Occidental Petroleum’s Q2 2026 earnings call gave a clear message about how the company is approaching the Permian Basin: Oxy expects to produce more wells with fewer rigs.
The strongest example came from CFO Sunil Mathew. Based on the operating efficiencies Oxy has achieved in the Permian, the company plans to drop three rigs in the fourth quarter while still bringing 15 more wells online. After adjusting for its Permian EOR transaction, Oxy also said its full-year Permian production guidance is 7,000 BOE/d higher than its original guidance.
Mathew summarized the strategy as “doing more with less.”
That statement becomes more interesting when compared with Oxy’s 2026 well-permit inventory. The attached permit file contains 565 records, with a large concentration in Texas and New Mexico and substantial activity across the Delaware Basin, Midland Basin and Oxy’s mature Permian EOR areas.
Oxy Says Well Delivery per Rig Has Improved Nearly 50%
CEO Richard Jackson provided additional context around the rig reduction.
Oxy said its drilling efficiency is almost 50% better in terms of well delivery per rig. Management specifically pointed to reduced Permian rig requirements as evidence of that improvement and said its use of Simulfrac continues to expand.
The operating equation is straightforward:
fewer rigs + more wells per rig + lower well costs = more production from the same or lower level of drilling resources.
That is important for anyone using rig count as a proxy for oilfield activity. Oxy is explicitly showing that a declining rig count can occur at the same time that the number of wells coming online increases.
Oxy’s 2026 Permit File Contains 565 Records
The attached OXY USA Inc. permit file contains 565 total records.
The file does not contain a specific Province or State column, so the state grouping below is inferred from the County names and coordinates contained in the permit records.
Province / State Permit Records Texas 311 Colorado 109 New Mexico 86 Wyoming 57 Federal Offshore – Gulf of Mexico 2 Total 565
Texas accounts for more than half of the permit records. When Texas and New Mexico are combined, the data shows just how heavily Oxy’s 2026 permit inventory is concentrated in the Permian region.
Where Oxy’s Permit Activity Is Concentrated
Grouping the 565 records by County provides a clearer picture of the areas Oxy is targeting.
The play and basin classifications below are inferred from the County location together with the Field descriptions contained in the permit file. For example, several records explicitly identify fields such as PHANTOM (WOLFCAMP), SANDBAR (BONE SPRING), SPRABERRY (TREND AREA), SEMINOLE (SAN ANDRES) and WATTENBERG.
State County / Area Identified / Inferred Play or Basin Permit Records Colorado Weld DJ Basin – Wattenberg 109 Texas Loving Delaware Basin – Wolfcamp / Bone Spring 76 Wyoming Converse Powder River Basin 57 New Mexico Eddy Delaware Basin 44 Texas Yoakum Permian Basin – Wasson 43 New Mexico Lea Delaware Basin 42 Texas Gaines Permian Basin – Seminole / San Andres / Wasson 42 Texas Reeves Delaware Basin – Wolfcamp 35 Texas Glasscock Midland Basin – Spraberry; some Barnett 31 Texas Martin Midland Basin – Spraberry; some Barnett 30 Texas Midland Midland Basin – Spraberry; some Barnett 19 Texas Ector Permian Basin – Barnett / Canyon 17 Texas Howard Midland Basin – Spraberry 8 Texas Kent Permian Basin – Salt Creek 6 Texas Hale Permian / Northern area – Anton-Irish 3 Federal Offshore Mississippi Canyon Gulf of Mexico 1 Texas Terry Permian Basin – San Andres 1 Federal Offshore Green Canyon Gulf of Mexico 1 Total 565
The largest Permian concentration is in the Delaware Basin.
Loving County has 76 permit records, including fields explicitly identified as Phantom (Wolfcamp) and Sandbar (Bone Spring). Reeves County contributes another 35 Wolfcamp records. Eddy and Lea counties in New Mexico add 86 more records.
Together, Loving, Reeves, Eddy and Lea account for 197 permit records.
That is a substantial underlying development inventory even as Oxy prepares to operate fewer rigs.
The Midland Basin Adds Another Significant Permit Inventory
Oxy also has meaningful permit activity across Glasscock, Martin, Midland and Howard counties.
Those four counties account for 88 permit records.
Most of the records identify the Spraberry Trend Area, with additional permits associated with the Barnett Shale.
This supports an important distinction in Oxy’s “doing more with less” strategy. Oxy does not appear to be reducing rigs because it lacks locations. Instead, management is saying that improved drilling execution allows it to work through its inventory more efficiently.
That is consistent with Jackson’s description of Oxy’s broader development philosophy. The company said it combines subsurface characterization, technology, infrastructure and operations to improve recovery and full-cycle returns, and that this approach has contributed to top-tier capital efficiency in its U.S. unconventional business.
Not All 565 Records Represent New Unconventional Wells
The permit file also highlights why total permit count should not automatically be interpreted as a count of new shale wells.
The records include multiple drilling-operation categories, including horizontal, vertical, directional and sidetrack activity.
There is also considerable activity associated with Oxy’s mature Permian fields.
For example, Yoakum County contains 43 records, largely associated with the Wasson field. Gaines County contains another 42, with many associated with Seminole (San Andres).
This aligns closely with another part of Oxy’s earnings-call strategy: improving recovery from existing assets rather than depending solely on new-well drilling.
EOR Is Another Form of “Doing More With Less”
Oxy has extensive experience using waterflooding and CO2 in the Permian.
Management said waterflooding can add more than 15% oil in place in fields the company already operates, at very low finding and development costs. Oxy also noted that water injection has historically preceded CO2 injection in its large Permian EOR fields.
That matters because Oxy’s strategy is not simply about drilling wells faster.
It is also about extracting more barrels from each existing reservoir.
Oxy said it has been testing advanced recovery techniques in both the Midland and Delaware basins for approximately 10 years. Management reported more than a 45% uplift in estimated ultimate recovery from those pilots.
Using Oxy’s example, an unconventional well recovering around 10% of the resource could potentially move toward 15%, with management saying continued CO2 cycling could ultimately take recovery toward 20%.
In other words, “doing more with less” can mean both more wells per rig and more oil per well.
Workover Rigs and Sidetracks Add Another Layer
Oxy is also finding ways to add production without relying entirely on conventional new-well development.
On the Central Basin Platform and its EOR properties, the company said it has deployed workover rigs to drill sidetracks into tighter conventional rock, applying techniques learned from unconventional development, including hydraulic fracturing.
Management described these as low-cost production additions and said the results are helping derisk additional opportunities. The wells can also have lower decline rates, particularly when CO2 is subsequently applied.
That is another reason the permit inventory should be interpreted carefully. Some records can represent redevelopment, sidetracks or mature-field activity rather than a traditional new horizontal shale program.
What Do the Missing Activity Dates Tell Us?
One of the most notable characteristics of the permit file is the large number of records without an Activity Date.
Of the 565 permit records, 457 have no Activity Date, or approximately 80.9% of the dataset.
Only 108 records contain an Activity Date.
Province / State Total Records No Activity Date % Without Activity Date Texas 311 236 75.9% Colorado 109 81 74.3% New Mexico 86 83 96.5% Wyoming 57 57 100.0% Federal Offshore – Gulf of Mexico 2 0 0.0% Total 565 457 80.9%
The missing Activity Dates should not automatically be interpreted as 457 undrilled wells.
Every record has a Licence Date, while the Activity Date field is much less consistent.
The populated Activity Dates also contain evidence that the field may reflect historical or linked well activity rather than strictly the drilling date associated with the new 2026 permit.
Among the 108 populated records, several Activity Dates precede the corresponding 2026 Licence Date. Examples in the file include Activity Dates from 1986, 2017 and 2022 attached to permits issued in 2026.
The separate Last Activity field is also blank across all 565 records.
For that reason, the best interpretation of the dataset is:
Licence Date is the stronger indicator of when the permit entered the 2026 inventory. Activity Date should be treated as supplemental information, not as a definitive spud status field.
Confirming whether the 457 records with blank Activity Dates have subsequently been drilled would require a separate wells-drilled or spud dataset, which is not included in the two attached sources.
The Permit Data Supports Oxy’s Efficiency Message
The permit inventory provides useful context for Oxy’s earnings-call statements.
Oxy still has a deep footprint of permitted activity across the Permian. The attached data contains 197 records across the core Delaware counties of Loving, Reeves, Eddy and Lea, plus another 88 records across Glasscock, Martin, Midland and Howard counties.
Yet Oxy plans to reduce its Permian rig count by three rigs and still put 15 additional wells online.
That is possible because management says drilling efficiency has improved by almost 50% in wells delivered per rig.
It also fits Oxy’s broader financial plan. The company is targeting lower U.S. new-well costs, lower operating expenses and lower sustaining capital as part of its plan to materially increase sustainable cash flow through 2030.
What This Means for Oilfield Service Companies
The takeaway from Oxy’s comments and the permit data is that rig count should not be viewed in isolation.
For suppliers, a three-rig reduction might initially appear negative. But Oxy is simultaneously forecasting more wells online, higher Permian production guidance and continued development of a substantial permit inventory.
The opportunity therefore becomes more dependent on well throughput and operator efficiency rather than simply the number of active drilling rigs.
The permit file shows meaningful potential activity across the Delaware and Midland basins, as well as mature EOR properties. Meanwhile, the earnings call points toward continued emphasis on drilling efficiency, Simulfrac, sidetracks, advanced recovery, waterflooding and CO2 EOR.
Those trends reinforce Oxy’s central message:
The company is not necessarily trying to do less in the Permian. It is trying to produce more wells, recover more oil and generate more cash with fewer resources.
Author: phinds