Occidental Petroleum’s total production of 1,400 mboe/d surpassed expectations and matched guidance. However, per-unit cash operating costs and capital expenditure also increased. Despite improved drilling efficiencies in the Permian, Oxy projected higher operating expenses for the third quarter. The company lowered its 2025 capital expenditure guidance by $100 million and reduced international operating expenses by $50 million.

The fair value estimate for Occidental Petroleum was slightly reduced to $58 per share from $59, with the stock trading at a 23% discount to underlying value. While Oxy is the cheapest US shale producer, Devon is preferred due to a lower Uncertainty Rating and better cost position. Oxy has reported year-to-date free cash flow of $1.85 billion, but working capital has been a $535 million cash headwind. Debt reduction has exceeded dividends by $1.5 billion in 2025, with a focus on repaying debt over shareholder returns.

Read more at Morningstar: Results Were as Expected; Capital Moves Favor Bondholders