fell about 15% year over year, with the Permian down 16% and the Rockies down 13%, indicating structural rather than one‑off savings.</p> <h2>Reserves Growth and a Lower‑Cost Resource Base</h2> <p>The company achieved 107% organic reserve replacement and 98% all‑in replacement in 2025, with finding and development costs below depreciation, depletion and amortization. Occidental now sees a 16.5 billion BOE resource base, up from 8.0 billion in 2015, with around 84% breaking even below $50 per barrel and an average breakeven near $38.</p> <h2>Midstream Outperformance and High Operating Reliability</h2> <p>Midstream adjusted pretax income exceeded guidance by more than $500 million for the year and by about $172 million in the fourth quarter, driven by savvy Permian gas marketing and stronger sulfur prices at Al Hosn. Across regions, the company reported record uptimes and safety performance, signaling operational discipline that supports both volumes and margins.</p> <h2>Structural Savings and 2026 Efficiency Ambitions</h2> <p>Since 2023, Occidental has captured roughly $2.0 billion in annual oil and gas cost savings and now targets another $500 million in 2026 from capex, operating and transportation efficiencies. Management is also aiming for about $400 million of midstream savings and approximately $365 million of interest savings, while guiding 2026 capex to $5.5–$5.9 billion, about $550 million below 2025 excluding OxyChem.</p> <h2>Shareholder Returns and Disciplined Capital Allocation</h2> <p>The board approved an 8% increase to the quarterly dividend, underscoring confidence in durable free cash flow. Management reiterated that share repurchases will be opportunistic and disciplined, with incremental excess cash balanced between buybacks and further net debt reduction, while the priority remains a sustainable and growing dividend.</p> <h2>Technology, Automation and Low‑Carbon Projects</h2> <p>Occidental expanded its Remote Operations Command Centers to include the Gulf of America, complementing existing Rockies and Permian hubs that use AI and remote monitoring to manage field issues. The company resolved roughly 300 winter‑storm‑related problems per day remotely in the Rockies and continues to advance its STRATOS low‑carbon project toward phased commissioning and ramp‑up in 2026.</p> <h2>Impact of Lower Realized Oil Prices</h2> <p>Despite operational outperformance, the company faced a material revenue headwind as realized oil prices were about 14% lower in 2025 compared with 2024. This price environment tempered top‑line growth and highlighted the importance of cost reductions and portfolio quality in sustaining free cash flow through cycles.</p> <h2>GAAP Q4 Loss Driven by Transaction Charges</h2> <p>Occidental posted a GAAP loss of $0.07 per diluted share in the fourth quarter, even as adjusted earnings came in at $0.31 per share. The gap was mainly tied to transaction‑related charges from the OxyChem sale rather than underlying operating weakness, a distinction management emphasized for investors.</p> <h2>Debt Still Elevated and Timeline Unclear</h2> <p>While leverage has come down sharply, Occidental still carries about $15.0 billion of principal debt, set to fall to near $14.3 billion after the tender offer. Management reiterated a long‑term goal of about $10.0 billion of debt but did not commit to a specific timetable, leaving the pace dependent on market conditions and capital allocation choices.</p> <h2>Near‑Term Volume and Working Capital Pressures</h2> <p>The company expects first‑quarter 2026 volumes to be lower, reflecting reduced fourth‑quarter activity and working interest, winter storm Fern disruptions and planned Gulf of America turnarounds. Q1 is also likely to see higher working capital outflows tied to property taxes, compensation and interest, creating a temporary drag on reported cash flow.</p> <h2>Midstream Normalization and STRATOS Ramp Risk</h2> <p>Management guided to slightly lower midstream earnings in 2026 as Permian gas optimization opportunities fade with more takeaway capacity in place. STRATOS is still in its ramp phase with remaining capex and a multi‑year path to levelized EBITDA, implying near‑term drag and execution risk even as the project is expected to be a long‑term value driver.</p> <h2>Basin Transitions and Rockies Cost Dynamics</h2> <p>The ongoing shift of activity toward the Powder River Basin introduces higher per‑well costs and greater short‑term variability in spending. While Powder River wells are performing well, the basin transition adds complexity to capital allocation and underscores the need to carefully balance growth, returns and efficiency in the Rockies portfolio.</p> <h2>Guidance and Outlook Emphasize Efficiency‑Led Growth</h2> <p>For 2026, Occidental guided capital spending to $5.5–$5.9 billion, with sustaining capital around $4.1 billion at a $40 oil price and about 70% of oil and gas spend directed to U.S. onshore assets. The company expects average production near 1.45 million BOE per day, more than $1.2 billion of free cash flow improvement from savings and lower interest, reduced U.S. onshore capex, higher mid‑cycle investment and continued debt reduction alongside an 8% higher dividend.</p> <p>Occidental’s earnings call painted a picture of a company leaning hard into efficiency, balance sheet repair and disciplined growth in a choppy price environment. Operational records, deep cost cuts and improving free cash flow underpin higher dividends and gradual deleveraging, while investors will watch execution on STRATOS, basin transitions and midstream normalization as key swing factors ahead.</p></div>

<p>Occidental Petroleum's Q4 earnings call highlighted record production and strong free cash flow, despite facing lower oil prices and a GAAP loss of $0.07 per share. The company reported $4.3 billion in free cash flow for 2025 and achieved a production record of 1.434 million BOE per day. Occidental plans to reduce debt significantly, with a $700 million tender offer and aims for $500 million in additional cost savings by 2026. The board approved an 8% dividend increase, reflecting confidence in sustainable cash flow, while also focusing on technology and low-carbon projects.</p>

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Occidental Petroleum Earnings Call Highlights Cash, Cuts, Growth