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OCCIDENTAL PETROLEUM CORP /DE/ (OXY) Q3 2025 Earnings Summary

Executive Summary

  • Solid operational quarter with production at 1,465 Mboed (above the high end), adjusted EPS of $0.64 and GAAP EPS of $0.65; free cash flow before working capital was $1.47B, helped by Permian outperformance, lower LOE and midstream optimization .
  • Mixed print vs Street: EPS beat (actual $0.64 vs $0.50 consensus), while revenue ($6.72B) and EBITDA ($3.24B) were modest misses; margin improved q/q on lower LOE and stronger volumes (especially Permian and Gulf of Mexico) . EPS/Revenue/EBITDA consensus figures marked with * from S&P Global.
  • Guidance pivot: Q4 company production midpoint raised to ~1.46 Mboed; midstream & marketing FY pre-tax income now ~+$400M vs original; OxyChem Q4 guided to $140M and will be classified as discontinued ops starting Q4 .
  • Strategic catalyst: Announced sale of OxyChem to Berkshire; management plans to use ~$6.5B of net proceeds to accelerate deleveraging below $15B principal debt (expected >$350M annual interest savings), enabling a more flexible return-of-capital framework .
  • Near-term stock drivers: execution on raised production guidance, midstream tailwinds (Permian-to-Gulf gas spreads), deleveraging from OxyChem proceeds, and updates on unconventional CO2 EOR scale-up (record Permian, EOR pipeline) .

What Went Well and What Went Wrong

  • What Went Well

    • Production outperformed, reaching 1,465 Mboed; Permian delivered a quarterly record 800 Mboed; Gulf of Mexico hit highest uptime on record; Rockies also exceeded .
    • Cost discipline: domestic LOE beat guidance at $8.11/BOE; total oil & gas LOE fell to $8.69/BOE; operating cash flow before working capital rose to $3.199B despite lower yoy oil prices .
    • Midstream beat: adjusted earnings exceeded the high end of guidance on Permian gas marketing optimization and stronger Al Hosn sulfur pricing; WES equity income was $156M . Quote: “Our teams… navigated market volatility to maximize margins through strategic gas marketing” — CEO Vicki Hollub .

  • What Went Wrong

    • Realizations mixed: Worldwide realized oil rose slightly q/q to $64.78/bbl but remained below prior-year levels; NGL realized price declined q/q to $19.60/bbl; domestic gas realizations only $1.48/Mcf .
    • OxyChem softness: Q3 pre-tax income of $197M came in below guidance on weak global chloro-vinyl pricing; Q4 guided to $140M and moving to discontinued ops .
    • Revenue and EBITDA modest misses vs Street despite operating outperformance (revenue $6.72B vs $6.81B est.; EBITDA $3.24B vs $3.29B est.)* .

Financial Results

Actuals vs prior periods

MetricQ3 2024Q2 2025Q3 2025
Revenue – Total revenues & other income ($USD Billions)$7.15 $6.46 $6.72
Diluted EPS (GAAP) ($)$0.98 $0.26 $0.65
Adjusted Diluted EPS (Non-GAAP) ($)$1.00 $0.39 $0.64
Operating Cash Flow – GAAP ($B)$3.78 $2.96 $2.79
Op. Cash Flow before Working Capital ($B)$3.15 $2.64 $3.20
Free Cash Flow before Working Capital ($B)$1.51 $0.70 $1.47

Q3 2025 vs consensus

MetricConsensus*ActualResult
EPS (Primary)* ($)$0.50*$0.64Beat*
Revenue* ($B)$6.81*$6.72Miss*
EBITDA* ($B)$3.29*$3.24Miss*

Segment pre-tax income

Segment Pre-tax IncomeQ2 2025Q3 2025
Oil & Gas ($B)$0.934 $1.300
OxyChem ($M)$213 $197
Midstream & Marketing ($M)$49 $93

KPIs and operating metrics

KPIQ2 2025Q3 2025
Total Production (Mboed)1,400 1,465
Permian (Mboed)770 800
Rockies & Other Domestic (Mboed)272 288
Gulf of America (Mboed)125 139
International (Mboed)233 238
LOE – Total O&G ($/BOE)$8.93 $8.69
LOE – U.S. ($/BOE)$8.55 $8.11
Realized Oil ($/bbl, worldwide)$63.76 $64.78
Realized NGL ($/bbl, worldwide)$20.71 $19.60
Realized Domestic Gas ($/Mcf)$1.33 $1.48
Capex, net of NCI ($B)$1.95 $1.73

Margin trend

MarginQ1 2025Q2 2025Q3 2025
EBITDA Margin %*50.33%*44.59%*48.84%*

Values marked with * are from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total Company Production (Mboed)Q4 2025Prior implied midpoint not disclosed~1.46 Mboed Raised
Midstream & Marketing Pre-tax IncomeFY 2025Original FY guide (undisclosed)~+$400M vs original Raised
OxyChem Pre-tax IncomeQ4 2025Not provided$140M Lower run-rate vs Q3
OxyChem ClassificationFrom Q4 2025N/ADiscontinued operations from Q4 Classification change
DividendQ1 2026 pay date$0.24/share prior$0.24/share declared (payable Jan 15, 2026) Maintained
2026 Capital ProgramFY 2026 (prelim)N/A$6.3–$6.7B range discussed in Q&A New preliminary range
Balance Sheet/InterestPost OxyChem closeN/AUse ~$6.5B for debt paydown; >$350M annual interest savings expected Strengthened deleveraging path

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1–Q2 2025)Current Period (Q3 2025)Trend
Portfolio transformation / OxyChemFocus on portfolio high-grading and divestitures; cost and capex reductions Announces OxyChem sale; accelerate deleveraging to < $15B principal debt; build more flexible ROC framework Accelerating
Production & PermianQ2: 1.40 MMboed; cost and well efficiency gains; Permian well-cost reductions; midstream optimization 1.465 MMboed (high end beat); Permian record 800 Mboed; raised Q4 midpoint to 1.46 MMboed Improving
Cost structure (LOE/efficiency)U.S. LOE $8.55/BOE in Q2; structural savings across onshore; $500M capex/opex reductions YTD U.S. LOE $8.11/BOE; total O&G LOE $8.69/BOE; continued focus on cost efficiency Improving
Midstream marketingQ2 beat from Permian gas spreads and sulfur pricing Q3 again above guidance; FY midstream raised by ~$400M vs original Strong
LCV / DAC (Stratos)On track to capture CO2 in 2025; DOE/45Q support; broad interest Commissioning milestones; expect KOH circulation in Q4 and CO2 injection in Q1; capex roll-off to $~100M in 2026 Executing
EOR / resourcePilots and modeling; EOR as long-term lever Unconventional EOR 45–100% uplift potential; ~2B BOE EOR opportunity; 3 projects going commercial; +30 projects ready Scaling

Management Commentary

  • “We exceeded the high end of guidance across our oil and gas assets… Our midstream and marketing operations… surpassed the high end of guidance.” — CEO Vicki Hollub .
  • “The sale of OxyChem… will enable us to significantly deleverage and achieve our principal debt target of less than $15 billion… and broaden our return of capital program.” — CEO Vicki Hollub .
  • “Domestic lease operating expenses… notably outperforming guidance at $8.11 per BOE.” — CFO Sunil Mathew .
  • “We recently expanded our Permian resource base by 2.5 billion BOE… placing the Permian as a core value driver for Oxy’s future.” — COO Richard Jackson .

Q&A Highlights

  • 2026 capital framework: base plan $6.3–$6.7B with higher U.S. onshore mix for flexibility; production expected flat to up ~2% in 2026 depending on macro .
  • Deleveraging and ROC: ~$6.5B from OxyChem proceeds toward debt; annual interest expense to drop >$350M; opportunistic buybacks while building cash into 2029 before preferred redemption .
  • EOR commercialization: unconventional EOR pilots support 45% uplift, potential up to 100%; 3 initial projects moving to commercial with ~30 more ready, supported by Permian CO2 infrastructure .
  • Gulf of Mexico waterfloods: projects targeted 40–50% returns; decline rate to improve from ~20% today to ~10% by 2030 and ~7% by 2035; first Kingfield tieback on stream Q2 next year .
  • OxyChem headwinds: global chloro-vinyl oversupply; Q4 OxyChem guided to $140M pre-tax; to be reclassified as discontinued ops from Q4 .

Estimates Context

  • Q3 2025: EPS (Primary) $0.64 vs $0.50 consensus — beat; Revenue $6.72B vs $6.81B — miss; EBITDA $3.24B vs $3.29B — miss. Margin improved q/q on LOE reduction and domestic volume strength* .
  • Trajectory: EPS exceeded consensus in each of Q1 ($0.87 vs $0.76*) and Q2 ($0.39 vs $0.31*), while revenue/EBITDA were mixed across quarters*.
  • Revisions setup: Raised Q4 production midpoint and midstream FY outlook imply upward estimate bias for Q4 and FY midstream, partially offset by OxyChem softness and discontinued classification from Q4 .

Values marked with * are from S&P Global.

Key Takeaways for Investors

  • Execution: Production beat with record Permian output and improved LOE underscores durability of OXY’s cost/operating improvements; watch continuity into Q4 (1.46 MMboed midpoint) .
  • Mix tailwinds: Midstream monetization of Permian gas spreads and Al Hosn sulfur pricing adds a repeatable earnings lever; FY raised by ~$400M vs original .
  • Capital/returns: OxyChem divestiture accelerates deleveraging to < $15B principal debt with >$350M interest savings — a clear path to higher buyback flexibility and lower break-even .
  • Growth optionality: Unconventional CO2 EOR pipeline (~2B BOE opportunity) and waterflood projects in GoM provide mid-cycle, lower-decline barrels and support medium-term free cash flow resilience .
  • Estimate setup: EPS beats alongside raised production/midstream outlook likely bias Street higher on Q4, though OxyChem softness/discontinued ops classification will lower Chemicals contribution .
  • 2026 lens: Preliminary capex range ($6.3–$6.7B) with flat to modest growth and greater U.S. onshore mix increases flexibility under volatile macro .
  • Trading implications: Near term, stock should be sensitive to (i) clarity and timing on OxyChem close/cash deployment, (ii) Q4 production delivery vs 1.46 MMboed, and (iii) midstream capture of gas spreads; dips on Chemicals weakness could be countered by deleveraging and upstream execution .

Notes:

  • All document-based figures are cited. Consensus estimates and EBITDA margins are from S&P Global and marked with *.

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