Occidental Petroleum Corp: Form 10-Q for the period ended Sep 30, 2025
Filed with the SEC on Nov 10, 2025 and accepted by EDGAR at Nov 10, 2025, 21:23 ET.
Management's discussion and analysis
As filed, 37,600 characters, with its headings, lists and tables. Extracted from the main document; charts and exhibits are in the original on sec.gov.
The following discussion should be read together with the Consolidated Condensed Financial Statements and the notes to the Consolidated Condensed Financial Statements, which are included in this report in Part I, Item 1; the information set forth in Risk Factors under Part II, Item 1A; the Consolidated Financial Statements and the notes to the Consolidated Financial Statements, which are included in Part II, Item 8 of Occidental's 2024 Form 10-K; and the information set forth in Risk Factors under Part I, Item 1A of the 2024 Form 10-K.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Portions of this report contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including, but not limited to: any projections of earnings, revenue or other financial items or future financial position or sources of financing; any statements of the plans, strategies and objectives of management for future operations or business strategy; any statements regarding future economic conditions or performance; any statements of belief; and any statements of assumptions underlying any of the foregoing. Words such as “estimate,” “project,” “predict,” “will,” “would,” “should,” “could,” “may,” “might,” “anticipate,” “plan,” “intend,” “believe,” “expect,” “aim,” “goal,” “target,” “objective,” "commit," "advance," “likely” or similar expressions that convey the prospective nature of events or outcomes are generally indicative of forward-looking statements. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this report unless an earlier date is specified. Unless legally required, Occidental does not undertake any obligation to update, modify or withdraw any forward-looking statements as a result of new information, future events or otherwise.
Actual outcomes or results may differ from anticipated results, sometimes materially. Forward-looking and other statements regarding Occidental's sustainability efforts and aspirations are not an indication that these statements are necessarily material to investors or require disclosure in Occidental's filings with the SEC. In addition, historical, current and forward-looking sustainability-related statements may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve and definitions, assumptions, data sources and estimates or measurements that are subject to change in the future, including through rulemaking or guidance. Factors that could cause results to differ from those projected or assumed in any forward-looking statement include, but are not limited to: Occidental’s ability to consummate the OxyChem Transaction; the possibility that any or all of the conditions to the OxyChem Transaction may not be satisfied or waived, including the failure to obtain the regulatory approvals required for the OxyChem Transaction on the terms expected or on the anticipated schedule or at all; the occurrence of any event, change or other circumstance that could give rise to the termination of the Purchase Agreement; the effect of the pendency of the OxyChem Transaction on our operating results and business generally; that the OxyChem Transaction may not achieve some or all or any of the anticipated benefits, including using a majority of the after-tax sales proceeds for accelerated deleveraging, or be completed in accordance with expected plans and timelines; general economic conditions, including slowdowns and recessions, domestically or internationally; Occidental’s indebtedness and other payment obligations, including the need to generate sufficient cash flows to fund operations; Occidental’s ability to successfully monetize select assets and repay or refinance debt and the impact of changes in Occidental’s credit ratings or future increases in interest rates; assumptions about energy markets; global and local commodity and commodity-futures pricing fluctuations and volatility, exposure to which may be heightened following the completion of the OxyChem Transaction; supply and demand considerations for, and the prices of, Occidental’s products and services; actions by OPEC and non-OPEC oil producing countries; results from operations and competitive conditions; future impairments of Occidental's proved and unproved oil and gas properties or equity investments, or write-downs of productive assets, causing charges to earnings; unexpected changes in costs; government actions (including the effects of announced or future tariff increases and other geopolitical, trade, tariff, fiscal and regulatory uncertainties), war (including the Russia-Ukraine war and conflicts in the Middle East) and political conditions and events; inflation, its impact on markets and economic activity and related monetary policy actions by governments in response to inflation; availability of capital resources, levels of capital expenditures and contractual obligations; the regulatory approval environment, including Occidental's ability to timely obtain or maintain permits or other government approvals, including those necessary for drilling and/or development projects; Occidental's ability to successfully complete, or any material delay of, field developments, expansion projects, capital expenditures, efficiency projects, acquisitions or divestitures; risks associated with acquisitions, mergers and joint ventures, such as difficulties integrating businesses, uncertainty associated with financial projections or projected synergies, restructuring, increased costs and adverse tax consequences; uncertainties and liabilities associated with acquired and divested properties and businesses; uncertainties about the estimated quantities of oil, NGL and natural gas reserves; lower-than-expected production from development projects or acquisitions; Occidental’s ability to realize the anticipated benefits from prior or future streamlining actions to reduce fixed costs, simplify or improve processes and improve Occidental’s competitiveness; exploration, drilling and other operational risks; disruptions to, capacity constraints in, or other limitations on the pipeline systems that deliver Occidental’s oil and natural gas and other processing and transportation considerations; volatility in the securities, capital or credit markets, including capital market disruptions and instability of financial institutions; health, safety and environmental (HSE) risks, costs and liability under existing or future federal, regional, state, provincial, tribal, local and international HSE laws, regulations and litigation (including related to climate change or remedial actions or assessments); legislative or regulatory changes, including changes relating to hydraulic fracturing or other oil and natural gas operations, retroactive royalty or production tax regimes and deep-water and onshore drilling and permitting regulations; Occidental's ability to recognize intended benefits from its business strategies and initiatives, such as Occidental's low-carbon ventures businesses or announced greenhouse gas emissions reduction targets or net-zero goals; changes in government grant or loan programs; potential liability resulting from pending or future litigation, government investigations and other proceedings; disruption or interruption of production or manufacturing or facility damage due to accidents, chemical releases, labor unrest, weather, power outages, natural disasters, cyber-attacks, terrorist acts or insurgent activity; the scope and duration of global or regional health pandemics or epidemics, and actions taken by government authorities and other third parties in connection therewith; the creditworthiness and performance of Occidental's counterparties, including financial institutions, operating partners and other parties; failure of risk management; Occidental’s ability to retain and hire key personnel; supply, transportation and labor constraints; reorganization or restructuring of Occidental’s operations; changes in state, federal or international tax rates, deductions, incentives or credits; and actions by third parties that are beyond Occidental's control.
Additional information concerning these and other factors that may cause Occidental’s results of operations and financial position to differ from expectations can be found in Occidental’s other filings with the SEC, including Occidental’s 2024 Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.
CURRENT BUSINESS OUTLOOK
Occidental’s financial condition, cash flows and levels of expenditures are highly dependent on oil prices and, to a lesser extent, NGL and natural gas prices, the Midland-to-Gulf-Coast oil spreads, chemical product prices and inflationary pressures in the macro-economic environment. The average WTI price per barrel for the three months ended September 30, 2025 was $64.93, compared to $63.74 for the three months ended June 30, 2025 and $75.09 for the three months ended September 30, 2024.
Changes in oil prices could result in adjustments to capital investment levels and allocation, which impact production volumes. Oil prices may remain volatile due to geopolitical risks, the evolving macro-economic environment's impact on energy demand, future actions by OPEC and other oil producing countries, and recent sanction and tariff actions.
In April 2025, President Trump announced a sweeping tariff policy that imposes a 10% baseline tariff on the majority of imports, with significantly higher reciprocal rates for certain nations. The United States has since engaged with many countries on trade agreements. Since the announcement, many tariff rates have been paused, modified, or subsequently reinstated, and are the subject of ongoing litigation. While the ultimate outcome of the tariff policy is uncertain, the implementation of these tariffs could have several implications for Occidental's business operations and financial performance as tariffs may be levied on the Company's suppliers which in turn may increase costs and could have a macroeconomic impact on demand and prices at which our products can be sold.
STRATEGIC PRIORITIES
Occidental is focused on delivering a unique shareholder value proposition with its portfolio of oil and gas assets as well as its ongoing development of carbon management and sequestration solutions and GHG emissions reduction efforts. Occidental conducts its operations with a priority on technical expertise, HSE, sustainability and social responsibility. In order to maximize shareholder returns, Occidental will:
- Maintain production base to preserve asset base integrity and longevity;
- Deliver a sustainable and growing dividend;
- Prioritize excess cash flow and proceeds from divestitures, including the announced OxyChem Transaction, for deleveraging to reduce principal debt to below $15 billion;
- Enhance its asset base with investments in its cash-generative oil and gas business; and
- Advance integrated technologies in CO2, power and midstream to enable differentiated resource recovery and value.
OXYCHEM TRANSACTION
In October 2025, the Company entered into the Purchase Agreement, whereby Berkshire Hathaway will acquire OxyChem for $9.7 billion in an all-cash transaction. Occidental intends to utilize the majority of the after-tax sale proceeds to continue its deleveraging efforts. See Note 5 - Acquisitions and Divestitures in the Notes to Consolidated Condensed Financial Statements in Part I, Item 1 of this Form 10-Q and Part II, Item 1A Risk Factors below for additional information regarding the sale of OxyChem.
DEBT
As of September 30, 2025, Occidental’s debt was rated Baa3 by Moody’s Investors Service, BBB- by Fitch Ratings and BB+ by Standard and Poor’s. Any downgrade in credit ratings could impact Occidental's ability to access capital markets and increase its cost of capital. In addition, Occidental or its subsidiaries may be requested, elect to provide or in some cases be required to provide collateral in the form of cash, letters of credit, surety bonds or other acceptable support as financial assurance of their performance and payment obligations under certain contractual arrangements, such as pipeline transportation contracts, oil and gas purchase contracts and certain derivative instruments; certain permits, including with respect to carbon capture, utilization and sequestration activities; and environmental remediation matters.
In the nine months ended September 30, 2025, Occidental used cash on hand and proceeds from asset sales and warrant exercises to repay all of the $1.0 billion senior notes due 2025, $1.2 billion of senior notes due 2026, and $1.4 billion of the two-year term loan due 2026. For information on Occidental's debt activity, see Note 4 - Long-Term Debt in the Notes to Consolidated Condensed Financial Statements in Part I, Item 1 of this Form 10-Q for additional information.
As of September 30, 2025, approximately 94% of Occidental's outstanding debt was fixed rate.
WARRANT EXERCISE
On March 3, 2025, Occidental announced an offer to exercise its outstanding publicly traded warrants at a temporarily reduced price of $21.30 per share with an expiration date of March 31, 2025. In April 2025, Occidental issued 41.9 million shares of common stock in return for proceeds of approximately $890 million. The proceeds from the warrant exercise were used to repay near-term debt maturities. See Note 4 - Long-Term Debt in the Notes to Consolidated Condensed Financial Statements in Part I, Item 1 of this Form 10-Q.
CONSOLIDATED RESULTS OF OPERATIONS AND ITEMS AFFECTING COMPARABILITY
The following table sets forth earnings of each operating segment and corporate items:
| millions Net income | Three months ended September 30, 2025 | % Change | Three months ended June 30, 2025 |
|---|---|---|---|
| Oil and gas (a) | $1,300 | 39% | $934 |
| Chemical (a) | 197 | (8)% | 213 |
| Midstream and marketing (a) | 93 | 90% | 49 |
| Total | 1,590 | 33% | 1,196 |
| Unallocated Corporate Items (a) | |||
| Interest expense, net | (270) | (2)% | (276) |
| Income tax expense | (324) | 20% | (270) |
| Corporate and other items, net | (154) | (15)% | (182) |
| Net income | $842 | 80% | $468 |
| Less: Net income attributable to noncontrolling interest | (12) | 20% | (10) |
| Less: Preferred stock dividends | (169) | (1)% | (170) |
| Net income attributable to common stockholders | $661 | 130% | $288 |
| Net income per share attributable to common stockholders - diluted | $0.65 | 150% | $0.26 |
(a) Refer to the Items Affecting Comparability table which sets forth items affecting Occidental's earnings that vary widely and unpredictably in nature, timing and amount.
| millions Net income | Nine months ended September 30, 2025 | % Change | Nine months ended September 30, 2024 |
|---|---|---|---|
| Oil and gas (a) | $3,931 | (3)% | $4,042 |
| Chemical (a) | 595 | (30)% | 854 |
| Midstream and marketing (a) | 65 | (91)% | 714 |
| Total | 4,591 | (18)% | 5,610 |
| Unallocated Corporate Items (a) | |||
| Interest expense, net | (864) | 2% | (848) |
| Income tax expense | (981) | (20)% | (1,223) |
| Corporate and other items, net | (491) | (6)% | (523) |
| Income from continuing operations | $2,255 | (25)% | $3,016 |
| Discontinued operations, net of taxes | — | (100)% | 182 |
| Net income | $2,255 | (29)% | $3,198 |
| Less: Net income attributable to noncontrolling interest | (31) | 107% | (15) |
| Less: Preferred stock dividends | (509) | —% | (509) |
| Net income attributable to common stockholders | $1,715 | (36)% | $2,674 |
| Net income per share attributable to common stockholders - diluted | $1.68 | (39)% | $2.77 |
(a) Refer to the Items Affecting Comparability table which sets forth items affecting Occidental's earnings that vary widely and unpredictably in nature, timing and amount.
ITEMS AFFECTING COMPARABILITY
The following table sets forth items affecting the comparability of Occidental's earnings that vary widely and unpredictably in nature, timing and amount:
| millions Oil and gas | Three months ended September 30, 2025 | June 30, 2025 | Nine months ended September 30, 2025 | September 30, 2024 |
|---|---|---|---|---|
| Losses on sales of assets and other, net | $(22) | $— | $(22) | $(572) |
| Legal reserves and other | — | (65) | (65) | (54) |
| Total oil and gas | (22) | (65) | (87) | (626) |
| Chemical | ||||
| Legal reserves and other | — | — | (30) | (6) |
| Total chemical | — | — | (30) | (6) |
| Midstream and marketing | ||||
| Asset impairments and other charges (a) | — | (162) | (162) | (21) |
| Derivative gains (losses), net (a) | (31) | 95 | (20) | 56 |
| Gains on sales of assets and other, net (a) | — | — | — | 647 |
| Equity method investments fair value gain | 61 | — | 61 | 27 |
| Total midstream and marketing | 30 | (67) | (121) | 709 |
| Corporate | ||||
| Acquisition-related costs and others (b) | (1) | (6) | (13) | (141) |
| Total corporate | (1) | (6) | (13) | (141) |
| Income tax impact on items affecting comparability | 5 | 30 | 61 | 2 |
| Income tax impact on Algeria contract renewal | — | — | — | (20) |
| Gain (loss) | 12 | (108) | (190) | (82) |
| Discontinued operations, net of taxes | — | — | — | 182 |
| Total | $12 | $(108) | $(190) | $100 |
(a) Included amounts from income from equity investments and other in the Consolidated Condensed Statement of Operations.
(b) The nine months ended September 30, 2024 included $66 million of financing costs related to the CrownRock Acquisition. The remaining amounts for each period are related to CrownRock transaction costs.
Q3 2025 compared to Q2 2025
Excluding the impact of items affecting comparability, net income for the three months ended September 30, 2025, compared to the three months ended June 30, 2025, increased due to higher crude oil sales volumes worldwide and higher domestic oil prices in the oil and gas segment, partially offset by lower Waha-to-Gulf-Coast gas spreads in the midstream and marketing segment.
Excluding the impact of items affecting comparability, net income for the nine months ended September 30, 2025, compared to the same period in 2024, decreased primarily due to lower crude oil prices in the oil and gas segment and higher ethylene and energy costs in the chemical segment, partially offset by higher sales volumes in the oil and gas segment due to a full nine months of production from CrownRock assets in 2025 and higher Waha-to-Gulf-Coast gas spreads in the midstream and marketing segment.
SELECTED STATEMENTS OF OPERATIONS ITEMS
Q3 2025 compared to Q2 2025
Net sales of $6.6 billion increased for the three months ended September 30, 2025, compared to $6.4 billion for the three months ended June 30, 2025, primarily due to higher domestic oil prices and higher sales volumes in the oil and gas segment, partially offset by lower Waha-to-Gulf-Coast gas spreads in the midstream and marketing segment.
Depreciation, depletion and amortization of $5.9 billion increased for the nine months ended September 30, 2025, compared to $5.4 billion for the same period in 2024, primarily due to a full nine months of production from the CrownRock assets.
Income from equity investments and other of $333 million decreased for the nine months ended September 30, 2025, compared to $709 million for the same period in 2024, primarily due to Occidental's share of losses recognized by its investee, Net Power.
SEGMENT RESULTS OF OPERATIONS
SEGMENT RESULTS OF OPERATIONS
Occidental’s principal businesses consist of three reporting segments: oil and gas, chemical and midstream and marketing. The oil and gas segment explores for, develops and produces oil and condensate, NGL and natural gas. The chemical segment is operated by our subsidiary OxyChem, which mainly manufactures and markets basic chemicals and vinyls. The midstream and marketing segment purchases, markets, gathers, processes, transports and stores oil (which includes condensate), NGL, natural gas, CO2 and power. It also optimizes its transportation and storage capacity and invests in entities that conduct similar activities such as WES.
The midstream and marketing segment also includes Occidental's low-carbon ventures businesses. Occidental's low-carbon ventures businesses seek to leverage Occidental’s legacy of carbon management experience to develop carbon capture, utilization and sequestration projects, including the commercialization of direct air capture technology, invest in other low-carbon technologies intended to reduce greenhouse gas emissions from Occidental's operations and strategically partner with other industries to help reduce their emissions.
OIL AND GAS SEGMENT
The following table sets forth the average sales volumes per day for oil and NGL in Mbbl and for natural gas in MMcf:
| Sales Volumes per Day Oil (Mbbl) | Three months ended September 30, 2025 | June 30, 2025 | Nine months ended September 30, 2025 | September 30, 2024 |
|---|---|---|---|---|
| United States | 634 | 604 | 614 | 551 |
| International | 114 | 110 | 109 | 104 |
| NGL (Mbbl) | ||||
| United States | 298 | 279 | 284 | 266 |
| International | 39 | 37 | 38 | 38 |
| Natural Gas (MMcf) | ||||
| United States | 1,770 | 1,701 | 1,736 | 1,423 |
| International | 528 | 500 | 509 | 516 |
| Total Sales Volumes (Mboe) (a) | 1,468 | 1,397 | 1,419 | 1,282 |
(a) Natural gas volumes have been converted to Boe based on energy content of six Mcf of gas to one barrel of oil. Conversion to Boe does not necessarily result in price equivalency.
The following table presents information about Occidental's average realized prices and index prices:
| Average Realized Prices Oil ($/Bbl) | Three months ended September 30, 2025 | June 30, 2025 | Nine months ended September 30, 2025 | September 30, 2024 |
|---|---|---|---|---|
| United States | $64.55 | $62.83 | $66.01 | $76.68 |
| International | $66.03 | $68.88 | $69.03 | $79.07 |
| Total Worldwide | $64.78 | $63.76 | $66.46 | $77.06 |
| NGL ($/Bbl) | ||||
| United States | $18.98 | $20.05 | $21.46 | $20.22 |
| International | $24.40 | $25.72 | $25.97 | $28.31 |
| Total Worldwide | $19.60 | $20.71 | $21.99 | $21.22 |
| Natural Gas ($/Mcf) | ||||
| United States | $1.48 | $1.33 | $1.74 | $0.81 |
| International | $1.89 | $1.90 | $1.89 | $1.89 |
| Total Worldwide | $1.57 | $1.46 | $1.78 | $1.10 |
| Average Index Prices | ||||
| WTI oil ($/Bbl) | $64.93 | $63.74 | $66.70 | $77.54 |
| Brent oil ($/Bbl) | $68.14 | $66.59 | $69.87 | $81.73 |
| NYMEX gas ($/Mcf) | $3.28 | $3.68 | $3.53 | $2.24 |
| Average Realized Prices as Percentage of Average Index Prices | ||||
| Worldwide oil as a percentage of average WTI | 100% | 100% | 100% | 99% |
| Worldwide oil as a percentage of average Brent | 95% | 96% | 95% | 94% |
| Worldwide NGL as a percentage of average WTI | 30% | 32% | 33% | 27% |
| Domestic natural gas as a percentage of average NYMEX | 45% | 36% | 49% | 36% |
Q3 2025 compared to Q2 2025
Oil and gas segment earnings were $1.3 billion for the three months ended September 30, 2025, compared with segment earnings of $0.9 billion for the three months ended June 30, 2025. Excluding the impact of items affecting comparability, oil and gas segment earnings increased due to higher crude oil sales volumes worldwide and higher domestic oil prices.
Average daily sales volumes increased for the three months ended September 30, 2025, compared to the three months ended June 30, 2025, mainly due to higher production from current year drilling plans in the Midland Basin.
Oil and gas segment earnings were $3.9 billion for the nine months ended September 30, 2025, compared to $4.0 billion for the nine months ended September 30, 2024. Excluding the impact of items affecting comparability, oil and gas segment earnings decreased primarily due to lower crude oil prices, partially offset by higher sales volumes due to a full nine months of production from CrownRock assets in 2025.
Average daily sales volumes increased for the nine months ended September 30, 2025, compared to the same period in 2024, mainly due to the CrownRock Acquisition.
The following table presents an analysis of the impacts of changes in average realized prices and sales volumes with regard to Occidental's domestic and international oil and gas revenue:
| millions United States Revenue | Three months ended June 30, 2025 (b) | Increase (Decrease) Related to Price Realizations | Net Sales Volumes | Three months ended September 30, 2025 (b) |
|---|---|---|---|---|
| Oil | $3,456 | $98 | $210 | $3,764 |
| NGL | 457 | (27) | 39 | 469 |
| Natural gas | 205 | 21 | 14 | 240 |
| Total | $4,118 | $92 | $263 | $4,473 |
| International Revenue | ||||
| Oil (a) | $690 | $(30) | $35 | $695 |
| NGL | 86 | (4) | 6 | 88 |
| Natural gas | 88 | (1) | 4 | 91 |
| Total | $864 | $(35) | $45 | $874 |
| millions United States Revenue | Nine months ended September 30, 2024 (b) | Increase (Decrease) Related to Price Realizations | Net Sales Volumes | Nine months ended September 30, 2025 (b) |
|---|---|---|---|---|
| Oil | $11,564 | $(1,796) | $1,282 | $11,050 |
| NGL | 1,314 | 129 | 61 | 1,504 |
| Natural gas | 314 | 534 | (22) | 826 |
| Total | $13,192 | $(1,133) | $1,321 | $13,380 |
| International Revenue | ||||
| Oil (a) | $2,259 | $(255) | $56 | $2,060 |
| NGL | 293 | (23) | — | 270 |
| Natural gas | 269 | 1 | (7) | 263 |
| Total | $2,821 | $(277) | $49 | $2,593 |
(a) Includes the impact of international production sharing contracts.
(b) Excludes "other" oil and gas revenue. See Note 2 - Revenue in the Notes to Consolidated Condensed Financial Statements in Part I, Item 1 of this Form 10-Q for additional information regarding other revenue.
CHEMICAL SEGMENT
Q3 2025 compared to Q2 2025
Chemical segment earnings for the three months ended September 30, 2025 were $197 million, compared to $213 million for the three months ended June 30, 2025. The decline in the third quarter of 2025 resulted primarily from lower realized prices and volumes across most product lines, partially offset by favorable raw material costs.
Chemical segment earnings for the nine months ended September 30, 2025 were $595 million, compared to $854 million for the nine months ended September 30, 2024. Excluding items affecting comparability, the decrease in pre-tax income resulted from lower realized pricing across most product lines, primarily PVC, and higher raw material and energy costs.
MIDSTREAM AND MARKETING SEGMENT
Q3 2025 compared to Q2 2025
Midstream and marketing segment earnings for the three months ended September 30, 2025 were $93 million, compared to segment earnings of $49 million for the three months ended June 30, 2025. Excluding the impact of items affecting comparability, midstream and marketing third quarter results decreased due to lower Waha-to-Gulf-Coast gas spreads and higher expenses due to the increase in activities in the low-carbon ventures businesses, partially offset by higher sulfur prices at Al Hosn and higher WES equity method investment income.
Midstream and marketing segment earnings for the nine months ended September 30, 2025 were $65 million, compared to segment earnings of $714 million for the nine months ended September 30, 2024. Excluding the impact of items affecting comparability, midstream and marketing results increased due to higher sulfur prices at Al Hosn, higher Waha-to-Gulf-Coast gas spreads, and lower long-haul crude transportation costs, partially offset by higher losses from equity method investees and higher expenses due to the increase in activities in the low-carbon ventures businesses.
INCOME TAXES
The following table sets forth the calculation of the worldwide effective tax rate for income:
millions, except percentages
| Three months ended September 30, 2025 | June 30, 2025 | Nine months ended September 30, 2025 | September 30, 2024 | |
|---|---|---|---|---|
| Income before income taxes | $1,166 | $738 | $3,236 | $4,239 |
| Income tax expense | ||||
| Domestic - federal and state | (163) | (65) | (465) | (700) |
| International | (161) | (205) | (516) | (523) |
| Total income tax expense | (324) | (270) | (981) | (1,223) |
| Income from continuing operations | $842 | $468 | $2,255 | $3,016 |
| Worldwide effective tax rate | 28% | 37% | 30% | 29% |
Occidental estimates its annual effective income tax rate in recording its quarterly provision for income taxes in the various jurisdictions in which Occidental operates, adjusted for certain discrete items. Each quarter, Occidental updates these rates and records a cumulative adjustment to its income taxes by applying the rates to the pre-tax income excluding certain discrete items. Occidental’s quarterly estimate of its effective tax rates can vary significantly based on various forecasted items, including future commodity prices, capital expenditures, expenses for which tax benefits are not recognized and the geographic mix of pre-tax income and losses.
The worldwide effective tax rates for the periods presented in the table above are primarily driven by Occidental's jurisdictional mix of income. U.S. income is taxed at a U.S. federal statutory rate of 21%, while international income is subject to tax at statutory rates as high as 55%.
RECENT TAX LEGISLATION
For additional information on the potential impacts to Occidental related to the OBBB, IRA, and Pillar Two initiative, see Note 7 - Income Taxes in the Notes to Consolidated Condensed Financial Statements in Part I, Item 1 of this Form 10-Q.
LIQUIDITY AND CAPITAL RESOURCES
SOURCES AND USES OF CASH
As of September 30, 2025, Occidental's sources of liquidity included $2.2 billion of cash and cash equivalents and $4.15 billion of borrowing capacity under its RCF, which matures on June 30, 2028. Following the close of the OxyChem Transaction, which is anticipated to close in the fourth quarter of 2025, Occidental intends to use the majority of the after-tax proceeds of the sale to further reduce debt by approximately $6.5 billion. There were no borrowings outstanding on Occidental's RCF as of September 30, 2025.
Operating Cash Flows
Operating cash flow from continuing operations was $7.9 billion for the nine months ended September 30, 2025, compared to $8.2 billion for the nine months ended September 30, 2024. The decrease in operating cash flow from continuing operations, compared to the same period in 2024, was primarily due to higher income tax payments as certain tax payments related to 2024 were deferred into 2025 and higher interest payments due to the debt issued for the CrownRock Acquisition.
Investing Cash Flows
Occidental’s net cash used by investing activities was $4.0 billion for the nine months ended September 30, 2025, compared to $12.8 billion for the nine months ended September 30, 2024. Investing activities for the nine months ended September 30, 2025 included $2.2 billion in divestitures of non-core oil and gas assets, compared to $1.7 billion in divestitures of non-core oil and gas assets for the nine months ended September 30, 2024. See Note 5 - Acquisitions and Divestitures in the Notes to Consolidated Condensed Financial Statements in Part I, Item 1 of this Form 10-Q for additional information.
Capital expenditures, of which the majority were for the oil and gas segment, were $5.7 billion for the nine months ended September 30, 2025, compared to $5.2 billion for the nine months ended September 30, 2024.
Financing Cash Flows
Occidental’s net cash used by financing activities was $3.9 billion for the nine months ended September 30, 2025, which included payments of long-term debt of $3.6 billion and payments of common and preferred cash dividends of approximately $1.2 billion, partially offset by cash received of approximately $900 million related to warrant exercises. See Note 4 - Long-Term Debt in the Notes to Consolidated Condensed Financial Statements in Part I, Item 1 of this Form 10-Q.
Net cash provided by financing activities for the nine months ended September 30, 2024 was $5.0 billion, which included net proceeds from debt issuance of $9.6 billion and proceeds from the issuance of common stock of $571 million primarily related to warrant exercises, offset by payments of long-term debt of $4.0 billion and payments of common and preferred cash dividends of $1.1 billion.
Occidental’s Zero Coupons can be put to Occidental in October of each year, in whole or in part, for the then accreted value of the outstanding Zero Coupons. The Zero Coupons can next be put to Occidental in October 2026, which, if put in whole, would require a payment of $401 million at such date. Occidental currently has the ability to meet this obligation and may use available capacity under the RCF to satisfy the put should it be exercised.
As of the date of this filing, Occidental was in compliance with all covenants in its financing agreements. As of the date of this filing, Occidental has no remaining debt maturities due in 2025, $1.6 billion in 2026, $1.5 billion in 2027 and $17.7 billion thereafter. Occidental terminated its receivables securitization facility effective September 26, 2025. Occidental currently expects its cash on hand, operating cash flows and funds available from the RCF to be sufficient to meet its near-term debt maturities, operating expenditures, capital expenditures and other obligations for the next 12 months from the date of this filing.
Occidental or its subsidiaries have provided financial assurances through a combination of cash, letters of credit and surety bonds. As of September 30, 2025, Occidental had no outstanding letters of credit under the RCF.
For additional information, see Risk Factors in Part I, Item 1A of Occidental’s 2024 Form 10-K and Part II, Item 1A Risk Factors below.
ENVIRONMENTAL LIABILITIES AND EXPENDITURES
Occidental’s operations are subject to stringent federal, regional, state, provincial, tribal, local and international laws and regulations related to improving or maintaining environmental quality. Occidental’s environmental compliance costs have generally increased over time and are expected to rise in the future. Occidental factors environmental expenditures for its operations as an integral part of its business planning process.
The laws that require or address environmental remediation, including CERCLA and similar federal, regional, state, provincial, tribal, local and international laws, may apply retroactively and regardless of fault, the legality of the original activities or the current ownership or control of sites. Occidental or certain of its subsidiaries participate in or actively monitor a range of remedial activities and government or private proceedings under these laws with respect to alleged past practices at Third-Party, Currently Operated, and Closed or Non-Operated Sites, in addition to NPL Sites. Remedial activities may include one or more of the following: investigation involving sampling, modeling, risk assessment or monitoring; cleanup measures including removal, treatment or disposal; or operation and maintenance of remedial systems. The environmental proceedings seek funding or performance of remediation and, in some cases, compensation for alleged property damage, natural resource damages, punitive damages, civil penalties, injunctive relief and government oversight costs.
See Note 8 - Environmental Liabilities and Expenditures in the Notes to Consolidated Condensed Financial Statements in Part I, Item 1 of this Form 10-Q and the Environmental Liabilities and Expenditures section of Management’s Discussion and Analysis of Financial Condition and Results of Operations in the 2024 Form 10-K for additional information regarding Occidental’s environmental liabilities and expenditures.
LAWSUITS, CLAIMS, COMMITMENTS AND CONTINGENCIES
Occidental accrues reserves for outstanding lawsuits, claims and proceedings when it is probable that a liability has been incurred and the liability can be reasonably estimated. Occidental has disclosed its reserve balances for environmental remediation matters and its estimated range of reasonably possible additional losses for such matters. See Note 8 - Environmental Liabilities and Expenditures and Note 9 - Lawsuits, Claims, Commitments and Contingencies in the Notes to Consolidated Condensed Financial Statements in Part I, Item 1 of this Form 10-Q for further information.
Market risk
As filed, 259 characters, with its headings, lists and tables. Extracted from the main document; charts and exhibits are in the original on sec.gov.
For the three months ended September 30, 2025, there were no material changes in the information required to be provided under Item 305 of Regulation S-K included under Item 7A, Quantitative and Qualitative Disclosures About Market Risk in the 2024 Form 10-K.
Controls and procedures
As filed, 937 characters, with its headings, lists and tables. Extracted from the main document; charts and exhibits are in the original on sec.gov.
Occidental's President and Chief Executive Officer and its Senior Vice President and Chief Financial Officer supervised and participated in Occidental's evaluation of the effectiveness of its disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) as of the end of the period covered by this report. Based upon that evaluation, Occidental's President and Chief Executive Officer and Senior Vice President and Chief Financial Officer concluded that Occidental's disclosure controls and procedures were effective as of September 30, 2025.
There has been no change in Occidental’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the three months ended September 30, 2025 that has materially affected, or is reasonably likely to materially affect, Occidental’s internal control over financial reporting.
Risk factors
As filed, 4,925 characters, with its headings, lists and tables. Extracted from the main document; charts and exhibits are in the original on sec.gov.
Except for the addition of the risk factors set forth below, there have been no material changes to the risk factors included under Part I, Item 1A of the 2024 Form 10-K.
Risks related to the OxyChem Transaction
The OxyChem Transaction is subject to various risks, uncertainties and conditions and may not be completed on the terms or timeline currently contemplated, if at all.
On October 1, 2025, the Company, through two subsidiaries, entered into the Purchase Agreement, pursuant to which, subject to the terms and conditions set forth therein, Berkshire Hathaway has agreed to acquire all of the issued and outstanding equity interests in OxyChem for $9.7 billion, subject to customary adjustments for cash and indebtedness and for changes in working capital from an agreed upon working capital target. The Purchase Agreement provides that completion of the OxyChem Transaction is subject to the satisfaction or waiver of customary closing conditions, including, among other things, obtaining certain required regulatory consents or approvals. There can be no assurance regarding the timing of the completion of the OxyChem Transaction or that the transaction will be completed. Unanticipated developments could delay, prevent or otherwise adversely affect the OxyChem Transaction, including, but not limited to, potential issues or delays in obtaining various regulatory approvals. In addition, each party has the right to terminate the Purchase Agreement under specified circumstances, including if the closing of the transaction has not occurred on or before March 30, 2026, subject to an automatic extension of 90 days if certain conditions relating to regulatory approvals have not been satisfied or waived by such date.
If the OxyChem Transaction is not completed, Occidental will not be able to accelerate the reduction of its outstanding indebtedness with the anticipated proceeds from the transaction.
Occidental expects to use a majority of the after-tax proceeds from the transaction to accelerate the reduction of its outstanding indebtedness. If the OxyChem Transaction is not completed, Occidental will not be able to complete the anticipated accelerated reduction in outstanding indebtedness, which could have an adverse effect on Occidental’s cost of capital and ability to access capital markets. If the transaction is not completed and Occidental is unable to generate sufficient funds from its operations or divestitures on favorable terms or at all to satisfy its capital requirements, including its existing debt obligations, or to raise additional capital on acceptable terms, Occidental’s businesses, financial condition, results of operations, cash flows and/or stock price could be adversely affected.
If the OxyChem Transaction is completed, Occidental's business will be more exposed to fluctuations in the markets for oil, NGL and natural gas, which could adversely affect Occidental's business, financial condition, results of operations or cash flows.
If the OxyChem Transaction is completed, Occidental's business will be more exposed to fluctuations in the markets for oil, NGL and natural gas. Prices for oil, NGL and natural gas fluctuate widely. Historically, the markets for oil, NGL and natural gas have been volatile and may continue to be volatile in the future. If the prices of oil, NGL or natural gas continue to be volatile or decline, Occidental’s operations, financial condition, cash flows, level of expenditures, the quantity of estimated proved reserves that may be attributed to its properties and/or stock price may be materially and adversely affected. Prices are determined by global and local market forces which are not in Occidental’s control.
In connection with the OxyChem Transaction, the Company, by or through one or more of its subsidiaries, will retain certain liabilities and be subject to post-closing indemnification obligations, any of which could adversely affect Occidental's business, financial condition, results of operations or cash flows.
In connection with the OxyChem Transaction, an Occidental subsidiary will retain environmental liabilities relating to OxyChem's legacy sites. Furthermore, under the Purchase Agreement, there are post-closing indemnification obligations, for, among other items, (i) such legacy environmental liabilities and (ii) pre-closing liabilities of OxyChem, including pre-closing environmental liabilities, in each case, subject to certain limitations and procedures. In connection with the closing, Occidental will enter into a guaranty in favor of Berkshire Hathaway to guarantee those indemnification obligations of its subsidiaries. Such retained liabilities or indemnification obligations could be greater than expected and could result in significant liability to Occidental, which could adversely affect its business, financial condition, results of operations or cash flows.
Figures reported in this filing
Standardized line items from the XBRL in this filing, for the period ended 2025-09-30. Comparative periods it repeats are left out.
| Line item | Period | Value | XBRL concept |
|---|---|---|---|
| Revenue | 3 months2025-07-01 to 2025-09-30 | $6.68bn | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Revenue | 9 months2025-01-01 to 2025-09-30 | $19.91bn | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months2025-07-01 to 2025-09-30 | $812.0m | us-gaap:CostOfGoodsAndServicesSold |
| Cost of revenue | 9 months2025-01-01 to 2025-09-30 | $2.46bn | us-gaap:CostOfGoodsAndServicesSold |
| Selling, general and administrative | 3 months2025-07-01 to 2025-09-30 | $277.0m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Selling, general and administrative | 9 months2025-01-01 to 2025-09-30 | $828.0m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Income tax | 3 months2025-07-01 to 2025-09-30 | $324.0m | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 9 months2025-01-01 to 2025-09-30 | $981.0m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months2025-07-01 to 2025-09-30 | $842.0m | us-gaap:ProfitLoss |
| Net income | 9 months2025-01-01 to 2025-09-30 | $2.25bn | us-gaap:ProfitLoss |
| Diluted EPS | 3 months2025-07-01 to 2025-09-30 | $0.65 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 9 months2025-01-01 to 2025-09-30 | $1.68 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months2025-07-01 to 2025-09-30 | $0.67 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 9 months2025-01-01 to 2025-09-30 | $1.73 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months2025-07-01 to 2025-09-30 | 1,003,100,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 9 months2025-01-01 to 2025-09-30 | 999,100,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 9 months2025-01-01 to 2025-09-30 | $7.90bn | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 9 months2025-01-01 to 2025-09-30 | $5.67bn | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Share repurchases | 9 months2025-01-01 to 2025-09-30 | $0 | us-gaap:PaymentsForRepurchaseOfCommonStock |
| Cash and equivalents | At period end2025-09-30 | $2.16bn | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | At period end2025-09-30 | $8.81bn | us-gaap:AssetsCurrent |
| Total assets | At period end2025-09-30 | $83.47bn | us-gaap:Assets |
| Current liabilities | At period end2025-09-30 | $9.42bn | us-gaap:LiabilitiesCurrent |
| Long-term debt | At period end2025-09-30 | $20.85bn | us-gaap:LongTermDebtNoncurrent |
| Shareholders' equity | At period end2025-09-30 | $36.26bn | us-gaap:StockholdersEquity |
Source: SEC EDGAR, the filing index for accession 0001628280-25-051071. Last ingested by Listed: Oct 24, 2026, 14:57 ET. Listed shows no prices and gives no investment advice.