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.Get Occidental Petroleum alerts:Here are four re ...

The still-young year of 2025 hasn't been all that kind to oil stocks, many of which are trading down since New Year's Day. One of these laggards has been sector mainstay Occidental Petroleum (OXY -1.18%), despite the company's convincing bottom-line beat in its most recent earnings report.Recently, one analyst tracking the stock downgraded his recommendation on Occidental and cut his price target. Yet his previous take was so bullish, he still feels the shares have significant upside.Still a bull, despite t ...

Group 1: Market Trends and Predictions - The energy sector is expected to see significant growth, with Occidental Petroleum forecasted to have a 12-month stock price of $60.86, representing a 28.85% upside based on 21 analyst ratings [4] - The manufacturing PMI index indicates a two-month expansion in the U.S. manufacturing sector, suggesting potential momentum for oil demand [5] - Both the U.S. and China are positioned to increase oil demand, which could negatively impact put option buyers unless they hedge their positions [6] Group 2: Institutional Investments - Institutional investors, such as the Vanguard Group, have increased their holdings in Transocean Ltd., now owning 9.0% of the company, valued at approximately $295.5 million [8] - Bank of America has boosted its metals & mining ETF holdings by 24.4%, now holding a stake worth $139.5 million, or 7.2% ownership in the fund [12] Group 3: Market Sentiment and Analyst Ratings - There is a prevailing bullish sentiment among Wall Street analysts regarding the basic materials sector, which may lead to increased confidence if put option traders are forced to close their positions [13] - Barrick Gold Corp. has approved a significant stock buyback, reflecting management's confidence in the company's sales and earnings amidst a strong gold market [10]

Core Viewpoint - Occidental Petroleum's stock has reached a 52-week low, raising investor concerns, but the long-term outlook remains positive due to solid cash flow and strategic repositioning efforts [1][2]. Financial Performance - The company has a P/E ratio of 18.62 and a dividend yield of 2.11%, with a price target set at $61.50 [1]. - By the end of 2024, Occidental aims to achieve a $4.5 billion debt reduction target while increasing cash balances and total assets, with shareholder equity improving by over 13% in 2024 and expected growth in 2025 [8]. Strategic Initiatives - Occidental is undergoing a significant repositioning towards sustainability, including a shift to greener energy businesses and enhancing capital returns [2]. - The STRATOS direct air capture (DAC) plant, the largest of its kind, is expected to begin operations by Q3 2025, contributing to revenue growth in 2026 as it ramps up capacity [4]. - The Battleground chemical plant expansion is set to enhance the higher-margin mid-stream chemical business, with operations expected to commence in mid-2026 [5]. Market Sentiment - Institutional interest in Occidental is solid and growing, with notable purchases by Berkshire Hathaway, which owns approximately 30% of the stock and has been approved to acquire up to 50% [2][9]. - The stock is currently rated as a "Hold" by analysts, with a projected earnings growth of 7.54% [7][8]. Investment Outlook - The stock price has retreated to a critical support level between $43 and $48, which aligns with Warren Buffett's initial entry points, indicating a potential market reversal driven by improving financial conditions [10]. - Despite the current market pressures, the expectation is for the stock to consolidate around its current levels rather than decline further [11].

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Core Viewpoint - Occidental has announced an offer to exercise its outstanding publicly traded warrants at a temporarily reduced price to encourage participation and raise funds for corporate purposes [1][5]. Group 1: Offer Details - The offer allows warrant holders to purchase shares of Occidental's common stock at a reduced exercise price of $21.30, down from the original $22.00 [2]. - The warrants were initially distributed as a dividend on August 3, 2020, to shareholders of record as of July 6, 2020, and are listed on the NYSE under the symbol "OXY WS" [2]. - The offer is open until 5:00 p.m. Eastern Time on March 31, 2025, with no minimum participation requirement [4]. Group 2: Financial Implications - If all outstanding warrants are exercised at the reduced price, Occidental expects to receive gross proceeds of approximately $1.6 billion [5]. - The proceeds will be used for general corporate purposes, which may include the redemption or repayment of certain outstanding debts [5]. Group 3: Company Background - Occidental is an international energy company with significant operations in the U.S., Middle East, and North Africa, and is one of the largest oil and gas producers in the U.S. [9]. - The company also has a midstream and marketing segment and a chemical subsidiary, OxyChem, which produces essential building blocks for various products [9].

Core Viewpoint - Occidental Petroleum Corporation has announced an offer to exercise its outstanding publicly traded warrants at a temporarily reduced price to encourage participation and generate funds for corporate purposes [1][5]. Offer Details - The warrants allow holders to purchase one share of Occidental's common stock at an exercise price of $22.00, now temporarily reduced to $21.30 [2][5]. - The warrants were initially distributed as a dividend on August 3, 2020, to shareholders of record as of July 6, 2020, and are listed on the NYSE under the symbol "OXY WS" [2]. - There is no minimum participation requirement for the offer [2]. Participation Process - Holders must elect to participate in the offer by 5:00 p.m. Eastern Time on March 31, 2025, which may be extended at Occidental's discretion [4]. - Participants must deliver payment and required documentation before the expiration date to receive shares promptly after the offer ends [4]. Financial Implications - If all outstanding warrants are exercised at the reduced price, Occidental expects to receive approximately $1.6 billion in gross proceeds [5]. - The proceeds will be used for general corporate purposes, including potential debt repayment [5]. Company Overview - Occidental is an international energy company with significant operations in the U.S., Middle East, and North Africa, and is one of the largest oil and gas producers in the U.S. [9]. - The company is involved in various segments, including midstream and marketing, and is focused on advancing technologies for carbon management [9].

Core Insights - Warren Buffett has significantly invested in Occidental Petroleum, purchasing shares in 10 of the last 13 quarters, making it a key holding outside of Berkshire Hathaway itself [2][4]. Group 1: Investment Activity - Berkshire Hathaway has been a net seller of stocks for nine consecutive quarters, but has engaged in a multi-year buying spree with Occidental Petroleum [2]. - Buffett initially invested in Occidental in Q3 2019 but exited in Q2 2020, before resuming purchases in Q1 2022 and consistently adding to the stake [3][4]. - As of now, Berkshire owns over 264.9 million shares of Occidental, valued at approximately $13 billion, ranking it as the sixth-largest holding in Berkshire's portfolio [5]. Group 2: Reasons for Investment - Buffett has expressed admiration for Occidental's CEO, Vicki Hollub, particularly her expertise in oil and her focus on carbon capture and storage technology [6]. - In his 2024 shareholder letter, Buffett highlighted the importance of Hollub's skills in oil extraction and the company's vast U.S. oil and gas holdings, as well as its leadership in carbon capture initiatives [7]. Group 3: Future Outlook - Berkshire is likely to maintain and possibly increase its stake in Occidental, with Buffett indicating plans to hold the stock indefinitely [8]. - Berkshire has regulatory approval to acquire up to 50% of Occidental, currently holding 28.2%, and may approach this threshold in the coming years [9]. - The stock trades at a forward earnings multiple of 12.6, below the S&P 500 energy sector average, suggesting potential for significant long-term growth if carbon capture goals are met [10].

Group 1 - Occidental Petroleum is a significant player in the Permian oil sector with a market capitalization of nearly $50 billion [2] - The company's share price has experienced a decline over recent years due to weak and volatile oil prices [2] - The current Brent crude oil prices have been a contributing factor to the company's stock performance [2] Group 2 - The Value Portfolio employs a fact-based research strategy to identify investment opportunities, including thorough analysis of 10Ks, analyst commentary, market reports, and investor presentations [2] - The investment approach includes real monetary investments in the recommended stocks [2]

Core Viewpoint - Occidental Petroleum Corporation (OXY) reported better-than-expected fourth-quarter 2024 earnings per share, surpassing the Zacks Consensus Estimate by 19.4% due to strong performance across its segments and production volumes from U.S. assets [1][2]. Financial Performance - The total production volume for the fourth quarter was 1,463 thousand barrels of oil equivalent per day (Mboe/d), which was near the upper end of the company's guidance of 1,430-1,470 Mboe/d, reflecting a 19.7% increase from the previous year [4]. - The average earnings surprise over the last four quarters was 23.56%, with reported earnings of $0.80 for Q4 2024, exceeding the estimate of $0.67 by $0.13 [3][2]. Production and Operations - Production from the Permian region and Rockies & Other Domestic volumes contributed significantly, with Rockies & Other Domestic average daily production at 325 Mboe/d, up 14% year over year [5]. - Occidental plans to bring online 500-550 company-operated wells in the Permian region and 100-120 wells in the Rockies region in 2025, which is expected to further boost domestic onshore production [10]. Dividend and Share Repurchase - The company raised its quarterly dividend rate by 9% to 24 cents per quarter, with the new dividend payable on April 15, 2025 [6]. - Occidental has nearly $1.2 billion remaining under its share repurchase program, which was authorized in 2023, with a maximum limit of $3 billion [6]. Price Realization - Realized prices of crude oil decreased by 11.6% year over year to $69.73 per barrel, while realized natural gas liquids prices increased by 4.15% to $21.80 per barrel [7]. Future Earnings Estimates - The Zacks Consensus Estimate for Occidental's 2025 and 2026 earnings per share has increased by 8.9% and 2.4%, respectively, in the past 60 days [8]. Strategic Initiatives - Occidental completed the acquisition of CrownRock L.P., which is expected to enhance production volumes and lower well costs, with production from CrownRock expected to reach 170,000 Boe per day [11]. - The company is also expanding internationally, having entered a new 25-year production-sharing agreement with Sonatrach in Algeria, with expected production in the range of 226-236 Mboe/d in 2025 [13]. Competitive Position - Occidental is recognized as a low-cost operator with high-quality assets, which provides a competitive advantage over peers [12].