Occidental Q2 Earnings Beat on Oil Prices and Midstream Strength

Reported earnings were $2.75 per share compared with 26 cents a year earlier.

Total Revenues

Revenues climbed 57.1% to $8.33 billion and surpassed the Zacks Consensus Estimate of $7.18 billion by 16%.

Oil and Gas revenues totaled $6.88 billion, up 37.4% from $5.01 billion in the year-ago quarter. Higher commodity realizations more than offset weakness in domestic natural gas pricing.

Midstream and Marketing revenues jumped 240% year over year to $1.33 billion. Interest, dividends and other income totaled $82 million compared with $43 million a year earlier.

Occidental's Production Tops Guidance

Worldwide production reached 1,433 thousand barrels of oil equivalent per day (Mboe/d), exceeding the high end of management’s guidance of 1,390-1,430 Mboe/d. Strong domestic performance helped total production rise 2.4% year over year.

Permian Resources production averaged 804 Mboe/d, up from 770 Mboe/d in the second quarter of 2025. Production from the region also exceeded the guidance of 783-803 Mboe/d.

Gulf of America output rose to 144 Mboe/d from 125 Mboe/d, benefiting from strong base performance and maintenance optimization.

Rockies and Other Domestic production increased to 280 Mboe/d from 272 Mboe/d.

International production declined to 205 Mboe/d from 233 Mboe/d, partly reflecting disruptions in the Middle East.

OXY's Realized Oil Prices Provide a Lift

Occidental’s worldwide realized crude oil price increased 51.8% year over year to $96.78 per barrel. The average WTI and Brent marker prices were $92.79 and $97.06 per barrel, respectively, up from $63.74 and $66.59.

Worldwide realized natural gas liquids prices advanced 19% to $24.64 per barrel. However, domestic realized natural gas prices were negative $1.48 per thousand cubic feet in contrast to a positive $1.33 in the prior-year period, limiting part of the commodity-price benefit.

OXY's Operational Highlights

Total costs and other deductions declined 4% year over year to $4.55 billion. Oil and gas lease operating expenses slipped 1.6% to $1.12 billion, while transportation and gathering costs increased 3.3% to $463 million.

Depreciation, depletion and amortization expenses rose 1.3% to $1.85 billion. Interest and debt expense fell 60.1% to $108 million, reflecting the company’s accelerated debt-reduction efforts.

In the first half of 2026, the company brought online 256 wells in the Permian and 84 wells in the Rockies region, which boosted domestic production volumes.

Occidental's Cash Flow Strengthens the Balance Sheet

In the second quarter, operating cash flow from continuing operations totaled $5.09 billion. Excluding working-capital movements, operating cash flow was $4.61 billion. Capital expenditures totaled $1.59 billion, resulting in free cash flow before working capital of $3.02 billion.

Occidental reduced principal debt by $1.9 billion during the quarter to $11.8 billion. The company retired $8.6 billion of debt during the first half of 2026 and ended June with $4.15 billion in cash and cash equivalents. Management also raised the quarterly dividend by 8% to 28 cents per share.

OXY Revises Full-Year Production Expectations

For 2026, Occidental now expects total production of 1,423-1,453 Mboe/d compared with earlier expectation of 1,410-1,460 Mboe/d. The outlook includes Permian production of 801-817 Mboe/d and Gulf of America production of 132-136 Mboe/d.

The company projects full-year Midstream pre-tax income of $1.3-$1.5 billion. Net capital expenditures are expected between $5.5 billion and $5.9 billion, while adjusted interest expense is forecasted at approximately $680 million. Exploration expenses are expected to be $290 million.

For the third quarter of 2026, OXY expects production in the band of 1,400-1,440 Mboe/d. Output from the Permian Resources segment is anticipated at 795-8815 Mboe/d. Occidental expects international production volumes for the third quarter of 2026 to be in the range of 225-231 Mboe/d.

In 2026, OXY plans to bring in between 485 and 515 wells online in the Permian and 150-170 wells in the Rockies region.

Zacks Rank of OXY

Occidental currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Releases

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