Key Highlights
- Occidental Petroleum stock climbed 16.9% last month thanks to stronger crude oil pricing and impressive Q4 performance
- WTI crude oil increased 2.8% in February, reaching $67/barrel; by early March it had jumped another 10% past $73
- Fourth quarter earnings per share reached $0.31, significantly exceeding analyst forecasts of $0.17
- The company boosted its quarterly dividend payment from $0.24 to $0.26 per share, offering a ~1.9% yield
- Regal Partners Ltd initiated a new $6.62M position in OXY; institutions control 88.7% of outstanding shares
Occidental Petroleum enjoyed a robust February with shares climbing nearly 17% as crude oil strengthened and fourth quarter results exceeded Wall Street expectations. The positive momentum has extended into March with an additional 4% gain.
Occidental Petroleum Corporation, OXY
West Texas Intermediate crude advanced 2.8% during February, finishing just above $67 per barrel—marking its strongest close since early August. Brent crude increased 2.5%, ending near $72.50 per barrel.
The rally was primarily driven by escalating U.S.-Iran tensions. These geopolitical concerns intensified in early March following U.S. and Israeli military actions against Iran, which retaliated by targeting oil tankers in the Persian Gulf.
Following these developments, WTI has surged an additional 10% in March, surpassing $73 per barrel. Brent has jumped nearly 15%, breaking above $83 per barrel.
As a significant oil producer, OXY stands to benefit substantially from rising crude prices. Higher oil values translate directly into increased revenue for every barrel extracted.
Fourth Quarter Performance Exceeded Expectations
Occidental delivered Q4 adjusted earnings per share of $0.31, substantially beating analyst consensus estimates of $0.17–$0.18. This impressive result came despite lower average oil prices throughout the quarter.
CEO Vicki Hollub attributed the success to operational excellence. The company’s production reached approximately 1.5 million barrels of oil equivalent daily during Q4, surpassing the upper end of internal projections. Particularly strong results from the Permian Basin and Rockies operations led the way.
Quarterly revenue totaled $5.11 billion, falling short of analyst projections of $6.02 billion. This represents a 5.2% year-over-year decline from the prior year period, when EPS was $0.80.
Looking ahead to 2025, Wall Street analysts are projecting full-year earnings per share of $3.58.
The company increased its quarterly dividend to $0.26 per share from the previous $0.24. This brings the annualized distribution to $1.04, representing approximately 1.9% yield. The dividend will be distributed April 15 to stockholders of record as of March 10.
Strategic Capital Allocation and Balance Sheet Focus
Management outlined plans to reduce capital expenditures to $5.5–$5.9 billion for the current year—representing a $550 million decrease from 2024 at the midpoint. According to Occidental, this improved efficiency combined with other initiatives should produce more than $1.2 billion in additional free cash flow assuming comparable oil prices to last year.
With crude trading significantly above those levels, actual free cash flow generation could exceed projections.
The company has been proactively addressing its debt profile through cash tender offers and consent solicitations targeting several senior note series. Management expanded the aggregate purchase limit as part of these transactions.
Director William R. Klesse purchased 5,000 additional OXY shares on December 16 at $38.98 each, a $194,900 investment that increased his total position to 218,913 shares.
Regal Partners Ltd established a fresh position comprising 140,000 shares worth approximately $6.62 million, representing OXY as its 29th largest holding at 0.5% of portfolio value.
UBS lifted its OXY price objective to $55 while Piper Sandler increased its target to $54, though both firms maintained neutral ratings. The consensus Wall Street rating remains Hold, with an average price target of $51.24.
OXY began trading Friday at $54.28, approaching its 52-week high of $56.34.
