OXY
EnergyOccidental Petroleum
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XBRL · SEC EDGAR2018–2025(8yr)| Metric | FY 2018 | FY 2019 | FY 2020 | FY 2021 | FY 2022 | FY 2023 | FY 2024 | FY 2025Latest | YoY |
|---|---|---|---|---|---|---|---|---|---|
| Revenue | $15.6B | $20.4B | $17.8B | $26.0B | $36.6B | $28.3B | $26.7B | $21.6B | -19.2% |
| Gross Profit | $12.7B | $17.6B | $15.4B | $23.2B | $33.4B | $25.1B | $23.6B | — | — |
| Gross Margin | 81.8% | 86.3% | 86.5% | 89.3% | 91.1% | 89.0% | 88.3% | — | — |
| Net Income | $4.1B | -$985.0M | -$14.8B | $2.3B | $13.3B | $4.7B | $3.1B | $2.4B | -23.0% |
| Net Margin | 26.5% | -4.8% | -83.3% | 8.9% | 36.3% | 16.6% | 11.5% | 11.0% | -0.5pp |
| Free Cash Flow | $2.7B | $1.0B | $1.4B | $7.6B | $12.3B | $6.0B | $4.4B | $4.1B | -7.1% |
| FCF Margin | 17.3% | 5.0% | 8.0% | 29.1% | 33.6% | 21.4% | 16.5% | 19.0% | +2.5pp |
| EPS (Diluted) | $5.39 | $-1.22 | $-17.06 | $1.58 | $12.40 | $3.90 | $2.44 | $1.61 | -34.0% |
1. THE BIG PICTURE
Occidental Petroleum is a company in the midst of a high-stakes pivot, attempting to use its dominant position in the Permian Basin to bankroll a transition into carbon capture and sequestration. While the $9.7 billion sale of OxyChem to Berkshire Hathaway provided a critical liquidity injection to reduce debt, Occidental Petroleum remains structurally vulnerable to commodity price swings that recently swung it from a nearly billion-dollar profit to a net loss.
2. WHERE THE RISKS HIT HARDEST
Occidental Petroleum’s "operational outperformance" in oil and gas is frequently neutralized by commodity price volatility; in the fourth quarter of 2025, a 9% drop in crude prices and a 24% drop in domestic gas prices turned a prior-year profit of $964 million into a $68 million net loss (8-K). Its stated "competitive edge" in carbon management is also threatened by environmental and climate regulation, as projects like the STRATOS direct air capture facility rely on "evolving laws and reporting mechanisms" that could impair their commercial viability if policy support shifts (10-K Item 1A). Finally, the goal of "generating resilient free cash flow" is directly endangered by the Tronox tax matter, which exposes Occidental Petroleum to a potential $2.3 billion cash outflow that could force it to "curtail operations or divest assets" (10-K Item 1A).
3. WHAT THE NUMBERS SAY TOGETHER
The financial data reveals a company that is highly efficient at extraction but struggling to find its footing in a volatile market. Occidental Petroleum maintains the highest gross margin in its peer group at 87.9%, yet it recorded the worst revenue growth at -19.2% (XBRL). This suggests that while its "operational expertise" keeps extraction costs low, it lacks the top-line momentum seen in peers like Diamondback Energy (+35.8% growth). The recent quarterly loss was driven by realized gas prices falling to $1.12 per thousand cubic feet, a macro factor that Occidental Petroleum’s integrated midstream segment could not fully offset (8-K). Short interest stands at 5.2% of the float, signaling that a segment of the market remains skeptical of Occidental Petroleum's premium valuation during this transition.
4. IS IT WORTH IT AT THIS PRICE?
At 23.1x Forward P/EP/EPrice-to-Earnings ratio — share price divided by annual earnings per share; how much investors pay per dollar of profit. Higher P/E = higher growth expectations, Occidental Petroleum trades at a significant premium to the peer median of 16.8x (XBRL). According to the market-implied growth rate, investors are pricing in roughly 2.1% long-term growth (CAPM analysis). This premium is difficult to justify when compared to the broader peer group; Occidental Petroleum is the most expensive stock in the set despite having the lowest revenue growth and the highest net debt at $20.5 billion. While the OxyChem divestiture allowed for a $5.8 billion debt reduction, Occidental Petroleum’s 12.6% net margin still trails peers like EOG (25.9%) and Diamondback (26.4%). For the current price to be right, Occidental Petroleum’s low-carbon ventures must achieve commercial scale rapidly to offset the drag from its debt load and shrinking top line.
5. WHAT WOULD CHANGE THIS VIEW?
- Cautious if the U.S. Tax Court rules against Occidental Petroleum in the Tronox case, necessitating a $2.3 billion payment that would reverse recent debt-reduction progress.
- Constructive if the STRATOS facility successfully captures its target 500,000 tons of CO2 per annum, validating the commercial model for Oxy Low Carbon Ventures.
- Constructive if Occidental Petroleum achieves its "resilient free cash flow" goals and reduces net debt closer to the $4.2 billion level maintained by peers like EOG.
6. BOTTOM LINE
Structural Advantage: Integration of Permian Basin production with proprietary CO2-enhanced oil recovery and large-scale carbon capture infrastructure.
Bottom Line: Occidental Petroleum is a high-leverage bet on the future of carbon management that currently trades at a valuation premium its recent performance and balance sheet do not support.
1. Top 5 Material Risks
- Commodity Price Volatility: Occidental Petroleum’s financial results correlate closely to the prices of oil, NGL, and natural gas. Prolonged price declines or market uncertainty can force Occidental Petroleum to record impairments on oil and gas properties, delay capital projects, and reduce the standardized measure of discounted future net cash flows.
- Tronox Tax Matter: Occidental Petroleum faces a potential $2.3 billion liability (as of December 31, 2025) if the U.S. Tax Court determines that a $5.2 billion settlement payment made by Anadarko is not tax-deductible. This includes the repayment of an $881 million tentative cash tax refund received in 2016 plus interest and other benefits.
- Indebtedness and Capital Access: High levels of debt increase vulnerability to economic downturns and rising interest rates. A credit rating downgrade could increase borrowing costs or impair Occidental Petroleum’s ability to access liquidity, potentially forcing Occidental Petroleum to curtail operations or divest assets on unfavorable terms.
- Environmental and Climate Regulation: Compliance with complex health, safety, and environmental laws—including those governing GHG emissions and carbon pricing—requires significant capital investment. Evolving policies could reduce demand for Occidental Petroleum’s products or render certain assets uneconomic, leading to impairments.
- Operational Hazards: Occidental Petroleum faces risks inherent to the energy industry, including well blowouts, pipeline ruptures, and severe weather events. These incidents can result in substantial liability claims, loss of reserves, and significant remediation costs that negatively impact breakeven economics.
2. Company-Specific Risks
- Carbon Management Strategy: Occidental Petroleum’s long-term strategy relies on the commercial success of Direct Air Capture (DAC) and Carbon Capture, Utilization, and Storage (CCUS) projects. If these technologies fail to perform or if the market for carbon sequestration credits does not develop, Occidental Petroleum may be forced to impair investments in subsidiaries, property, and goodwill.
- CO2 EOR Dependency: Long-term oil production from CO2 Enhanced Oil Recovery (EOR) operations depends on reliable access to sufficient volumes of CO2. Supply disruptions from third-party failures or facility issues could directly reduce production levels.
- Western Midstream (WES) Liability: As the parent of the general partner of WES, Occidental Petroleum faces potential legal liability for claims of breach of duty or conflicts of interest related to the master limited partnership.
- Legacy Environmental Liabilities: In connection with the OxyChem Transaction, Occidental Petroleum retained environmental liabilities for legacy sites and holds post-closing indemnification obligations for pre-closing liabilities, which are guaranteed by Occidental Petroleum in favor of Berkshire Hathaway.
3. Regulatory/Legal Risks
- Tax Law Changes: The Inflation Reduction Act (IRA) and the OBBBA have introduced new tax burdens, including a 15% corporate alternative minimum tax and a 1% excise tax on net share repurchases. Changes to these laws or the sunsetting of clean energy credits could increase Occidental Petroleum’s effective tax rate and compliance costs.
- Water and Disposal Regulations: Increased seismic activity has led states to curtail water disposal and suspend permits in Seismic Response Areas (SRAs). Restrictions on the disposal of produced water or the sourcing of water for hydraulic fracturing could disrupt operations and increase operating expenses.
- Offshore Regulatory Complexity: Operations in the Gulf of America are subject to more stringent permitting and regulatory requirements than onshore projects, increasing the potential for operational delays and higher remediation costs.
4. Financial Impact Map
Commodity Price Volatility → Cash Flows / Capital Expenditures → Potential inability to fund planned capital projects, pay dividends, or repurchase shares. Tronox Tax Matter → Income Taxes / Cash Position → Potential $2.3 billion liability for tax refunds, benefits, and interest. Indebtedness → Financial Condition / Stock Price → Downgrades could increase costs of indebtedness and impair access to liquidity. Environmental/Climate Regulation → Proved Reserves / Asset Impairments → Lower product demand or increased compliance costs could result in impairments of oil and gas properties. Carbon Management Initiatives → Goodwill / Intangible Assets → Failure of DAC or CCUS commercial viability could lead to impairment of low-carbon investments.
Recent Filings
| Form | Filed | Period |
|---|---|---|
| 8-K | Feb 2026 | — |
| 10-K | Feb 2026 | Dec 2025 |
| 10-Q | Nov 2025 | Sep 2025 |
| 14A | Mar 2025 | — |
AI-extracted key facts from press releases and SEC filings. Significance 1–10.
Occidental Petroleum Q1 Revenue $5.11B misses estimates, EPS $1.06 beats by 80%
- ▸Q1 revenue $5.11B, down 11% YoY and missing $5.52B estimate
- ▸Adjusted EPS $1.06, beating analyst consensus of $0.59 by 80.3%
- ▸Free cash flow -$112M, down from $466M in prior year quarter
- ▸Five-year revenue CAGR of 7.6% underperforms energy sector peers
- ▸Average five-year EBITDA margin of 54.7% reflects elite profitability
Occidental Q1 EPS $1.06 beats estimates by 63%, revenue $5.11B misses by 7%
- ▸Q1 EPS $1.06 vs $0.65 estimate, +63.08% surprise
- ▸Q1 revenue $5.11B vs $6.84B year-ago, missed estimates by 7.04%
- ▸EPS increased from $0.87 in year-ago quarter
- ▸Company holds Zacks Rank #1 (Strong Buy) status
- ▸FY consensus estimates: $4.55 EPS on $24.62B revenue
Occidental Petroleum CEO Vicki Hollub to Retire; Richard Jackson Named Successor
- ▸CEO Vicki Hollub retiring; Richard Jackson appointed as successor
- ▸Strategic focus shifting toward carbon management and balance sheet transformation
- ▸Leadership transition follows divestiture of OxyChem business unit
- ▸Profit margins declined from 9.8% to 6.3% recently
- ▸High debt levels remain a primary focus for incoming leadership
Occidental Petroleum CEO Vicki Hollub to retire, COO Richard Jackson named successor
- ▸CEO Vicki Hollub to retire this year after four-decade tenure
- ▸COO Richard Jackson appointed as incoming CEO
- ▸Hollub to remain on board of directors and serve as advisor
- ▸Stock reached 52-week high of $64.44 following leadership transition news
- ▸FY2024 net income $1.65B, down 30.7% year-over-year
Occidental Q4 EPS $0.31 beats estimates, revenue $5.42B misses by 7.8%
- ▸Q4 EPS $0.31 beat consensus estimate of $0.19 by 63.2%
- ▸Q4 revenue $5.42B missed consensus estimate of $5.88B by 7.8%
- ▸Total production 1,481 Mboe/d, exceeding guidance range of 1,440-1,480 Mboe/d
- ▸Debt reduced by $5.8B since mid-December 2025 following OxyChem sale
- ▸Worldwide realized crude oil prices fell 15.1% YoY to $59.22 per barrel
Occidental Petroleum completes $1.2B debt tender offer and amends note covenants
- ▸Completed $1.2B cash tender offer for senior notes and debentures
- ▸Increased aggregate purchase cap from $700M to $1.2B
- ▸Removed covenants and shortened redemption notice on 6.125% 2031 Notes
- ▸Quarterly dividend increased to $0.26 per share
- ▸Projected 2028 revenue $29.0B and earnings $3.7B