Aug 6, 2026 earnings call — Sustainable cash flow and cost-efficiency plan
Occidental plans to add over $4 billion of annual sustainable cash flow by 2030, an approximate 95% annualized growth compared to 2025.
Revenue $8.1B (est $7.1B) · EPS $2.40 (est $1.83)
Key quotes
"Looking ahead, we see a clear pathway to add over $4 billion of annual sustainable cash flow by 2030."
"As previously shared, our immediate cash flow priority remains to reduce principal debt to $10 billion."
"This base decline improvement is driven by our advanced recovery projects, which are expected to support a decline rate reduction from approximately 25% to 20% by 2030."
Analyst Q&A 6
Timing and oil and gas savings
Q (Nitin Kumar · Mizuho): Analyst asked how quickly the company can reach the cash flow goals and for more detail on oil and gas efficiencies.
A: They said they are on track to achieve greater than $1.2 billion of cash flow improvement in 2026 versus 2025. They highlighted drivers for 2027 include a Stratos capital roll-off of around $200 million, interest savings tied to getting principal debt down to $10 billion, and continuing oil and gas operating efficiencies. They expect about $700 million to $800 million of improvement in 2027 relative to 2026 and said between 2026 and 2027 it's about $2 billion, roughly half of the $4 billion target; the remaining reductions, including a $700 million preferred redemption in August 2029, are expected in later years.
"Thanks, Richard. Nitin, so in terms of timing, as Richard said, we are currently on track to achieve the greater than $1.2 billion of cash flow improvement in 2026 relative to 2025, which we had outlined earlier this year." — Sunil Mathew (CFO)
Buybacks vs preferred and sustaining capex
Q (Douglas George Blyth Leggate · Wolfe): Analyst asked whether buybacks will be lower priority while preparing to redeem the preferred, and how sustaining capital can fall as planned.
A: Management confirmed buybacks are a lower priority until the preferred redemption in August 2029, and they will balance additional principal debt reduction and building cash based on macro conditions. They said principal debt is about $11.8 billion and they are on track to the $10 billion milestone; share repurchases will be opportunistic and any large continuous repurchase program is lower priority until the preferred is redeemed. On sustaining capital, they pointed to waterfloods and CO2 EOR projects, noting waterfloods can cut declines and add recovery, with specific projects (Mountain, Marlin King, Oman) timed into 2027–2028 to reduce decline and support lower sustaining capital.
"Our principal debt is currently at around $11.8 billion, which is the lowest we've had since second quarter of 2019, and we are well on track to achieve the $10 billion principal debt milestone." — Sunil Mathew (CFO)
Sustainable cost cuts and carbon tech
Q (Neil Mehta · Goldman Sachs): Analyst asked how the company will take sustainable costs out of the business and then asked how LCV (carbon capture tech) fits into the multiyear plan.
A: They said cost reductions come from continuing drilling efficiency gains, expanded simulfrac, and scaling global cost and efficiency programs beyond the U.S. Permian. They noted a concrete efficiency: the plan is to drop three rigs in Q4 while bringing 15 more wells online in the Permian, and full-year production guidance is 7,000 barrels higher after adjustments—an example of doing more with less. On LCV and carbon capture, management said carbon capture and DAC can add value, CO2 and power are key to EOR economics, projects are at meaningful milestones, and they plan to bring partners to scale those technologies.
"So a data point around that based on the efficiencies we have seen so far in Permian, the plan is to drop three rigs in Q4." — Sunil Mathew (CFO)
CapEx outlook and Rockies (Powder River)
Q (Wei Jiang · Barclays): Analyst asked about how much growth capital they would spend above sustaining CapEx and pacing between short- and long-cycle projects. The follow-up asked about the Rockies asset cadence.
A: They said 2027 starts at $5.9 billion CapEx and defined sustaining capital as excluding multiyear projects, exploration, and growth. Backing out exploration and the Gulf of America waterflood, sustaining capital next year is around $5 billion to $5.1 billion, and mid-cycle investments are intended to lower base decline and drive sustaining capital down to $4.5 billion by 2030 through lower decline and a well cost efficiency target of 12% by 2030 (7% this year). On the Rockies (Powder River), they said Powder River is becoming more important, showing better well productivity (about 41% above industry on a 6-month oil basis) and well cost down about 10%, with activity shifting into Powder River and higher-margin oilier production.
"So for next year, if you back out exploration, we back out the waterflood project in Gulf of America, we're going to see the peak spending related to the Horn Mountain project next year." — Sunil Mathew (CFO)
Advanced recovery in shale and midstream views
Q (Arun Jayaram · JPMorgan): Analyst asked how advanced recovery techniques are applied in unconventional (shale) and how that affects decline, and also asked Sunil about midstream and marketing expectations for the second half including sulfur, Waha gas optimization, and crude marketing.
A: They said pilots in the Permian over 10 years show consistent more than 45% uplift in EUR, raising recovery from about 10% to roughly 15% and potentially to 20% with continued CO2 cycling; approaches are customized by basin and combine surfactants and CO2, with three commercial projects coming online later in 2028–2029 to start reducing decline. On midstream and marketing, they said the main Q3 change is on gas marketing as the Waha-to-Gulf Coast spread has narrowed with new takeaway capacity; the narrower spread should be largely offset by better domestic upstream realized Permian gas prices, and they noted Q2 realized gas was negative $1.50 (about a $2.50 swing versus Q1). They also noted higher spot sulfur prices and freight volatility could impact Q3 realization and sales and said they incorporated these factors into Q3 guidance.
"We've seen consistent more than 45% uplift in terms of EUR." — Richard Jackson (CEO)
Midstream positioning and Permian development
Q (Sam Margolin · Wells Fargo): Analyst asked whether the midstream business could be rebased given local in-basin demand and how the Permian development model change still maintained well productivity.
A: They said midstream is well positioned and its primary purpose is to ensure delivery of product; they will participate in market opportunities but stay focused on delivering value and capital allocation priorities. On Permian development, they said well productivity remains strong, they derisk secondary benches, and development efficiency and lower capital intensity (under the $20 per thousand BOE replacement metric in U.S. onshore) support that approach. They added that repeatable well performance lets them expand secondary bench activity; in the Delaware their secondary bench is about 40% higher than industry average and six-month oil is about 21% higher than the benchmark.
"I think the main purpose for midstream for us is to ensure delivery of our product." — Richard Jackson (CEO)