Occidental Petroleum Faces Pivotal Week with Earnings and Major Asset Sale

This week represents a critical juncture for oil and gas producer Occidental Petroleum, with two significant events poised to influence the company’s stock trajectory. The energy firm prepares to release third-quarter financial results while simultaneously advancing a multi-billion dollar chemical unit sale to Warren Buffett’s Berkshire Hathaway. These developments could potentially reverse the stock’s prolonged downward trend.

Berkshire Hathaway Acquisition Draws Scrutiny

The proposed $9.7 billion transaction involving Occidental’s OxyChem chemical division, scheduled for completion in the fourth quarter, faces mounting criticism from industry observers. Analysts at Scotiabank contend the sale price substantially undervalues the business unit, estimating its true worth at approximately $12 billion.

The controversy stems from Occidental’s decision to divest precisely the segment that has historically provided stable cash flows and consistent growth. While CEO Vicki Hollub maintains the move will enable greater focus on core operations and debt reduction, investors question whether the company is sacrificing a valuable asset for insufficient compensation.

Debt Reduction Strategy Takes Center Stage

A primary motivation for the chemical division sale involves Occidental’s leveraged balance sheet. The company plans to allocate $6.5 billion from transaction proceeds directly toward debt repayment—an ambitious target that would reduce total debt below $15 billion. This would represent significant progress toward financial stability following the expensive Anadarko acquisition in 2019 and the more recent CrownRock transaction completed in August 2024.

Should investors sell immediately? Or is it worth buying Occidental Petroleum?

Despite these strategic efforts, market response has been tepid. Since January, Occidental shares have declined more than 25%, trading below all major moving averages. Technical indicators remain concerning, while fundamental valuation oscillates between optimism and skepticism.

Quarterly Earnings Under Microscope

Market attention converges on November 10, when Occidental discloses third-quarter performance metrics. Wall Street anticipates earnings per share of $0.53—representing a substantial 33% increase compared to the previous quarter. This projected improvement primarily reflects favorable crude oil pricing, which analysts estimate provided approximately $137 million in after-tax benefits.

However, contextual analysis reveals persistent challenges. Despite quarterly progression, profitability remains well below previous year levels. The crucial determination will be whether Occidental effectively capitalized on improved market conditions or whether operational weaknesses limited potential gains.

The confluence of these developments raises fundamental questions about Occidental’s direction. Will this week mark a definitive turning point for the embattled energy company, or could disappointing results trigger further declines? Market participants await answers with heightened anticipation.