Occidental Petroleum Corporation (OXY) FY2025 10-K and Q2 FY2026 10-Q Summary

Business

From the fiscal 2025 Form 10-K, accession 0001628280-26-009059, unless noted.

Occidental is an oil and gas producer. It sells crude oil, natural gas liquids (NGL) and natural gas, mostly from the United States, with the rest from the Middle East and North Africa. Revenue follows oil prices above all. In 2025 the oil and gas segment had $20.9 billion of the company's $21.6 billion in net sales. In the second quarter of 2026, oil alone was $6.29 billion of $7.05 billion in revenue from customers (10-Q, accession 0001628280-26-053388). Occidental ranks among the largest U.S. oil and gas producers. It holds leading positions in the Permian and DJ Basins and the deep-water Gulf of America, and it is the largest independent oil producer in Oman. Worldwide production averaged 1,434 thousand barrels of oil equivalent per day (Mboe/d) in 2025, and year-end proved reserves were 4,603 million barrels of oil equivalent (MMboe), about 72% of them developed.

The company has two reporting segments.

• Oil and gas. This segment explores for, develops and produces oil and condensate, NGL and natural gas. The company holds leasehold and mineral interests in 8.9 million net U.S. acres.
  • Permian Basin (786 Mboe/d in 2025, about 10% of the basin's oil). It is run as two businesses. Permian Resources develops unconventional horizontal wells on 1.5 million net acres. Permian EOR runs 34 active CO2 floods on 1.4 million net acres, a technique that can raise ultimate oil recovery by 10% to 25%.
  • Rockies and Other Domestic (284 Mboe/d). This is mainly the DJ Basin in Colorado (about 0.5 million net acres, with permits in hand for over 90% of the 2026 drilling schedule), plus the Powder River Basin.
  • Gulf of America (132 Mboe/d). Occidental is the fourth-largest deep-water producer, with 8 floating platforms and 14 active fields. Its "GOA 2.0" secondary-recovery program plans first water injection at Marlin in summer 2026 and at Horn Mountain in 2027.
  • International (232 Mboe/d). This covers Algeria (Blocks 404a and 208, 28 Mboe/d), Oman (operator of Blocks 9, 27, 53, 62 and 65, 72 Mboe/d; Block 53 received a 15-year extension in 2025), the Dolphin project in Qatar (24.5%, 40 Mboe/d) and Al Hosn Gas in the UAE (40%, 283 MMcf/d of gas plus 42 Mbbl/d of NGL and condensate). Much of the international output comes under production sharing contracts. Under these contracts, Occidental's share of volumes falls when prices rise.
• Midstream and marketing. This segment moves and sells the company's own and third-party production. It has about 750 Mbbl/d of take-or-pay crude pipeline capacity to the Gulf Coast. It also holds equity stakes in Western Midstream Partners (WES; Occidental's combined share of WES net income was 39.0% at June 30, 2026, per the 10-Q) and in the Dolphin pipeline (24.5% of a 3.2 Bcf/d line from Qatar to the UAE and Oman). Earnings swing with Midland-to-Gulf-Coast oil spreads and Waha-to-Gulf-Coast gas spreads. The segment also includes Al Hosn's sulfur sales and Oxy Low Carbon Ventures (OLCV). OLCV is building STRATOS in Ector County, Texas, a direct air capture plant designed for up to 500,000 tons of CO2 a year, with operations expected to begin in 2026. It is a joint venture with BlackRock, which had funded its full $550 million commitment by June 30, 2026 (10-Q).

Portfolio change. The chemical business is gone. Occidental sold OxyChem to Berkshire Hathaway for $9.7 billion in cash. The sale closed January 2, 2026, and the adjusted price was $9.47 billion after working-capital and post-close adjustments (10-Q). OxyChem is reported as discontinued operations for all periods. A subsidiary, Environmental Resource Holdings, kept OxyChem's legacy tort and environmental liabilities. Occidental also guaranteed indemnities in favor of Berkshire Hathaway. That retained exposure is why environmental remediation remains a large item for what is now a pure oil, gas and midstream company. The 2025 production growth came largely from CrownRock, acquired in August 2024. Anadarko, an earlier acquisition, is the source of the Tronox tax dispute described below.

The company had 10,412 employees in continuing operations at year-end 2025, excluding OxyChem.

Risk factors

From the fiscal 2025 Form 10-K, Item 1A, accession 0001628280-26-009059. The second-quarter 2026 10-Q reports no material changes.

• Commodity prices drive results, and the OxyChem sale increased that exposure. The company says that without the chemical business it is more exposed to oil, NGL and gas markets. It held no commodity hedges at year-end 2025. It added crude collars in February 2026 (see below). Under the 10-K's 2026 budget, each $1 per barrel change in WTI moves pre-tax cash flow by about $240 million. A $0.50 per Mcf change in domestic gas moves it by about $120 million, and a $0.25 change in the Midland-to-Gulf-Coast oil spread by about $55 million.
• Anadarko's Tronox tax refund. The IRS disallowed the deduction behind an $881 million tentative refund that Anadarko received in 2016, which relates to its $5.2 billion Tronox settlement payment. The U.S. Tax Court heard the case and may rule at any time. If Occidental loses, it would have to repay about $2.4 billion as of June 30, 2026 (roughly $1.4 billion of tax and $1.0 billion of interest, per the 10-Q). Any appeal would require bonding or paying the tax within 90 days. The liability is already recorded, so a loss would hit cash rather than earnings.
• Retained environmental liabilities. Remediation reserves were $1.85 billion across 149 sites at June 30, 2026, and reasonably possible additional losses could reach $1.9 billion (10-Q). The largest exposure is the Diamond Alkali Superfund Site on the Lower Passaic River. There, a December 2024 court order accepted the EPA's view that Occidental is responsible for about 85% of the cleanup costs for two operable units. The EPA estimates those costs at $1.4 billion and $440 million, and the work is expected to take ten to twenty years. The company's appeal is fully briefed. Occidental also carries post-closing indemnities to Berkshire Hathaway for OxyChem.
• Indebtedness and credit ratings. Leverage limits flexibility. A downgrade would raise borrowing costs and collateral demands. In the 10-Q, ratings were Baa3 (Moody's), BBB (Fitch) and BB+ (S&P).
• Government, tax and geopolitical risk. Occidental operates in Oman, Algeria, Qatar and the UAE. It faces windfall or industry-specific taxes, the 15% corporate minimum tax, uncertainty over clean-energy credits under the IRA and the One Big Beautiful Bill Act, tariffs, sanctions and expropriation. A separate IRS review of the 2022 legal-entity reorganization, which produced a $2.7 billion tax benefit, remains open.
• Operational hazards. These include blowouts, spills, hurricanes and cyber-attacks. Deep-water Gulf of America operations carry added technical, logistical and recovery-time risk.
• Health, safety, environmental and climate regulation. Rules on methane and other emissions, carbon pricing and permitting could raise costs, delay development or cut demand. This could also lead to reserve write-downs.
• Carbon management may not pay off. STRATOS and the CCUS hubs depend on unproven commercial-scale technology, on government incentives and on a carbon-removal credit market that "is not well established". Underperformance could force impairments.
• Reserve replacement and estimation. Production declines unless the company replaces reserves. Reserve estimates rely on judgment, and a 5% change would move DD&A by about $0.65 per boe, or about $350 million of annual pre-tax income.
• Operating inputs. These include the supply of water and sand, limits on disposing of produced water in seismically active areas of the Permian, and access to enough CO2 for EOR floods.
• Other risks. As general partner of WES, Occidental is exposed to conflict-of-interest claims. Insurance does not cover every loss. Acquisitions and divestitures, including OxyChem, may bring unexpected liabilities.

Management's discussion: fiscal 2025

From the fiscal 2025 Form 10-K, Item 7, accession 0001628280-26-009059. All figures are continuing operations, which exclude OxyChem.

In 2025, lower oil prices outweighed higher volumes. WTI averaged $64.81, down from $75.72, and Occidental's worldwide realized oil price fell to $64.60 from $75.05. Net sales slipped to $21.59 billion from $22.02 billion. A full year of CrownRock production raised total output 8% to 1,434 Mboe/d, with the Permian up 18% to 786 Mboe/d. Higher domestic gas prices also helped. Income from continuing operations fell to $2.11 billion from $2.87 billion. Net income attributable to common stockholders was $1.65 billion ($1.61 per diluted share), versus $2.38 billion ($2.44) in 2024. Preferred stock dividends and redemption premiums took $679 million in each year.

• Oil and gas segment earnings were $4.59 billion versus $5.21 billion. Lower realized oil prices drove the decline, partly offset by higher oil volumes and gas prices. The company cut lease operating expense to $8.94 per boe from $9.75, citing Permian efficiencies and lower energy costs in Oman. DD&A rose to $7.53 billion with the higher volumes.
• Midstream and marketing earnings were $252 million versus $563 million. Excluding special items, results improved because of higher Al Hosn sulfur prices, Permian gas transportation margins and lower long-haul crude costs. However, 2025 included $487 million of impairments and other charges, mostly Occidental's share of charges recorded by equity investees. A $301 million gain on dilution of the WES stake only partly offset them. In 2024, special items had included $489 million of gains on WES unit sales.
• Taxes. The worldwide effective tax rate was 33%, because international income is taxed at rates up to 55%. Moving the mostly domestic OxyChem into discontinued operations increased that effect.
• Discontinued operations contributed $262 million, after a $101 million one-time foreign tax charge and $142 million of legal reserve additions.

Cash flow, capital and balance sheet. Operating cash flow from continuing operations fell because of higher tax payments: some 2024 taxes had been deferred into 2025 under Hurricane Beryl disaster relief. Capital expenditures were $6.4 billion, including $3.4 billion in the Permian, $0.8 billion in the Rockies and $0.5 billion in the Gulf of America, plus $0.7 billion in midstream, mostly for STRATOS. Occidental sold $2.3 billion of non-core assets. These were Permian working interests for about $800 million, DJ Basin royalty and mineral interests for about $840 million, and Permian gas gathering assets for about $580 million. With those proceeds it repaid about $4.0 billion of debt. Warrant exercises brought in $1.0 billion. Dividends were $0.96 per share, and no shares were repurchased under the $3.0 billion program, which had $1.2 billion remaining. After year-end, OxyChem proceeds retired a further $5.4 billion of debt, leaving about $15 billion of principal outstanding. The 2026 capital budget was set at $5.5 billion to $5.9 billion. The stated priority was to use excess cash to cut principal debt to about $14.3 billion, then fund opportunistic buybacks and further debt reduction.

Current quarter: three and six months ended June 30, 2026

From the Form 10-Q for the quarter ended June 30, 2026, accession 0001628280-26-053388, unless noted.

Oil prices surged, and the quarter's earnings came from oil and from marketing. WTI averaged $92.79 in the second quarter, compared with $71.93 in the first quarter and $67.58 in the first half of 2025. Management attributes part of the move to risk premiums from the conflict involving Iran and the resulting disruption around the Strait of Hormuz. It describes those conditions as fragile. The same conflict reduced international sales volumes.

• Second quarter compared with first quarter 2026. Net sales rose to $8.07 billion from $5.2 billion. Income from continuing operations was $3.00 billion, compared with $236 million. Net income attributable to common stockholders was $2.81 billion ($2.75 per diluted share), against $3.18 billion ($3.13) in the first quarter. The first quarter included the $3.1 billion after-tax gain on the OxyChem sale. In the second quarter of 2025, net income attributable to common stockholders was $288 million ($0.26).
• Oil and gas pre-tax earnings were $2.85 billion, up from $1.02 billion. The worldwide realized oil price rose to $96.78 from $69.91, and the crude collars swung to a $105 million gain from a $339 million loss. Partly offsetting this, the domestic realized gas price turned negative, at -$1.48 per Mcf against a NYMEX average of $2.89. Production was flat at 1,433 Mboe/d: higher U.S. NGL and gas volumes offset lower international volumes.
• Midstream and marketing earned $1.34 billion pre-tax, compared with a loss of $87 million. Crude margins benefited from the lag between buying crude and selling it into a rising market. Gas margins benefited from optimizing transportation capacity. Results also included a $220 million gain when Occidental's WES interest was diluted by WES's acquisition of Brazos Delaware II, LLC.
• Interest expense fell to $108 million from $432 million. The first quarter had carried premiums for early debt redemption, and debt outstanding is now lower. The effective tax rate was 23%.

Six months. Net sales were $13.30 billion compared with $10.96 billion. Income from continuing operations was $3.24 billion, versus $1.17 billion. Net income attributable to common stockholders was $5.98 billion ($5.89 per diluted share), compared with $1.05 billion ($1.03). Oil and gas segment earnings rose to $3.87 billion from $2.63 billion on higher oil prices and volumes. Those volumes reflected new Permian wells and the absence of 2025's third-party pipeline disruption in the Gulf of America.

Hedging. In February 2026 Occidental entered two-way crude collars for March through December 2026 on 100 Mbbl/d. The collars have a $55.00 WTI floor and a weighted-average ceiling of $75.89. With oil above the ceiling, they produced $234 million of losses in net sales in the first half, and settlements used $183 million of operating cash flow.

Cash flow and deleveraging. Operating cash flow from continuing operations was $6.5 billion in the first half, compared with $4.8 billion. Discontinued operations used $926 million, mainly for estimated taxes on the OxyChem gain. Capital expenditures were $3.1 billion. After-tax OxyChem proceeds and operating cash funded $8.6 billion of debt repayment, with a $190 million loss on extinguishment. Principal debt fell to $11.8 billion from $20.4 billion at year-end. As of the filing date, no debt matures in the rest of 2026; $48 million matures in 2027, $14 million in 2028 and $352 million in 2029. Cash was $4.2 billion, and the $4.2 billion revolving credit facility, which matures June 30, 2028, was undrawn. Common and preferred dividends paid totaled $0.8 billion. Warrant exercises raised $276 million. The company bought back 2.0 million shares at an average $58.09, but none under the publicly announced program, which still had $1.22 billion available.

Portfolio. Occidental sold non-core operated and non-operated leasehold interests and certain processing plants in the Permian Basin. It recorded a $230 million loss for the first six months of 2026, mostly on the plants. Buyers and prices were not disclosed. In February 2026 it transferred 15.3 million WES units to WES in connection with amended commercial agreements, taking a $105 million charge.

Leadership and priorities. Richard A. Jackson became President and CEO on June 1, 2026, succeeding Vicki Hollub, who remains a director (Form 8-K, accession 0000950157-26-000569). The 10-Q's stated priorities are safe operations, a strong balance sheet, a growing dividend and sustaining base production.

Subsequent events

The 10-Q for the quarter ended June 30, 2026 (accession 0001628280-26-053388) has no separate subsequent-events note. It discloses the following development after June 30:

• Dividend increase. In August 2026 the Board raised the quarterly dividend by 8% to $0.28 per share, payable October 15, 2026, to holders of record on September 10, 2026. This was the second 8% raise of 2026, after the February increase to $0.26.

The 10-Q discloses no acquisitions, divestitures, new borrowings or litigation outcomes after the quarter. After the 10-Q, the Form 8-K filed October 13, 2026 (accession 0001628280-26-065586) reported that in September Occidental temporarily curtailed production at certain Gulf of America facilities. The cause was a third-party gas pipeline constraint plus maintenance. Production was partially restored, and the rest is expected back once the constraint is resolved.