Occidental Petroleum’s latest activity in West Texas signals a powerful story of doing more with less.
Despite reducing its full-year capital expenditure guidance by $200 million and cutting domestic operating costs by $150 million in Q1 2025, Oxy continues to maintain — and even expand — its drilling footprint in the Permian Basin.
Permit Growth Defies Budget Cuts
- H1 2024 Permits: 316
- H1 2025 Permits (actual + forecast): 387
- This marks a 22.5% increase in permit filings year-over-year.
The company’s Q2 2025 forecast adds another 110 new well permits, underscoring Occidental’s ability to optimize operations while scaling activity.
Efficiency Gains Fuel Momentum
Occidental reported a 17% improvement in drilling duration per well and an 18% reduction in drilling costs compared to 2024. These gains have allowed the company to reduce its rig count by two rigs while maintaining production targets.
CEO Vicki Hollub explained:
“Our focus on efficiency and disciplined capital deployment allows us to maintain robust production levels while optimizing costs. We’re leveraging technological advancements and refined processes to maximize value from our existing assets.”
The Takeaway
Occidental’s 2025 strategy showcases how efficiency improvements can offset capital constraints, enabling sustained — even increased — drilling activity. As commodity prices remain volatile, Oxy’s model of capital discipline combined with operational excellence is setting a strong example in the basin.
