Occidental Petroleum reduced its principal debt to $10 billion in the third quarter of 2026, marking a major milestone in its balance sheet restructuring as the Houston-based oil producer generated $4.1 billion in operating cash flow from continuing operations.
The company reported net income attributable to common shareholders of $1.6 billion, equivalent to $1.61 per diluted share. Adjusted earnings from continuing operations reached $2 billion, or $1.91 per share, with the difference primarily reflecting losses on derivatives.
Occidental generated $2.8 billion in free cash flow before working capital from continuing operations, a non-GAAP measure, alongside capital expenditures of $1.3 billion.
The company reduced principal debt by $1.8 billion during the quarter, bringing total debt repayments since the beginning of 2026 to approximately $10.4 billion.
The deleveraging follows Occidental’s January sale of its OxyChem chemicals business to Berkshire Hathaway for an adjusted transaction value of approximately $9.5 billion. According to Occidental’s regulatory filings, roughly $7.9 billion in net after-tax proceeds from the divestiture, together with operating cash flow, supported the debt repayments during the first nine months of the year.
Oil and gas production remained resilient despite weaker realized crude prices. Global output averaged 1.427 million barrels of oil equivalent per day, exceeding the midpoint of company guidance.
Strong production from the Permian Basin and Rockies operations helped offset temporary disruptions at certain Gulf of America facilities caused by third-party pipeline constraints and maintenance.
Occidental’s oil and gas segment generated $2.6 billion in pre-tax income, down from $2.8 billion in the preceding quarter. Average worldwide realized crude prices declined 11% sequentially to $85.91 per barrel.
Higher domestic natural gas prices partially offset the decline, with realized prices improving to $1.61 per thousand cubic feet from negative $1.48 in the second quarter.
The midstream and marketing segment experienced a sharper earnings decline, reporting pre-tax income of $55 million compared with $1.3 billion in the previous quarter.
The deterioration reflected narrower natural gas price differentials between Waha and the Gulf Coast, alongside lower crude marketing margins. Nevertheless, adjusted segment performance exceeded the upper end of management’s guidance.
Occidental President and CEO Richard Jackson said the company’s improved financial position would support its longer-term growth and shareholder return objectives.
Management is targeting more than $4 billion in additional annual sustainable cash flow by 2030, potentially creating greater capacity for shareholder distributions.
For investors, the quarter highlights Occidental’s progress in reducing financial leverage while maintaining substantial production and cash generation. However, weaker crude realizations and lower midstream margins underscore the company’s continued exposure to commodity price movements and regional energy market conditions.
By Charles Kennedy for Oilprice.com
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Source: finance.yahoo.com — article syndicated from the publisher’s feed; all rights remain with the original publisher.
