Occidental Prioritizes Debt Reduction Amid Flat Production Forecast

U.S. oil producer Occidental Petroleum has set its sights on debt reduction in 2027, announcing flat production and capital spending for the year.

In a post-earnings conference call, Chief Financial Officer Sunil Mathew stated that the company expects to spend $5.9 billion in capital expenditures next year, which is at the higher end of their guidance range of $5.5 billion to $5.9 billion.

This level of investment will result in relatively flat production in 2027, matching last year's levels, Mathew said. The company's focus on debt reduction is centered around reducing principal debt to $10 billion and then further decreasing net debt.

Occidental CEO Richard Jackson highlighted the progress made so far, stating that the company has a 'clear pathway' to add more than $4 billion in annual cash flow by 2030, even before considering the benefit of higher oil prices. This increased 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.