Summary
- Occidental Petroleum is reiterated as a Strong Buy thanks to strategic debt reductions, cost efficiencies, and a transformative OxyChem divestiture. -…
Summary
- Occidental Petroleum is reiterated as a Strong Buy thanks to strategic debt reductions, cost efficiencies, and a transformative OxyChem divestiture.
- OXY expects to use $6.5B from the OxyChem sale for accelerated debt repayment, targeting <$15B debt and ~$350M annual interest savings.
- Management forecasts lower CAPEX, flat-to-slightly-increasing production, and enhanced shareholder returns through opportunistic buybacks and future preferred equity redemption.
- Despite oil market volatility and oversupply risks, OXY’s improving financials and quality position it as one of the best US oil opportunities in today’s market.
guvendemir/iStock via Getty Images
Introduction
Last time I covered Occidental Petroleum (OXY)(OXY:CA), I highlighted how the company’s cost efficiencies, debt repayments, and strategic divestitures position it well to withstand oil market volatility and potential economic downturns, upgrading them
This article was written by
1.82K Followers
**Analyst’s Disclosure:**I/we have a beneficial long position in the shares of OXY either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Seeking Alpha’s Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.
Quick Insights
The $9.7B OxyChem sale, with $6.5B for debt repayment, improves OXY’s credit metrics, provides $350M annual interest savings, and enables greater capital reallocation to high-return oil and gas projects.
OXY guides for lower CAPEX ($6.3–$6.7B in 2026) and flat-to-2% production growth, supporting opportunistic buybacks and a future preferred equity redemption program, contingent on market conditions.
As the holder of the world’s largest proven oil reserves, any conflict or blockade involving Venezuela could cause massive disruptions in global oil supply and trade routes.