Occidental Petroleum posted a net loss of $68 million, or $0.07 per diluted share, for the fourth quarter of 2025, compared with adjusted earnings of $315 million, or $0.31 per share. The gap between GAAP and adjusted results was primarily due to charges tied to the divestment of its chemical unit, OxyChem, which officially closed on January 2, 2026.
The headline loss did little to obscure what management characterized as a quarter of operational outperformance and balance sheet repair. Proceeds from the OxyChem sale enabled Occidental to reduce debt by $5.8 billion since mid-December, bringing total principal debt down to $15.0 billion – a key milestone in its post-Anadarko deleveraging strategy.
In a further signal of financial stabilization, the company raised its quarterly dividend by more than 8% to $0.26 per share, payable April 15. The increase marks a doubling of the dividend over the past four years, underscoring management’s pivot back toward shareholder returns after years focused on debt reduction.
Operationally, Occidental exceeded the high end of its production guidance. Fourth-quarter output averaged 1.481 million barrels of oil equivalent per day (Mboed), 21 Mboed above the midpoint of guidance, driven primarily by strength in the Permian Basin and Rockies. Gulf of America and international volumes met expectations.
Still, earnings were pressured by weaker commodity prices. Average WTI and Brent prices during the quarter were $59.14 and $63.09 per barrel, respectively. Realized crude prices fell 9% quarter over quarter to $59.22 per barrel, while domestic gas prices dropped 24% to $1.12 per Mcf. The weaker pricing environment pushed oil and gas pre-tax income down to $700 million from $1.3 billion in the third quarter.
Midstream and marketing provided a bright spot. The segment delivered $204 million in pre-tax income, up sharply from $81 million in the prior quarter and above the high end of guidance. Gains were driven by improved gas transportation margins in the Permian, lower crude transport costs, and stronger sulfur pricing at Al Hosn. These gains were partially offset by lower equity income from Western Midstream Partners.
Cash flow metrics remained resilient despite softer pricing. Occidental generated $2.6 billion in operating cash flow and $2.7 billion before working capital adjustments. Capital spending totaled $1.8 billion, resulting in quarterly free cash flow before working capital of $1.0 billion.
On the reserves front, Occidental ended 2025 with 4.6 billion barrels of oil equivalent in proved reserves. The company reported an all-in reserves replacement ratio of 98% and an organic ratio of 107%, reflecting continued resource additions in the Permian and DJ basins. Over a three-year period, the all-in replacement ratio averaged a robust 154%.
