Occidental Petroleum Corp. (OXY) Takeaways from Investor Meeting Closer Look at $4.0 Billion Cash Flow Improvement Plan, Wi...

Equity Research 14 August 2026 | 12:16PM EDT

Occidental Petroleum Corp. (OXY): Takeaways from Investor Meeting: Closer Look at $4.0 Billion Cash Flow Improvement Plan, With Focus on

On Thursday, August 13th, we hosted a virtual investor meeting with Occidental Neil Mehta | Petroleum (OXY, Neutral), with Mr. Richard Jackson, President and Chief Goldman Sachs & Co. LLC

Executive Officer, Mr. Sunil Mathew, Senior Vice President and Chief Financial Jack Cavanagh | Officer, and Mr. Babatunde Cole, Vice President, Investor Relations. Discussions Goldman Sachs & Co. LLC focused on the cadence of the recently announced $4.0 bn cash flow improvement plan, the path to the preferred equity redemption and sustained cost savings. We left Jerry Speicher | the meeting incrementally positive on management’s approach to organic Goldman Sachs & Co. LLC improvement, with a disciplined focus on debt reduction and capital/cost efficiency driving the targeted cash flow growth. Following several years of deleveraging and resource acquisition, we see a leadership team focused on reducing base decline, improving cost efficiency and setting targets it can execute against. Looking ahead, we continue to monitor for updates on the 2027 capital program, progress on base decline reduction and the path to a sustained buyback program. Please see within for further details.

Key Takeaways from the Discussion

Management walked through the drivers and cadence of the $4.0 bn cash flow improvement, where roughly half is expected to be realized by YE2027. The near-term contribution is driven by the roll-off of ~$450 mn of LCV capital beginning in 2027 and continued progress toward the $10 bn principal debt target. Management expects interest savings of ~$740 mn relative to 2025, with ~$400 mn realized in 2026 and ~$340 mn in 2027, reflecting the timing of debt repayments. The remaining ~$2.0 bn of cash flow improvement is expected beyond YE2027, with ~$700 mn related to the preferred equity redemption and ~$1.3 bn from continued oil and gas efficiencies and lower sustaining capital. Management is also targeting driving base decline rates from approximately 25% to 20%, supporting the sustaining capital reduction from $5.4 bn to $4.5 bn, driven by advanced recovery across EOR, the Gulf of America waterfloods and continued technology deployment across the subsurface. While investors questioned an increase to the 2027 capital program YoY, management noted peak waterflood spending occurs in 2027, implying lower Gulf of America capital moving forward.

The company continues to make progress on its debt reduction. OXY has lowered principal debt to $11.8 bn, down $8.6 bn YTD, bringing the go-forward annual interest run rate to ~$760 mn. We see the strong 2Q26 FCF generation of ~$3.0 bn,

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Goldman Sachs Occidental Petroleum Corp. (OXY)

the highest since 3Q22, as supportive of OXY’s continued commitment to repayments. Management reiterated their focus on building cash ahead of the August 2029 preferred equity redemption. Additionally, OXY’s 8% increase in the quarterly dividend to $0.28 per share was a result of the interest savings from accelerated debt reduction.

Cost efficiency has been a continued focus for OXY, with more than $2 bn of annualized savings delivered since 2023 and an additional ~$500 mn targeted in 2026. Drilling and operating efficiency remain the primary levers, with management pointing to ~7% improvement in well cost efficiency alongside LOE and transportation reductions. These gains are driving lower activity without loss of volumes, with management expecting a reduction of 3 rigs in the Permian in 4Q26 and 15 additional wells expected…