Occidental Petroleum Corporation (OXY): A Bull Case Theory

We came across a bullish thesis on Occidental Petroleum Corporation (OXY) on DinoInvestor’s YouTube channel. In this article, we will summarize the bulls’ thesis on OXY. Occidental Petroleum Corporation (OXY)’s share was trading at $43.31 as of January 13th. OXY’s trailing and forward P/E were 31.41 and 21.51 respectively according to Yahoo Finance.

Why These Energy Stocks are Losing This Week

Occidental Petroleum Corporation (OXY) together with its subsidiaries, engages in the acquisition, exploration, and development of oil and gas properties in the United States and internationally. It operates through three segments: Oil and Gas, Chemical, and Midstream and Marketing.

The company’s Q3 2025 update highlights a transformative period for the company, anchored by the $9.7 billion sale of its OxyCam division to Berkshire, expected to close by year-end. After taxes, approximately $8 billion will be realized, with $6.5 billion allocated to debt repayment and $1.5 billion added to cash on hand. This debt reduction lowers annual interest expenses by roughly $350–390 million and brings total debt below $15 billion, significantly strengthening the balance sheet.

Operationally, Oxy is preparing its Stratos direct air capture facility for CO2 injection in Q1 2026, targeting enhanced oil recovery. Early tests show a 45% production uplift in unconventional wells, with potential future injections boosting efficiency 60–100%, reducing the need for new drilling and lowering costs.

Financially, Q3 production averaged 1.46 million barrels of oil equivalent per day, generating around $1.5 billion in free cash flow before working capital adjustments. Post-OxyCam sale, net debt falls to roughly $14.3 billion, positioning the company to meet its long-term leverage targets. Guidance for Q4 anticipates production of 1.44–1.48 million BOE/day with capex near $1.7 billion, supported by commodity prices of WTI $64.93, Brent $68.14, and natural gas $3.28/MCF.

Looking ahead, Oxy plans to sustain operations, grow dividends, resume share repurchases, and retire remaining debt at maturity. With a strengthened balance sheet, enhanced production efficiency from CO2 injection, and strategic capital allocation, Oxy is well-positioned for sustainable growth and attractive shareholder returns.

Previously, we covered a bullish thesis on Occidental Petroleum Corporation (OXY) by Magnus Ofstad in May 2025, which highlighted the company’s low-cost Permian Basin operations, diversified business model, and leadership in carbon capture through its Stratos project. The company’s stock price has been flat since our coverage. This is because broader market concerns and operational execution challenges weighed on sentiment, but the thesis remains valid given OXY’s world-class assets and strategic potential. DinoInvestor shares a similar thesis but emphasizes the transformative impact of the $9.7 billion OxyCam sale, debt reduction, and upcoming CO2 injection tests at Stratos, highlighting near-term balance sheet strengthening and operational efficiency improvements.

Occidental Petroleum Corporation (OXY) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 62 hedge fund portfolios held OXY at the end of the third quarter which was 64 in the previous quarter. While we acknowledge the risk and potential of OXY as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than OXY and that has 10,000% upside potential, check out our report about this cheapest AI stock.

READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy NOW 

Disclosure: None.