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Adjusted Earnings: $1.91 per diluted share in Q3 2026.
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Reported Earnings: $1.61 per diluted share, with the difference largely from mark-to-market losses in marketing and crude hedges.
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Free Cash Flow: Approximately $2.8 billion generated in the quarter.
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Total Production: Averaged 1.43 million BOE per day, exceeding the midpoint of guidance by 7,000 BOE per day.
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US Onshore Production: Outperformed the midpoint of guidance by 20,000 BOE per day; New Mexico hit record gross operated production of 284,000 BOE per day, up about 23% since January.
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Powder River Basin Production: Record 27 wells brought online in Q3; average net production of 23,000 BOE per day, with more than 70% production growth versus Q1.
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EOR Production: Sidetrack program and conventional horizontals added 10,000 BOE per day as of the end of Q3.
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Domestic Lease Operating Expense: $8.54 per BOE, outperforming guidance for the quarter.
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Midstream and Marketing: Adjusted pre-tax income of $309 million (over $300 million), driven by stronger sulfur pricing and sales volumes at Al Hosn.
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Debt Repayment: Repaid $1.8 billion of principal debt in the quarter; total year-to-date repayments of $10.4 billion; achieved the $10 billion principal debt milestone.
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Cash Position: Ended the quarter with $3.9 billion of unrestricted cash.
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Q4 Production Guidance: Expected range of 1.43 million to 1.47 million BOE per day.
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Full-Year Midstream and Marketing Guidance: $2 billion in adjusted pre-tax income.
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Q4 Capital Spending: Expected approximately $1.3 billion, keeping full-year 2026 capital spending within the original guidance range.
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2027 Capital Spending: Starting point of approximately $5.9 billion, with relatively flat production versus 2026.
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Interest Expense: At $6 billion principal debt, go-forward run rate of approximately $400 million, about $1 billion lower than 2025 interest expense.
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Sustainable Cash Flow Improvement: Expected $700 million to $800 million improvement in 2027 versus 2026, bringing cumulative improvement to approximately $2 billion by year-end 2027, nearly half of the $4 billion-plus 2030 objective.
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Dividend: Second 8% increase to the quarterly dividend for 2026 announced last quarter.
Release Date: November 10, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Occidental Petroleum Corp (NYSE:OXY) exceeded the midpoint of production guidance for Q3 2026, with total production averaging 1.43 million BOE per day, driven by strong US onshore performance.
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The company achieved its $10 billion principal debt milestone ahead of schedule, strengthening its balance sheet and accelerating interest expense savings.
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Occidental Petroleum Corp (NYSE:OXY) generated approximately $2.8 billion of free cash flow in Q3 2026, supported by operational execution and cost discipline.
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Advanced recovery technologies, including AI surveillance on 68% of artificial lift wells, have reduced failure frequency by 22% and supported up to 7% annual production uplift.
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Occidental Petroleum Corp (NYSE:OXY) is on track to deliver more than $4 billion of annual sustainable cash flow improvement by 2030, with $700-800 million expected in 2027 alone.
Negative Points
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Gulf of America production was impacted by third-party gas pipeline constraints and maintenance, with curtailments extending into Q4 2026.
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International volumes were marginally lower due to ethane rejection at Dolphin, and PSC impacts are expected to affect oil production in Oman and Algeria.
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Domestic lease operating expense is expected to increase in Q4 2026 due to higher CO2 costs and increased workover activity.
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Midstream and marketing income is expected to decline in Q4 2026 due to lower gas marketing income and sulfur pricing.
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STRATOS project has faced cost increases and repairs, with full plant start-up delayed to around the end of 2026, impacting near-term cash flow.
Q & A Highlights
Q: How did Occidental arrive at the new $6 billion principal debt milestone, and when could it be reached? A: CFO Sunil Mathew explained that the milestones are tied to leverage metrics. At $10 billion principal debt, debt-to-EBITDA was about 1x at $60 WTI; at $6 billion, it is around 1x at $50 WTI, a level the company wants to maintain long term. At $6 billion, the balance sheet would be the strongest in a decade. Under mid-cycle or current strip prices, Occidental sees meaningful progress toward $6 billion in 2027, potentially reaching a net cash position that year, though management declined to specify timing. Once achieved, the company will balance further principal debt reduction with building cash ahead of the August 2029 preferred redemption and evaluate opportunistic share repurchases.
Q: Does the $4 billion sustainable cash flow improvement plan, including the decline rate reduction from 25% to 20%, translate into lower absolute spending or a pivot back to growth? A: CEO Richard Jackson said the plan has three components: higher-margin, oilier production improving cash from operations even with flat capital and production; capital efficiency, illustr
Source: finance.yahoo.com — article syndicated from the publisher’s feed; all rights remain with the original publisher.
