- Cash Flow Resilience: Generated $2.6 billion in operating cash flow despite lower oil prices, driven by production gains from CrownRock and legacy Oxy.
- Debt Reduction: Repaid $7.5 billion in debt, cutting leverage by 70% in under a year, reducing annual interest expenses by $410 million.
- Production Efficiency: Achieved 1.4 million BOE/day production, exceeding guidance, with Permian teams reducing capital guidance by $100 million via cost efficiencies.
- Midstream Performance: Midstream & Marketing segment outperformed guidance, with full-year earnings guidance raised by $85 million due to improved margins.
- Carbon Capture Momentum: Signed two CO₂ removal deals and advanced DAC joint venture with XRG, leveraging $700–800 million in tax savings from the One Big Beautiful Bill.
Financial Performance
The company reported an adjusted profit of $0.39 per diluted share and a reported profit of $0.26 per diluted share, beating analysts' estimates of $0.2973. The strong operational and financial performance can be attributed to higher volumes across the U.S. onshore and international portfolio. The company is guiding to an adjusted effective tax rate of approximately 32% for Q3.
Segment Performance
The Midstream and Marketing Segment generated positive earnings, outperforming guidance, driven by improved crude marketing margins, gas marketing optimization, and higher sulfur pricing. The company's international operations implemented similar efficiencies, reducing OpEx by an estimated $50 million. The Permian teams drove down well costs through enhanced efficiencies, enabling the company to reduce capital guidance by $100 million.
Valuation
With a P/E Ratio of 14.19, the company's valuation seems reasonable given its strong operational performance and debt reduction efforts. The company's P/B Ratio of 1.16 and P/S Ratio of 1.61 also suggest that the stock is not overly expensive. The dividend yield of 2.08% and free cash flow yield of 11.0% provide a relatively attractive return for investors.
Outlook
The company is guiding to an increased total company production range of 1.42 million to 1.46 million BOE per day in Q3, with Midstream & Marketing segment performance expected to be strong. However, the company expects a more muted Q3 performance, assuming the Waha to Gulf Coast natural gas spread continues to narrow. The company's OxyChem pre-tax income came in below guidance due to weaker-than-anticipated pricing for caustic and PVC, leading to a lowering of OxyChem's full-year guidance range to $800 million to $900 million.