OCCID.PETROL CORP (OXY) Q1 2026 Earnings Call Transcript
Bullish Other 51.22B USA
Next Earnings
2026-05-12
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Oxy delivered 2025 with record production, strong free cash flow, significant debt reduction, and an 8% dividend raise, while guiding a leaner 2026 capex plan and continued portfolio optimization.
⭐ Key Highlights
Record production and cost efficiency
Oxy achieved a record annual production of 1.434 million BOE/d in 2025 while cutting total capital spend and operating costs, boosting cash flow.
Debt reduction and balance sheet strengthening
Repurchased $4 billion of debt in 2025 and completed the OxyChem sale, reducing principal debt to about $15 billion with a tender expected to bring it to $14.3 billion.
Strong free cash flow and dividends
Generated approximately $4.3 billion of FCF before working capital and announced an 8% increase to the quarterly dividend.
Strategic portfolio transformation
Sale of OxyChem completed to sharpen focus on high-return oil and gas assets; total resource base now 16.5 BBOE with >30 years of low-cost development and 84% breakeven below $50/bbl.
2026 guidance and capex discipline
Capital spending guidance for 2026 set at $5.5–$5.9 billion (excludes OxyChem), with production expected around 1.45 MBOE/d and 70% of capex directed to U.S. onshore; STRATOS ramp and mid-cycle projects highlighted.
✔Positive Signals
- Record 2025 production and significant operating cost reductions
- Substantial debt reduction and deleveraging progress
- 8% dividend increase signaling confidence in cash returns
- Completion of OxyChem sale and strengthened balance sheet
- Strong free cash flow generation and improved midstream performance
✖Negative Signals
- First-quarter 2026 volumes expected to be weaker due to winter storm-related downtime and turnarounds
- Near-term reliance on oil price stability given lower-for-longer price environment
- Limited near-term visibility on further strategic M&A; focus remains on internal optimization
- Some 2027 visibility remains uncertain as guidance emphasizes sustaining capital and mid-cycle investments
- GoA waterflood and STRATOS ramp involve execution risk and timing that could affect near-term cash flow
📊Financial Results
- Q4 adjusted net income of $0.31 per diluted share; reported loss of $0.07 per diluted share due to OxyChem-related charges
- Q4 production exceeded guidance midpoint by 21,000 BOE/d, driven by U.S. onshore strength
- Q4 domestic operating expenses at the lowest level since 2021 at $7.77/BOE
- 12-month 2025 results: debt repaid of $13.9B over 20 months; 2025 free cash flow before WC of $4.3B
🔮Future Guidance
- 2026 capital spending guidance of $5.5–$5.9B (excluding OxyChem), with production around 1.45 MBOE/d
- Expect ~$500M in oil and gas cost savings and ~$200M in midstream savings in 2026, plus ~$365M in interest savings
- STRATOS Phase 1 online in 2026 with Phase 2 commissioning in 2026; potential partners to de-risk and potentially scale the program
- 8% dividend remains a priority with a balanced, opportunistic approach to share repurchases and debt reductions
- Production growth in 2026 expected about 1%, with first-quarter volumes impacted by winter weather and turnarounds; second-half rebound anticipated
💡Interesting Insights
- Use of Remote Operations Command Centers and AI-enabled monitoring to achieve safety, reliability, and efficiency gains across basins
Detailed Analysis
AI-generated summary of OCCID.PETROL CORP earnings call transcript.
Occidental achieved a standout 2025 with record production of 1.434 MBOE/d, substantial cost reductions, and a disciplined deleveraging path including the OxyChem sale that lowered debt to about $15B and a tender to $14.3B. Free cash flow reached roughly $4.3B before working capital, and cash flow from operations rose 27% on a normalized basis excluding OxyChem. The company also reduced operating expenses and capex, enhanced reserves replacement, and expanded its high-return oil and gas portfolio, culminating in an 8% dividend increase and a stronger balance sheet. For 2026, Oxy plans $5.5–$5.9B in capex, ~1.45 MBOE/d production, a continued focus on cost efficiency, a ramp of STRATOS, and ongoing share repurchases and debt reduction, supported by a resilient capital allocation framework even in a lower oil price environment.
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