Highlights

  • Occidental shows 280.51% one-year basic EPS growth, a P/E of 18.88 and PEG of -13.36.
  • Total worldwide realized oil price was $85.91 per barrel in the third quarter.
  • September Gulf of America curtailments left third quarter net sales volumes at 110 Mboed.
  • The Board raised the quarterly dividend 8% to $0.28 per share in August.

Growth, P/E and PEG sit side by side at Occidental Petroleum (NYSE:OXY), an undervalued growth stock: basic earnings per share grew 280.51% over one year, the trailing twelve-month P/E ratio is 18.88 and the PEG ratio, on an expected basis, is -13.36, with shares trading at USD 63.38 on October 28, 2026, up 1.04%. Alongside those figures, the oil and gas producer announced an 8% increase in its quarterly dividend to $0.28 per share in August, temporarily curtailed some Gulf of America production in September and furnished its third quarter 2026 earnings considerations on October 13.

Occidental is headquartered in Houston, Texas, and incorporated in Delaware. It operates oil and gas assets, a midstream and marketing business and Low Carbon Ventures, the segment that includes the Stratos direct air capture plant in the Permian Basin. Management said resources total 16.5 billion BOE, with approximately 88% located in the United States, complemented by international assets. Its fiscal year ends December 31.

Growth: Third Quarter 2026 Production, Costs and Realized Prices

Occidental has not yet reported third quarter 2026 net income or earnings per share. Its October 13 Form 8-K furnished a summary of factors management believes will affect the quarter, which the company described as preliminary and not an estimate of third quarter earnings. The company said total production for the quarter is within its guidance range and includes the temporary Gulf of America downtime.

For the three months ended September 30, 2026, Gulf of America net sales volumes were 110 Mboed, domestic lease operating cost was $8.54 per boe and oil represented 48.8% of total company production.

Average realized prices were $85.91 per barrel for worldwide oil, $24.63 per barrel for worldwide NGL and $1.69 per Mcf for worldwide natural gas. Index prices averaged $85.79 per barrel for WTI and $91.62 per barrel for Brent.

Valuation: P/E of 18.88, PEG of -13.36 and Management Commentary on Cash Flow

The P/E ratio of 18.88 is measured on trailing twelve-month earnings, and the PEG ratio of -13.36 is on an expected basis.

On its second quarter 2026 call on August 12, management said it measures value by its ability to increase both the return on and the return of capital through the cycle. It described a pathway to add over $4 billion of annual sustainable cash flow by 2030 relative to 2025, without production growth, and said approximately 85% of that improvement is expected even at lower prices.

Management attributed the plan partly to $900 million lower sustaining capital and roughly $400 million of Low Carbon Ventures capital that is expected to roll off beginning next year.

Capital Returns, Debt and Capital Spending Plans

On the second quarter call, management said the Board approved an 8% increase in the quarterly dividend to $0.28 per share. The immediate cash flow priority is to reduce principal debt to $10 billion. After that milestone, management said it will focus on reducing net debt, balancing further principal debt reduction against building cash ahead of the preferred equity redemption in August 2029.

Management described share repurchases as opportunistic and any continuous buyback program as a lower priority until the preferred equity is redeemed. In the third quarter, crude oil collar settlements reduced operating cash flow before working capital by $94 million, the earnings considerations state.

Disclosed Risks and Outlook for the Second Half of 2026

In September, Occidental temporarily curtailed production at certain Gulf of America facilities owing to a third-party gas pipeline constraint and maintenance activities. Production has been partially restored, with the remainder expected to return as the constraint is resolved.

On the second quarter call, management said international volumes were lower owing to Middle East disruptions and that the situation there is fluid. It said midstream income is expected to decline in the third quarter as the Waha to Gulf Coast gas spread narrows, with the effect largely offset by upstream gas realizations, and cited increasing CO2 cost pressure tied to higher oil prices. Stratos Trains 3 and 4 are in repair and commissioning, with full plant commissioning expected to begin around the end of the year.

Guidance given on that call called for third quarter production of 1.4 million to 1.44 million BOE per day and domestic lease operating expense of $8.75 per BOE. The company raised full year production guidance, maintained full year capital guidance of $5.5 billion to $5.9 billion and said its starting point for 2027 capital spending is expected to be $5.9 billion, with relatively flat production.