Occidental Petroleum (NYSE: OXY) has update, driven by robust fundamentals, operational excellence, and a balance sheet strengthened by aggressive debt reduction. OXY’s unique positioning at the intersection of traditional oil and gas strength and a forward-looking energy transition strategy.
US Oil & Gas Operator Account Directory – $10
Includes: Account Name, Location, Phone, Website, Wells Drilled….
Key Drivers of the Upgrade
1. Debt Reduction & Divestitures
- Repaid $7.5 billion of debt in the past 13 months, lowering annual interest expenses by roughly $410 million.
- Announced $950 million in additional divestitures, further strengthening its financial profile.
- With no maturities left in 2025 and only $2.2 billion in 2026, OXY has effectively de-risked its near-term debt horizon.
2. Operational Excellence
- Permian well costs down 13% in the first half of 2025.
- $500 million in cost reductions across CAPEX and OPEX, with execution delivering an extra $200 million below plan.
- Seamless integration of CrownRock assets, maintaining efficiency and preserving margins.
3. Strategic Energy Transition Hedge
- The Stratos DAC facility, capable of capturing 500,000 mt CO₂ annually, remains on track for a 2025 start-up.
- Secured major corporate clients such as Airbus, Amazon, and Microsoft.
- Provides long-term carbon credit revenue and a natural hedge against oil demand declines.
4. Macro & Policy Tailwinds
- U.S. rate cuts are expected to support oil demand recovery.
- Trump’s proposed “One Big Beautiful Bill” could deliver $700M–$800M in tax savings across 2025–2026.
- Strong positioning despite potential OPEC supply hikes and broader economic uncertainty.
5. Attractive Valuation & Peer Comparison
- OXY trades at a discount on Price-to-Cash Flow (P/CF) and Price-to-Book (PB) relative to Chevron, ExxonMobil, ConocoPhillips, and Shell.
- Maintains best-in-class free cash flow margins, underscoring undervaluation.
- Updated intrinsic value estimate: $88.85/share (~2x upside vs current levels).
Wells Drilled: Yearly Roll-Up Summary
- 2022 → 544 records
- 2023 → 804 records
- 2024 → 664 records
- 2025 (YTD) → 479 records
Key Takeaways from US Drilling Activity
Overall Trends
- Activity peaked in 2023 with over 800 wells drilled.
- 2024 showed a moderate decline, and 2025 YTD is tracking lower but steady.
- Reflects a disciplined shift in activity levels while maintaining operational stability.
County-Level Insights
- Loving County continues to lead but dropped from 142 wells in 2023 to 105 in 2025 YTD.
- Weld County also saw a decline (97 → 68), signaling reduced Colorado activity.
- Reeves and Howard Counties activity nearly halved.
- Martin (86 → 18) and Midland (60 → 9) posted the steepest declines.
- Smaller counties (e.g., Gaines, Converse, Yoakum) remain stable at low volumes.
- Offshore areas (e.g., Green Canyon, Mississippi Canyon) remain minimal contributors.
Conclusion
Occidental Petroleum is emerging as a best-in-class U.S. oil & gas operator, balancing near-term capital discipline with long-term energy transition strategies. Debt reduction, efficiency gains, and carbon capture investments position OXY to outperform peers while benefiting from favorable policy and macro trends.
