NYSE:OXY
OCCIDENTAL PETROLEUM CORP /DE/
A major US-based integrated energy producer leveraging low-cost Permian Basin assets and investing heavily in carbon capture and renewable hydrogen technologies.
Key Metrics
Investment Thesis
Bull Case
OXY offers an attractive value play for investors seeking exposure to the energy transition through its pioneering carbon capture and hydrogen projects which could unlock future premium valuations. The company's low-cost production base in the Permian Basin provides a strong margin of safety against price declines, ensuring consistent free cash flow generation. Disciplined capital management allows the firm to weather downturns while continuing to pay dividends and manage debt levels effectively.
Bear Case
The downward revenue trend over the last three years suggests a potential long-term decline in production volumes or pricing power that could erode future earnings potential. Heavy reliance on oil and gas prices makes the stock sensitive to macroeconomic shifts that reduce demand for fossil fuels. Significant cash outflows from investing activities of $5.80B indicate ongoing heavy capital needs that may limit flexibility if market conditions worsen.
About OCCIDENTAL PETROLEUM CORP /DE/
Occidental Petroleum Corp (OXY) is a leading international energy company focused on low-cost oil and gas production, carbon capture technologies, and renewable hydrogen solutions. The company serves global markets with a diverse portfolio of upstream assets and advanced engineering services. Key products include crude oil, natural gas, and emerging clean energy solutions aimed at decarbonization.
Analysis
Management Discussion
Recent financial performance reflects a challenging commodity environment, with revenue declining from $36.63B in 2022 to $21.59B in 2025 as oil prices moderated and production volumes adjusted. Despite the revenue contraction, the company maintained robust profitability, generating $2.37B in net profit while returning significant capital to shareholders through dividends and share issuances. However, heavy capital expenditures of $6.43B and substantial debt repayments of $3.75B indicate a strategy focused on deleveraging and strategic asset reinvestment rather than aggressive growth.
Industry Overview
The global energy industry is currently undergoing a structural transformation towards low-carbon solutions while maintaining the necessity of affordable hydrocarbon production. Companies are balancing traditional upstream operations with investments in carbon capture and renewable hydrogen to meet evolving environmental regulations and investor expectations. Occidental Petroleum stands out as a key player navigating this shift by integrating clean technology into its core energy business model.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue | $36.63B | $28.26B | $26.73B | $21.59B |
| Cost of Revenue | $3.27B | $3.12B | $3.12B | $0 |
| Gross Profit | $33.36B | $25.14B | $23.60B | $21.59B |
| Operating Expenses | $19.24B | $18.71B | $19.53B | $18.46B |
| Operating Income | $14.12B | $6.43B | $4.07B | $3.13B |
| G&A | $945.0M | $1.08B | $1.06B | $986.0M |
| Stock-Based Comp | $258.0M | $217.0M | $228.0M | $234.0M |
| D&A | $6.93B | $6.87B | $7.37B | $7.53B |
| Other OpEx | $18.30B | $17.63B | $18.47B | $17.48B |
| Non-Operating Income | $0 | $0 | $0 | $0 |
| Pre-Tax Income | $14.12B | $6.43B | $4.07B | $3.13B |
| Income Tax | $813.0M | $1.73B | $1.17B | $1.02B |
| Continuing Ops | $13.30B | $4.70B | $2.90B | $2.11B |
| Discontinued Ops | $0 | $0 | $182.0M | $262.0M |
| Net Income | $13.30B | $4.70B | $3.08B | $2.37B |
| Minority Interest | $0 | $0 | $22.0M | $43.0M |
| Net to Common | $13.30B | $4.70B | $3.06B | $2.33B |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Current Assets | $8.89B | $8.38B | $9.07B | $8.83B |
| Cash & Equivalents | $984.0M | $1.43B | $2.13B | $1.97B |
| Accounts Receivable | $4.28B | $3.19B | $3.53B | $2.58B |
| Inventory | $2.06B | $2.02B | $2.10B | $1.82B |
| Other Current Assets | $1.56B | $1.73B | $1.32B | $2.46B |
| Long-Term Assets | $63.72B | $65.63B | $76.38B | $75.36B |
| Goodwill | — | — | $668.0M | $668.0M |
| Operating Leases | $903.0M | $1.13B | $937.0M | $908.0M |
| Other LT Assets | $59.64B | $61.28B | $71.61B | $71.31B |
| Total Assets | $72.61B | $74.01B | $85.44B | $84.19B |
| Current Liabilities | $7.76B | $9.15B | $9.52B | $9.43B |
| Accounts Payable | $4.03B | $3.65B | $3.75B | $3.29B |
| Current Leases | $273.0M | $446.0M | $374.0M | $350.0M |
| Taxes Payable | — | — | $471.0M | $159.0M |
| Other Current Liab | $165.0M | $1.20B | $313.0M | $1.66B |
| Long-Term Liabilities | $34.77B | $34.51B | $41.44B | $38.16B |
| LT Operating Leases | $657.0M | $727.0M | $614.0M | $605.0M |
| Other LT Liab | $34.11B | $33.78B | $38.63B | $35.16B |
| Total Liabilities | $42.52B | $43.66B | $50.97B | $47.59B |
| Shareholders' Equity | $30.09B | $30.35B | $34.48B | $36.60B |
| Paid-In Capital | — | $17.42B | $19.87B | $21.01B |
| Retained Earnings | $16.50B | $19.63B | $21.19B | $21.89B |
| AOCI | $195.0M | $275.0M | $179.0M | $202.0M |
| Treasury Stock | $13.77B | — | — | — |
| Total L&E | $72.61B | $74.01B | $85.44B | $84.19B |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Net Income (CFO) | $13.30B | $4.70B | $3.08B | $2.37B |
| Non-Cash Adjustments | $3.51B | $8.92B | $8.28B | $9.70B |
| Working Capital Changes | $-1.0M | $-1.31B | $77.0M | $-1.53B |
| Cash from Operations | $16.81B | $12.31B | $11.44B | $10.53B |
| Capital Expenditures | $4.50B | $6.27B | $7.02B | $6.43B |
| Cash from Investing | $-4.87B | $-6.98B | $-14.59B | $-5.80B |
| Debt Repayments | — | $22.0M | $4.51B | $3.75B |
| Share Buybacks | $3.10B | $1.80B | $27.0M | $0 |
| Dividends Paid | $1.18B | — | — | — |
| Cash from Financing | $-13.71B | $-4.89B | $3.84B | $-4.84B |
| FX Effect | $0 | $0 | $0 | $0 |
| Net Change in Cash | $-1.78B | $438.0M | $693.0M | $-111.0M |
| Beginning Cash | $2.80B | $1.03B | $1.46B | $2.15B |
| Ending Cash | $1.03B | $1.46B | $2.16B | $2.00B |
Frequently Asked Questions
How does OCCIDENTAL PETROLEUM CORP /DE/ make money?
The company's revenue is driven primarily by its upstream oil and gas operations in the Permian Basin, Eagle Ford, and offshore Gulf of Mexico regions. A significant portion of earnings also stems from its specialized engineering services segment, which provides drilling and completion technology to third-party operators. Additionally, Occidental is expanding into a dedicated carbon capture and renewable hydrogen business line to diversify its revenue streams toward low-carbon energy solutions.
What are the main risks for OXY?
The primary risk involves significant exposure to volatile crude oil and natural gas price cycles which directly impact revenue stability. Regulatory headwinds related to environmental policies could threaten the viability of its carbon capture projects or limit exploration activities in key basins. Geopolitical instability in regions where assets are located poses a threat to supply chain continuity and asset safety. High capital intensity required for maintaining reserves and investing in new technologies like hydrogen may strain liquidity if cash flows decline.
What is OXY's competitive advantage?
Occidental possesses one of the lowest breakeven costs in the industry due to its high-quality Permian Basin reserves and efficient operational footprint. The company holds a technological edge in carbon capture utilization and storage (CCUS) through its partnership with Chevron, positioning it as a leader in net-zero energy transition strategies. Its disciplined capital allocation framework allows for consistent cash flow generation even during periods of fluctuating commodity prices.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.