Occidental Petroleum: Reaching A Fundamental Inflection Point Following The OxyChem Deal
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IWA Research1.82K FollowersFollow5ShareSavePlay(14min)CommentsSummaryOccidental 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 themThis article was written byIWA Research1.82K FollowersFollowAs of 2025, I've got over 10 years of researching companies. In total, throughout my investing life, I estimate that I researched (in depth) well over 1000 companies, from commodities like oil, natural gas, gold and copper to tech like Google or Nokia and many emerging market stocks, which I believe could help me provide useful content for readers. After writing my own blog for about 3 years, I decided to switch to a value investing-focused YouTube channel, where I researched hundreds of different companies so far. I would say my favorite type of company to cover are metals and mining stocks, but I am comfortable with several other industries, such as consumer discretionary/staples, REITs and utilities.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 InsightsHow does the OxyChem sale impact Occidental Petroleum's balance sheet and capital allocation?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.What is Occidental Petroleum's forward guidance on CAPEX and production, and how does it affect shareholder returns?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.How does the Venezuela geopolitical situation impact the oil market?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.Recommended For You