TLDR
- Occidental Petroleum stock climbed 16.9% last month on the back of higher crude prices and exceptional Q4 results
- WTI crude oil increased 2.8% in February reaching $67/barrel, then jumped an additional 10% in early March to exceed $73
- Fourth quarter earnings per share hit $0.31, almost twice the Street’s consensus forecast of $0.17
- The company boosted its quarterly dividend payout from $0.24 to $0.26 per share, offering approximately 1.9% yield
- Regal Partners Ltd established a fresh position worth $6.62M in OXY; institutional ownership stands at 88.7%
Occidental Petroleum experienced a remarkable rally of nearly 17% last month as crude oil markets strengthened and the energy producer delivered impressive fourth-quarter financial results. The momentum has carried into the current month, with shares gaining an additional 4% during early March trading.
Occidental Petroleum Corporation, OXY
West Texas Intermediate crude advanced 2.8% throughout February, finishing just above $67 per barrel — marking the highest closing level since early August. Brent crude posted a 2.5% gain, ending the month near $72.50 per barrel.
The oil market rally stemmed primarily from mounting geopolitical tensions involving the United States and Iran. These tensions intensified during early March when coordinated U.S. and Israeli military actions targeted Iran, prompting retaliatory strikes against oil tankers operating in the Persian Gulf.
Following these events, WTI has rallied an additional 10% in March, surpassing $73 per barrel. Brent crude has posted even stronger gains of nearly 15%, breaking above $83 per barrel.
As a significant oil production company, OXY directly profits from rising crude prices. Elevated oil values translate to increased revenue for each barrel the company extracts.
Exceptional Fourth Quarter Performance
Occidental delivered adjusted earnings per share of $0.31 for the fourth quarter, substantially exceeding the analyst consensus range of $0.17–$0.18. This impressive performance occurred despite crude prices averaging lower levels throughout the quarter.
Chief Executive Vicki Hollub attributed the results to rigorous operational execution. The company’s production reached approximately 1.5 million barrels of oil equivalent daily during the quarter, surpassing the upper bound of management’s guidance. Particularly strong showings from operations in the Permian Basin and Rocky Mountain regions powered the better-than-expected output.
Quarterly revenue totaled $5.11 billion, falling short of the Street’s $6.02 billion estimate. This represents a 5.2% year-over-year decline from the comparable quarter, when earnings per share registered $0.80.
Looking ahead to 2025, Wall Street analysts are currently projecting annual earnings per share of $3.58.
The company also announced a dividend increase to $0.26 per share quarterly, up from the previous $0.24. This brings the annualized distribution to $1.04, translating to an approximate 1.9% yield. The dividend payment is scheduled for April 15 to investors of record as of March 10.
Fiscal Discipline and Balance Sheet Strategy
Management outlined intentions to reduce capital expenditures to a range of $5.5–$5.9 billion for the current year — representing a $550 million decrease from 2024 levels at the midpoint. According to the company, this improved efficiency coupled with other initiatives should produce more than $1.2 billion in additional free cash flow assuming equivalent average oil prices to last year.
Given that current crude prices are running significantly above that reference point, actual free cash flow generation could prove substantially higher.
The company has also been proactively addressing its debt obligations, initiating cash tender offers and consent solicitations for multiple series of senior notes. Management increased the aggregate purchase limit as part of this refinancing initiative.
Board member William R. Klesse purchased 5,000 additional OXY shares on December 16 at a price of $38.98 each, representing a $194,900 investment that brought his total ownership to 218,913 shares.
Regal Partners Ltd revealed a newly established position of 140,000 shares valued at approximately $6.62 million, positioning OXY as the firm’s 29th largest holding representing 0.5% of total portfolio assets.
UBS Group lifted its price objective on OXY to $55 while Piper Sandler adjusted their target to $54, though both firms maintained neutral stance ratings. The consensus analyst recommendation remains at Hold, with an average price target of $51.24.
OXY shares opened Friday’s trading session at $54.28, approaching the 52-week peak of $56.34.
