Occidental's Q4 Earnings Beat Estimates: Time to Buy the Stock?

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$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].