Occidental Petroleum Corporation's stock traded at $43.31 on January 13th. According to Yahoo Finance, its trailing price-to-earnings ratio was 31.41, while its forward P/E stood at 21.51.
The company operates in oil and gas, chemical, and midstream and marketing segments, acquiring and developing properties in the United States and internationally.
In its third-quarter 2025 update, Occidental announced the sale of its OxyCam division to Berkshire for $9.7 billion, with closing expected by year-end. After taxes, about $8 billion will be realized. The company plans to allocate $6.5 billion to debt repayment and add $1.5 billion to cash reserves.
This debt reduction is projected to lower annual interest expenses by approximately $350 million to $390 million. Total debt will fall below $15 billion, strengthening the balance sheet.
Operationally, Occidental is preparing its Stratos direct air capture facility for carbon dioxide injection in the first quarter of 2026, targeting enhanced oil recovery. Early tests indicate a 45% production uplift in unconventional wells. Future injections could boost efficiency by 60% to 100%, potentially reducing the need for new drilling and lowering costs.
Third-quarter production averaged 1.46 million barrels of oil equivalent per day. The company generated around $1.5 billion in free cash flow before working capital adjustments. Following the OxyCam sale, net debt is expected to drop to roughly $14.3 billion, helping the company meet long-term leverage targets.
Guidance for the fourth quarter anticipates production between 1.44 million and 1.48 million barrels of oil equivalent per day, with capital expenditures near $1.7 billion. This outlook is supported by commodity prices: West Texas Intermediate crude at $64.93 per barrel, Brent crude at $68.14 per barrel, and natural gas at $3.28 per million cubic feet.
Looking ahead, Occidental plans to sustain operations, grow dividends, resume share repurchases, and retire remaining debt at maturity. The company cites a strengthened balance sheet, enhanced production efficiency from CO2 injection, and strategic capital allocation as positioning it for sustainable growth and shareholder returns.
A previous bullish thesis on Occidental by Magnus Ofstad in May 2025 highlighted the company's low-cost Permian Basin operations, diversified business model, and leadership in carbon capture through the Stratos project. The stock price has remained flat since that coverage, with broader market concerns and operational challenges affecting sentiment. DinoInvestor's recent analysis shares a similar thesis, emphasizing the transformative impact of the OxyCam sale, debt reduction, and upcoming CO2 injection tests at Stratos.