Occidental's Robust Quarter Sets Solid Ground for Future

Occidental Petroleum has kicked off 2025 with an impressive first quarter, showcasing strong financial and operational results across its oil and gas, chemicals, and midstream segments. The energy titan reported a $3 billion operating cash flow and managed to produce at 1.39 million barrels of oil equivalent per day (BOE/D), right at the midway point of its production guidance, while operating costs came in significantly below expectations at $9.05 per BOE.

A noteworthy achievement this quarter was the company's substantial cost efficiency in the Permian, with more than a 10% reduction in unconventional well costs. This feat was driven by enhanced well designs and execution in the Delaware Basin, positioning Occidental well to navigate a volatile macro environment without compromising on production levels.

In Oman, Occidental is advancing negotiations with the government to extend the Block 53 contract, which could potentially unlock over 800 million barrels of additional resources, offering promising growth prospects. Simultaneously, the company has made substantial progress on debt reduction efforts, retiring $2.3 billion in debt to date this year and an impressive $6.8 billion in the past ten months.

The chemicals division, OxyChem, excelled with $215 million in adjusted earnings despite operational challenges, while the midstream business outperformed guidance due to strong gas marketing optimization in the Permian.

Looking at the bigger picture, Occidental is positioning itself to improve its free cash flow by approximately $1 billion by 2026, aided by strategic reductions in already-announced capital projects. The company’s efforts to streamline operations while sustaining a robust production pipeline underscore its commitment to maximizing shareholder returns amidst industry fluctuations.