Occidental Petroleum (OXY) Q4 2025 earnings summary

Executive summary

• Achieved record annual production of 1,481 Mboed in Q4 2025 and 1.4 million BOE/day for the year, exceeding guidance and marking an 8% increase from 2024, with operational outperformance and lower costs.

• Completed the sale of OxyChem in early 2026, using $5.8 billion of proceeds to reduce principal debt to $15 billion, with a further reduction to $14.3 billion targeted.

• Delivered $4.3 billion in free cash flow before working capital in 2025 and $1.0 billion in Q4, with a 27% year-over-year increase in cash flow from operations (excluding OxyChem), despite a 14% drop in oil prices.

• Increased quarterly dividend by over 8% to $0.26 per share, doubling the dividend over four years.

• U.S. assets now account for 83% of production, up from 50% in 2015, with a resource base of 16.5 billion BOE and 84% breaking even below $50 per barrel.

Financial highlights

• Adjusted profit of $0.31 per diluted share in Q4 2025; reported loss of $0.07 per share due to OxyChem sale-related charges.

• Generated $1.0 billion in free cash flow in Q4 2025, with lowest quarterly domestic operating expense since 2021 at $7.77/BOE.

• Midstream segment delivered adjusted pre-tax income exceeding guidance by $172 million in Q4, driven by Permian gas marketing and higher sulfur prices at Al Hosn.

• Over the last 20 months, repaid $13.9 billion in debt, improving leverage metrics and reducing near-term maturities to $450 million over four years.

• Domestic operating cost per BOE decreased 17% since 2023, to $8.35 in FY25.

Outlook and guidance

• 2026 capital spending expected at $5.5–$5.9 billion, a $550 million reduction from 2025 (excluding OxyChem), with 70% allocated to U.S. onshore.

• Production expected to average 1,420–1,480 Mboed in 2026, up 1% year-over-year, even with lower capital levels.

• Anticipates $1.2 billion improvement in free cash flow in 2026, driven by $500 million in oil and gas savings, $400 million in midstream savings, and $365 million in interest savings.

• 2026 domestic operating cost guidance: $8.10/BOE; transportation cost: $3.30/BOE; interest expense expected at $810 million.

• Dividend increased by 8%, with a focus on sustainable and growing shareholder returns.