Core Insights - Occidental Petroleum has completed its largest divestment by selling its chemical unit OxyChem to Berkshire Hathaway for $9.7 billion, marking a significant step in its strategy to reduce debt [1] - The company plans to allocate $6.5 billion of the proceeds towards debt reduction, bringing its principal debt below the $15 billion target set after the $12 billion CrownRock acquisition [2] - The sale enhances Berkshire Hathaway's position as the largest shareholder in Occidental, now holding a 27% equity stake, while Occidental focuses on its core oil and gas production, which accounted for 75% of its 2024 earnings [3] Company Overview - Occidental Petroleum Corporation is valued at $43 billion and operates globally in the energy sector, with activities in the U.S., Middle East, and North Africa, focusing on oil and gas, chemicals, and midstream segments [4] - The company is also investing in low-carbon ventures, combining traditional energy production with carbon management for sustainable growth [4] Market Performance - Following the announcement of the divestment, Occidental's shares fell over 6%, reflecting investor caution regarding the deal, with the stock experiencing a 10% decline year-to-date as of early October 2025 [5] - The broader energy sector is facing challenges, with oil prices dropping to four-month lows due to oversupply concerns [5] Valuation Metrics - Occidental's forward P/E ratio stands at 20, significantly above the sector median of 13, indicating potential overvaluation compared to peers [6] - However, its price-to-cash-flow ratio of 4 is lower than the sector's 5, suggesting some level of undervaluation [6]