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    OXY
    Earnings call· Mar 2026(Q1 FY26)

    OCCIDENTAL PETROLEUM CORP /DE/ Q1 FY26 earnings call OXY

    May 6, 2026 Source

    Executive summary

    Occidental Petroleum Q1 FY26 — Strong Operational Execution and Deleveraging Progress

    Occidental Petroleum delivered strong Q1 FY26 results, exceeding production and midstream guidance, driven by operational efficiencies and higher commodity prices. The company continued its aggressive deleveraging, reducing principal debt significantly, and aims for further balance sheet strength. Management emphasized a disciplined capital allocation strategy focused on organic development and sustainable shareholder returns amidst market volatility.

    Highlights

    5

    • Exceeded high end of guidance for oil and gas and midstream segments, with 1.426 million BOE/day production, 21,000 BOE/day above midpoint.

    • Generated approximately $1.7 billion of free cash flow before working capital in Q1, 52% higher than Q1 2025 despite similar oil prices.

    • Reduced principal debt to $13.3 billion, down from $20.8 billion in Q3 last year, and below the $14.3 billion target.

    • Midstream segment generated $400 million in adjusted earnings, above midpoint of guidance, driven by gas marketing optimization and higher sulfur prices.

    • Achieved 7% new well cost improvement in 2026 plan, building on successful improvements and delivering top-tier capital efficiency.

    Concerns

    3

    • Middle East disruptions led to lower international production and modest operational constraints at Al Hosn, impacting volumes and sulfur sales.

    • Higher prices under PSC terms resulted in lower net production internationally.

    • Identified an issue related to non-process components of the STRATOS facility, unrelated to the technology, impacting operations schedule.

    Guidance & targets

    10
    CategoryTargetConfidence
    Full-year production
    1.44 million BOE per day
    high materiality
    High
    Full-year Midstream adjusted earnings
    $1.1 billion
    medium materiality
    High
    Principal debt reduction target
    $10 billion
    high materiality
    High
    Incremental free cash flow
    More than $1.2 billion
    high materiality
    High
    Base decline rate
    Below 20%
    medium materiality
    Medium
    New well cost improvement
    7%
    medium materiality
    High
    Sustaining capital
    $5.9 billion
    high materiality
    Medium
    Exploration activity spend
    Around $150 million
    low materiality
    Medium
    STRATOS Phase 1 unit operations online
    2028
    medium materiality
    Medium
    Oil hedges
    100,000 barrels of oil per day
    medium materiality
    High

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    Oil and Gas
    Exceeded the high end of guidance. Domestic outperformance driven by strong new well performance and uptime in the Permian, Rockies, and Gulf of America. Partially offset by lower international production due to Middle East disruptions and PSC impacts from higher oil prices.
    Production: 1.426 million BOE per dayProduction vs. midpoint of guidance: +21,000 BOE per dayDomestic production vs. midpoint of guidance: +33,000 BOE per day
    		————
    Midstream
    Outperformed in the first quarter, generating positive adjusted earnings above the midpoint of guidance. Driven by gas marketing optimization and higher sulfur prices at Al Hosn, partially offset by lower sulfur sales. Also benefited from higher crude marketing margins due to timing impacts of cargo sales and commodity price fluctuations.
    		———$400 million adjusted earnings

    Operational metrics

    20
    Adjusted earnings per diluted share
    $1.06
    Q1 FY26

    Difference from reported earnings largely due to gain on OxyChem sale, derivative process impact, and early debt retirement premiums.

    Reported earnings per diluted share
    $3.13
    Q1 FY26

    Difference from adjusted earnings largely due to gain on OxyChem sale, derivative process impact, and early debt retirement premiums.

    Unrestricted cash
    $3.8 billion
    End of Q1 FY26

    Cash balance at the end of the quarter.

    Principal debt
    $20.8 billion
    End of Q3 FY25

    Principal debt level at the end of Q3 last year.

    Principal debt
    $13.3 billionDown $7.5 billion since Dec last year
    Current

    Current principal debt, below the previously announced $14.3 billion target.

    Interest payments run rate
    $845 million$550 million lower than 2025
    Go-forward

    Reflects progress in deleveraging.

    Near-term debt maturities
    $415 million
    Through end of 2029

    Provides meaningful support through periods of market volatility.

    Domestic lease operating expense
    $7.855% improvement
    Q1 FY26

    Outperformed compared to first quarter guidance due to maintenance schedule optimization and higher production.

    Topsides uptime
    98%
    Q1 FY26

    Record uptime due to focus on maintenance and platform reliability.

    New well performance
    10% better
    2025

    Achieved across every basin where Oxy operates in U.S. unconventional.

    Annual cost savings
    $2 billion
    Since 2023

    Delivered through operational efficiencies.

    Oil and gas cost savings
    $500 million
    2026

    On track for additional savings across new wells, facility costs, operating costs, and transportation.

    New well cost improvement
    7%
    2026 plan

    Building on successful improvements over the last few years.

    STRATOS Phase 2 capacity
    250,000
    Phase 2

    Includes final two air contactor trains and updated pellet reactors.

    EOR production
    100,000
    Current

    Concentrated with low-cost structure after optimization.

    WTI average real price
    $76.32
    Jan 1974 to today

    Average WTI real prices.

    WTI average real price
    $81.67
    2001 to today

    Average WTI real prices for this century.

    WTI average real price
    $60.76
    2001 to today (excluding >$100 years)

    Average WTI real prices for this century, excluding 9 years where prices were above $100.

    Exploration activity spend
    $150 million
    Average

    Typical average spend for exploration activity, reduced this year.

    Total production
    1.43 million
    Q1 FY26

    Exceeded the high end of guidance.

    Industry KPIs

    1
    MetricValueDetails
    FCF shareholder distributions$1.7 billionUSD

    Deals & partnerships

    2
    Multiple (unnamed)Divestiture

    Divested scattered EOR fields and associated facilities as part of EOR portfolio optimization.

    Multiple (unnamed)Acquisition

    Increased working interest in core operated EOR floods as part of EOR portfolio optimization.

    Capital programs

    4
    STRATOS Phase 2completed

    Benefit: 250,000 tons per year

    Construction is now complete. Includes the final two air contactor trains and updated pellet reactors based on the new design.

    STRATOS Phase 1 unit operationsunderway

    Commissioning of Phase 1 unit operations, which includes operating air contactors and the central processing facility, is complete. An issue related to non-process components was identified, impacting the operations schedule, but not expected to impact the capital range for the year.

    Unconventional EOR projectsunderway

    Three commercial projects are getting early construction and long lead items (mainly compression) moving. Expected to be online in 2028. Continued demo work in Midland Basin (Barnett) showing good results with CO2 EOR.

    Gulf of America waterflood projectsplanned

    Investment in Gulf of America waterfloods is contributing to lower decline. Two injectors will be drilled next year related to these projects.

    Risks & headwinds

    4
    Middle East disruptionsBegan mid-March, anticipated to normalize before end of Q2

    Lower international production; modest operational constraints at Al Hosn; lower sulfur sales

    Mitigation: Frontline employees operating safely; continued support from partners and host governments; teams continue to operate safely with no adverse impacts to personnel.

    STRATOS facility non-process component issueCurrently evaluating repair timeline

    Impacts operations schedule

    Mitigation: Not expected to impact Oxy's capital range for the year.

    Higher prices under PSC termsQ1 FY26

    Lower net production internationally

    Increased CO2 cost pressure

    Related to higher oil prices

    Mitigation: Offset by benefits of EOR optimization transactions.

    Q&A highlights

    7

    What are Richard Jackson's top priorities and strategic vision for Oxy as the new CEO?

    Richard Jackson emphasized near-term execution of the 2026 program, continued free cash flow improvement through cost efficiency, lower decline rates, and midstream/LCV improvements. He highlighted driving sustainable cash flow, lowering sustaining capital, and growing the dividend, with opportunistic share repurchases. He also stressed workforce efficiency and leveraging technology like AI.

    “Our focus now is on execution and delivery.”

    asked by Douglas George Blyth Leggate · answered by Richard Jackson

    2 min read6 chapters

    Detailed Narrative

    01

    Portfolio Transformation and Resilience

    Over the past decade, Oxy fundamentally transformed its portfolio to emphasize quality, balance, and durability. Production more than doubled from 650,000 BOE/day to over 1.4 million BOE/day, and reserves increased from 2.2 billion to 4.6 billion barrels of oil equivalent. The portfolio is now 83% domestic, concentrating operations in a more stable environment, with a high-quality, low-cost resource runway of more than 30 years.

    02

    Leadership Succession and Future Focus

    Vicki Hollub will retire as President and CEO on June 1, with Richard Jackson succeeding her. Both will join the Board. Richard Jackson outlined his focus on execution and delivery, emphasizing continued free cash flow improvement through cost efficiency, lower decline rates, and midstream/LCV enhancements. He aims to drive sustainable cash flow, reduce sustaining capital, and grow the dividend, with opportunistic share repurchases.

    03

    Operational Excellence and Resource Improvement

    Oxy achieved industry-leading unconventional well performance in 2025, delivering at least 10% better new well performance than the industry average on a 6-month oil per lateral foot basis. The Gulf of America team recorded a strong topside uptime of 98% in Q1. The company also announced its third Gulf of America exploration discovery in three years, highlighting its subsurface capabilities.

    04

    Cost Efficiencies and Free Cash Flow Growth Initiatives

    Since 2023, Oxy has delivered $2 billion in annual cost savings through operational efficiencies and is on track for an additional $500 million in oil and gas cost savings in 2026. The company targets over $1.2 billion of incremental free cash flow by 2029, driven by continued cost efficiency, lower decline rates, improvements from midstream and LCV, and reduced corporate costs from lower debt interest and workforce efficiency.

    05

    STRATOS Project Update

    Construction of STRATOS Phase 2, adding a second 250,000 tons per year of capacity, is complete. Commissioning of Phase 1 unit operations performed as expected, but an issue related to non-process components of the facility was identified. The company is evaluating the repair timeline and assessing the impact on the operations schedule, though it does not expect this to affect the full-year capital range.

    06

    EOR Portfolio Optimization

    Oxy executed transactions to further optimize its EOR portfolio, increasing working interest in core operated floods while divesting scattered fields and associated facilities. These actions are free cash flow accretive, shifting the portfolio towards higher-margin oil production and meaningfully lower operating costs, thereby improving both the quality and durability of the EOR asset base.

    AI-generated summary of the company’s earnings call. Not investment advice.