Occidental Petroleum Sets Sights on Debt Reduction, Flat Production Ahead

Occidental Petroleum's Chief Financial Officer Sunil Mathew stated that the company expects flat production and capital spending in 2027. This comes after reporting its biggest quarterly profit since 2022 on Wednesday.

The expected starting point for capital spending is $5.9 billion, including investments in mid-cycle projects. Mathew added that at this level of investment, production would be relatively flat compared to 2026, with a range of up to 1.45 million barrels of oil equivalent per day.

Occidental's focus remains on debt reduction efforts, prioritizing the reduction of principal debt to $10 billion. Once achieved, the company will continue to focus on further reducing net debt. The CEO stated that there is a 'clear pathway' to add more than $4 billion in annual cash flow by 2030.

The additional cash generated from this increase in free cash flow will be used to reduce debt and strengthen the balance sheet ahead of Occidental's planned redemption of Berkshire Hathaway's preferred equity stake beginning in 2029. Share buybacks will be a lower priority until this milestone is reached.