Occidental Petroleum Eyes $6B Debt Goal Amid Strong Cash Flow

Occidental Petroleum is targeting a principal debt level of $6 billion, a significant reduction from its previous goal, driven by robust financial performance. In the third quarter of 2026, the company generated about $2.8 billion in free cash flow and repaid $1.8 billion in debt, bringing year-to-date repayments to $10.4 billion. This strong cash generation supports the new, more ambitious debt reduction target.

The company's strategy includes achieving over $4 billion in annual sustainable cash flow improvements by 2030. This will be supported by operating efficiencies, reduced production declines, and lower interest expenses. Occidental expects to make significant progress toward the $6 billion debt milestone in 2027, potentially reaching a net cash position within the same year.

Occidental Petroleum also intends to balance further debt reduction with cash accumulation to prepare for a preferred equity redemption in August 2029. Following the debt milestone, the company will assess opportunistic share repurchases. The dividend remains a core component of shareholder returns, with future increases planned to be measured and supported by financial health.

Production in the third quarter of 2026 averaged 1.43 million barrels of oil equivalent per day, with domestic operations exceeding guidance. Despite some operational constraints, the company anticipates fourth-quarter production between 1.43 and 1.47 million barrels of oil equivalent per day. Full-year capital spending is expected to remain within guidance, with 2027 spending projected around $5.9 billion.

Enhanced oil recovery projects are underway to reduce the overall production decline rate. Occidental is also advancing its carbon management initiatives, including its STRATOS direct air capture project, which is on track for full plant startup around year-end 2026 and operations in 2027, with expected EBITDA contributions in 2028.