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Occidental Petroleum: 4 Reasons to Love These Prices

Occidental Petroleum Oil Rig and Flag

Key Points

  • Occidental Petroleum has been growing its inventory of U.S. wells with the acquisition of CrownRock.
  • Berkshire Hathaway owns just over 28% of the outstanding shares.
  • Occidental Petroleum is generating a lucrative revenue stream with its DAC plants while simultaneously advancing the net-zero carbon initiative.
  • Five stocks we like better than Occidental Petroleum.
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President Trump campaigned on a “Drill, baby, drill” policy, promising to bring down fuel and energy prices. This policy has been coming to fruition in the oil sector. While the oil and energy sector is feeling the pain, investors may be able to seize some buying opportunities.

Leading U.S. oil and gas producer Occidental Petroleum Co. NYSE: OXY stock has been teetering near 52-week lows as crude oil prices have fallen by more than 11% since the start of 2025.

Here are four reasons to love these prices for Occidental Petroleum.

Occidental Petroleum OXY stock chart

1) Warren Buffet Still Loves the Stock as Berkshire Raised Their Stake to $29 Billion

Occidental Petroleum Today

Occidental Petroleum Co. stock logo
OXYOXY 90-day performance
Occidental Petroleum
$47.31 +0.78 (+1.67%)
As of 03:59 PM Eastern
This is a fair market value price provided by Polygon.io. Learn more.
52-Week Range
$44.70
$71.19
Dividend Yield
2.03%
P/E Ratio
19.39
Price Target
$60.45

Berkshire Hathaway purchased 763,017 shares of Occidental Petroleum for around $35.7 million on Feb. 10, 2025, as shares fell 30% off their highs.

This transaction grew their stake to just over 28% of the company, which makes them the largest shareholder.

Berkshire also owns 8% of Occidental’s preferred stock.

Overall, Berkshire owns more than 264 million shares.

They’ve been buying since 2019, so their average price is estimated to be around the lower $50 range. Investors taking positions at recent prices would be getting in cheaper than "The Oracle of Omaha."

2) The $12 Billion Crown Rock Acquisition Was Accretive in Many Ways

Occidental Petroleum closed its $12 billion acquisition of CrownRock in August 2024. The acquisition helped bump up Occidental’s domestic well inventory to 80% from 50%. It added 1,700 new well locations, of which 1,250 have less than $60 breakeven costs and 750 at sub-$40 WTI breakeven, boosting that inventory by 35%. It provided scale to its Midland Basin operations, adding 94,000 net acres, which is one of the three basins in the Permian Basin.

The Permian Basin is the size of North Dakota. The increased cash flow enabled a dividend increase. It also added the production of 170,000 barrels of oil per day. However, Occidental incurred an additional $9.1 billion of new debt, in addition to assuming $1.2 billion of CrownRock’s existing debt during the acquisition.

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3) Occidental Petroleum Has Been Growing Its Carbon Capture Business

Occidental is a pioneer in carbon capture, utilization and storage (CCUS), which enables new revenue streams while aligning with the global decarbonization trends. 

Occidental Petroleum MarketRank™ Stock Analysis

Overall MarketRank™
95th Percentile
Analyst Rating
Hold
Upside/Downside
27.8% Upside
Short Interest Level
Healthy
Dividend Strength
Moderate
Environmental Score
-8.07
News Sentiment
0.71mentions of Occidental Petroleum in the last 14 days
Insider Trading
Acquiring Shares
Proj. Earnings Growth
7.54%
See Full Analysis

The company’s $1.1 billion acquisition of Carbon Engineering in August 2023 fuels its Stratos Direct Air Capture (DAC) plant in Texas, which captures 500,000 metric tons of CO2 annually.

Occidental plans to add 100 more DAC plants by 2035. Selling carbon credits generated from the DAC plants helps offset the emissions from its oil production.

Carbon dioxide removal (CDR) is carbon credits representing the removal of one metric ton of CO2 equivalent. While they are an important tool for achieving net zero emissions, they are also a revenue generator. CDR credits can be sold in the voluntary carbon markets for $500 to $1100 per metric ton or generate a tax credit of $130 to $140 per metric ton under the Inflation Reduction Act (IRA).

Occidental is in a carbon credit deal with Microsoft Co. NASDAQ: MSFT to purchase carbon credits that are generated from its DAC plants.

4) Occidental Continues to Lower Breakeven Production Costs Per Barrel

While crude oil prices have fallen nearly 14% year-to-date (YTD) as of Mar. 16, 2025, Occidental Petroleum is still making money. West Texas Intermediate (WTI) crude oil at $67.18 per barrel on Mar. 16, 2025. CEO Vicki Hollub stated in their Q4 2024 conference call that they have been "…replacing higher cost production with a higher volume of lower cost new reserves.”

This helps to drive higher earnings per barrel and ultimately higher earnings-per-share (EPS). They improved their average well breakeven by 6%. The company improved drilling and completion costs by 12% against 2023 levels and forecast a 7% drilling cost improvement in 2025. Breakeven production costs per barrel are well below $60 as new wells cost more, but existing wells in the Permian Basin can be in the low $30s.

Should You Invest $1,000 in Occidental Petroleum Right Now?

Before you consider Occidental Petroleum, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Occidental Petroleum wasn't on the list.

While Occidental Petroleum currently has a Hold rating among analysts, top-rated analysts believe these five stocks are better buys.

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Jea Yu
About The Author

Jea Yu

Contributing Author

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Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Occidental Petroleum (OXY)
4.7317 of 5 stars
$47.31+1.7%2.03%19.39Hold$60.45
Microsoft (MSFT)
4.9156 of 5 stars
$388.70+0.0%0.85%31.30Moderate Buy$510.43
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