How Has Occidental Petroleum's Story Changed? Trefis Team Mon, October 12, 2026 at 10:24 AM EDT 3 min read OXY +1.86% ^GSPC -0.04% CVX +1.12% XOM +1.57% COP +1.62% Explore stocks on Coinbase Trading disclosure Trading disclosure The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.
Investors are currently weighing a distinct valuation gap: Occidental Petroleum (OXY) stock is priced at 8.3 times earnings, well below the 21.9 multiple for the S&P 500. Anyone buying at that level is betting on a company that recently shifted its core priorities. In late 2024, executives led with CrownRock, a newly acquired business undergoing integration. They no longer lead with CrownRock. So what does management lead with today?
Occidental Now Leads With A Cash Flow Plan
During the fiscal Q2 2026 earnings call in August, management outlined a path to add over $4 billion of annual sustainable cash flow by 2030. Part of that depends on advanced recovery projects designed to extract more oil from fields Occidental already operates. Management called advanced recovery central to its plans.
This marks a clear departure from the company's messaging two years ago. On the fiscal Q3 2024 call, leadership emphasized the successful addition of CrownRock to its portfolio and "the ongoing integration of CrownRock" into its operations. One call later, the company reported an all-in reserves replacement ratio of 230% for 2024, tying that replacement to the long-term sustainability of the business.
Both of those earlier milestones centered on what Occidental was adding. The new plan focuses on getting more cash out of what Occidental already owns.
Occidental Expects To Spend Less And Pay Less Interest
Core operations still dictate the top line. Oil and gas brought in 97% of Occidental's revenue in fiscal 2025. That oil and gas revenue totaled $20.9 billion for the year, down 3.7% from 2024.
While management noted that higher commodity prices helped its latest quarter's free cash flow, the long-term strategy is not built on selling more oil. Instead, executives expect sustaining capital, the spending needed to hold production flat, to fall by $900 million. They also expect to pay less interest as debt comes down.
Does Occidental's New Plan Depend On Commodity Prices?
By management's account, the new strategy is largely insulated from market swings, which offers a reassuring detail for investors who own the stock. Executives said about 85% of the planned cash flow improvement should still be delivered even at lower prices.
The primary concern is that 2030 remains a long way off, making the plan a forecast rather than a result. For shareholders looking to measure progress, debt offers the most immediate test. Principal debt stood at $11.8 billion on the August call, with management setting an immediate priority to take it to $10 billion. Occidental has already lowered its annualized interest by approximately $630 million compared with its 2025 interest payments. That accounts for most of the roughly $740 million in annual interest savings the company expects once debt reaches $10 billion.
Seeing principal debt at or close to $10 billion on Occidental's next earnings call would show one part of its cash flow plan being delivered.
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