Occidental's Q2 2025 Earnings: Resilience Amid Lower Oil Prices
Highlights
- Operating cash flow: $2.6 billion
- Debt repayment: $7.5 billion (70% reduction)
- Production: 1.4 million BOE per day (exceeded guidance)
- Per barrel cost: Reduced to $8.55
- Free cash flow: $700 million before working capital
- Divestitures: $950 million additional, $4 billion since January 2024
- Adjusted profit: $0.39 per diluted share
Occidental Petroleum Corporation has showcased a robust performance in its second quarter of 2025, achieving significant operational milestones amidst a backdrop of lower oil prices.
Strong Cash Flow and Debt Reduction
The company generated an impressive $2.6 billion in operating cash flow this quarter, allowing Occidental to substantially accelerate its debt reduction. In less than a year following the CrownRock acquisition, Occidental has repaid $7.5 billion of debt, equating to a 70% reduction from the original amount raised.
Production and Cost Management
The company reported production of 1.4 million barrels of oil equivalent per day, exceeding the midpoint of their guidance, partly due to enhanced operational efficiencies and the strategic extension of the Mukhaizna contract in Oman. Moreover, Occidental has managed to significantly reduce its per barrel cost to $8.55, despite increased production from CrownRock.
Financial Performance and Divestitures
Occidental’s financial performance remains resilient, generating approximately $700 million in free cash flow before considering working capital. The company recorded an adjusted profit of $0.39 per diluted share. Additionally, Occidental has announced $950 million of further divestitures, bringing the total to $4 billion since the beginning of 2024. This steady pace of strategic asset sales underscores continued efforts to optimize its portfolio and bolster its balance sheet.
Occidental’s targeted cost efficiencies, robust debt reduction, and strategic divestiture program mark a strong quarter which positions the company well amidst fluctuating commodity prices.