$Occidental Petroleum(OXY.US) After divesting OxyChem (its chemical business) and completing the integration of CrownRock, Occidental Petroleum (OXY) now has a purer asset structure and has become an upstream exploration and production (E&P) company highly correlated with oil prices.

FCF Projection Table at WTI Oil Prices of $60/$80/$100

$60 / barrel ~ $4.8 billion

$80 / barrel ~ $9.6 billion

$100 / barrel ~ $14.4 billion

Extremely Low "Break-even Price": Benefiting from excellent extraction efficiency in the Permian Basin (shorter drilling times, lower per-well costs), OXY's current break-even point (WTI) for maintaining production capacity and paying dividends has dropped to the mid-$40s. This means that even under a relatively pessimistic macro expectation of $60 oil, it remains a steady money-making business.

The "Sword of Damocles" of Buffett's Preferred Shares: Berkshire Hathaway holds OXY preferred shares with an 8% annual dividend. This is not only a huge cost of capital but also a major factor suppressing the valuation of common stock. When free cash flow is extremely abundant (especially in an environment above $80), OXY must accelerate the redemption of these preferred shares. Every dollar redeemed will directly translate into long-term profit accretion for common shareholders.

Upward Elasticity (Beta) from Financial Leverage: The market initially had doubts about selling OxyChem (the stable cash cow of the chemical division). However, after repaying $5.8 billion in debt, OXY's profit erosion during oil price upswings has significantly decreased, making it one of the most oil-price-sensitive stocks among U.S. energy giants.

Given its current financial structure, you can think of OXY as an asset with a hard floor safety net at $40 and a high-leverage **"oil price call option"** attached.