Occidental Petroleum (OXY) Q2 2026 Earnings Call: Q&A Summary

Q: Nitin Kumar from Mizuho asked about the timing of the cash flow inflection and the definition of efficiency-led growth.

A: Sunil Mathew explained that the company expects a $1.2 billion improvement in 2026 and an additional $700 million to $800 million in 2027. Richard Jackson noted that efficiency-led growth focuses on returns and capital efficiency, while Sunil added that a moderate growth scenario with a 2% production CAGR would improve free cash flow by 2030.

Q: Doug Leggate from Wolfe Research asked if share repurchases are secondary to preferred equity redemption and how the company plans to reduce sustaining capital.

A: Sunil Mathew confirmed that preferred redemption is a priority and share repurchases are lower priority until 2029. Ken Dillon and Richard Jackson explained that sustaining capital will decrease through waterflooding projects, base performance improvements, and CO2 enhanced oil recovery.

Q: Neil Mehta from Goldman Sachs asked about sustainable cost savings beyond interest expenses and the role of Low Carbon Ventures.

A: Richard Jackson highlighted drilling efficiency and global cost management, while Sunil Mathew noted they are dropping three rigs in the fourth quarter while increasing well counts. Richard added that Low Carbon Ventures focuses on CO2 and power to support the core business and they are seeking partners to advance these technologies.

Q: Betty Jiang from Barclays asked about the quantum of growth capital and the cadence of the Rockies asset.

A: Sunil Mathew stated that 2027 capital spending starts at $5.9 billion, with sustaining capital expected to reach $4.5 billion by 2030. Babatunde Cole noted that the Powder River Basin is becoming more important to the oil growth story, with well productivity 41% above the industry average.

Q: Arun Jayaram from JPMorgan asked about advanced recovery techniques in unconventional reservoirs and the outlook for midstream and marketing.

A: Richard Jackson stated that CO2 enhanced oil recovery in unconventional reservoirs has shown a 45% uplift in EUR. Sunil Mathew explained that while the Waha to Gulf Coast gas spread is narrowing, the impact on midstream income is offset by upstream gas realizations, and they are monitoring Middle East sulfur price volatility.

Q: Sam Margolin from Wells Fargo asked about rebasing the midstream business and how the company maintains productivity while changing development models in the Permian.

A: Richard Jackson said the midstream business is primarily to ensure product delivery, and they will remain centered on that. Babatunde Cole added that Delaware secondary bench development is 40% higher than the industry average, which supports their productivity goals.