Occidental Petroleum is targeting a $550 million reduction in capital spending this year, bringing total spending to between $5.5 billion and $5.9 billion. The company completed the $9.5 billion sale of its OxyChem business to Berkshire Hathaway in January, allowing it to prepay $6.7 billion in debt and eliminate $550 million in annual interest expenses. With crude prices up over 30% year to date, Occidental may face pressure to boost output, but analysts caution that geopolitical volatility and the risk of falling prices could punish any rush to lift production. Evercore ISI projects the company can grow free cash flow by 8% annually through 2030 with WTI at $75 per barrel and potentially restart share repurchases in two years, without materially increasing near-term output.
Occidental Petroleum CorporationOccidental cuts capex by $550M, reduces debt, and eliminates $550M annual interest, improving financials and free cash flow.
Berkshire Hathaway IncBerkshire Hathaway completed the $9.5B purchase of OxyChem, a strategic acquisition.
Evercore Partners Inc