Core Viewpoint - Occidental Petroleum's stock has declined below $50, presenting a potential buying opportunity due to various catalysts for growth and improvement in cash flow unrelated to oil prices [1][12]. Group 1: Stock Performance and Investment Interest - Occidental Petroleum's shares have fallen from over $60 to below $50, primarily due to a decrease in oil prices from over $80 to just above $70 per barrel [1]. - Warren Buffett's Berkshire Hathaway owns over 264.9 million shares of Occidental, valued at more than $12.6 billion, making it the sixth-largest position in Berkshire's portfolio [3]. - Berkshire's cost basis for its Occidental shares is in the low $50s, and the company has taken advantage of price dips to increase its holdings [4]. Group 2: Future Cash Flow Improvements - Occidental expects a $1.5 billion improvement in free cash flow over the next few years, driven by non-oil business segments [6]. - The chemical business (OxyChem) is projected to contribute over $450 million in incremental free cash flow by 2026 due to expansion projects [7]. - The midstream business is anticipated to generate an additional $450 million in earnings as legacy contracts expire and capital spending decreases [8]. Group 3: Debt Repayment and Shareholder Value - Occidental's debt repayment strategy is expected to save over $135 million in annual interest expenses by 2026 [8]. - The anticipated increase in free cash flow will enable the company to enhance shareholder value through dividend increases, share repurchases, and further debt repayment [9]. Group 4: Additional Growth Catalysts - There is potential for higher oil prices due to geopolitical conflicts or unexpected supply issues, which could further benefit Occidental [10]. - The company is developing a carbon capture and storage business, with its first direct air capture unit expected to be operational by mid-2026, which could significantly enhance long-term growth prospects [11].

Core Viewpoint - Occidental Petroleum is positioning itself as a leader in the decarbonization movement while diversifying its revenue streams to mitigate oil price volatility [2][3]. Group 1: Carbon Capture Initiatives - Occidental's carbon capture ambitions began in 2019 through a partnership with Carbon Engineering, supported by Bill Gates [2]. - The company plans to invest up to $1 billion in its first large-scale direct air capture (DAC) plant, STRATOS, located in Texas's Permian Basin [2][3]. - In 2023, Occidental acquired Carbon Engineering for $1.1 billion, securing DAC technology ownership [3]. Group 2: 1PointFive Subsidiary - Occidental formed a subsidiary, 1PointFive, to pre-sell carbon credits, aiming to limit global temperature rise to 1.5 degrees Celsius by 2050 [4]. - 1PointFive has already secured a deal with Airbus to sell 400,000 tonnes of carbon dioxide removal credits after STRATOS launches [4]. Group 3: STRATOS Plant and Future Plans - STRATOS is set to launch in mid-2025 with an annual capacity of 500,000 tons, requiring significant infrastructure [5]. - The carbon credits generated can be valued between $500 to $1,100 per metric ton, providing various monetization options [6]. Group 4: Revenue Potential and Partnerships - 1PointFive has struck significant carbon credit deals, including a 10-year agreement with Amazon for 250,000 metric tons [7]. - A deal with Microsoft for 500,000 metric tons over six years could generate between $250 million and $500 million, depending on the price per ton [8]. - If Occidental successfully opens 100 more DAC plants by 2035, the revenue potential could reach billions [8].

Group 1: Company Overview - Occidental Petroleum is experiencing stock price fluctuations, with shares near 52-week lows as crude oil prices have dropped over 11% since the start of 2025 [1] - Berkshire Hathaway has increased its stake in Occidental to $29 billion, making it the largest shareholder with over 28% ownership [3][4] - The company has a current stock price of $47.22, with a dividend yield of 2.03% and a P/E ratio of 19.36 [3] Group 2: Recent Acquisitions and Financials - Occidental completed a $12 billion acquisition of CrownRock, increasing its domestic well inventory from 50% to 80% and adding 1,700 new well locations [5][6] - The acquisition resulted in an additional production of 170,000 barrels of oil per day, although it also incurred $9.1 billion in new debt [6] - The company has improved its average well breakeven costs by 6% and reduced drilling and completion costs by 12% compared to 2023 levels [12] Group 3: Carbon Capture Initiatives - Occidental is a leader in carbon capture, with a $1.1 billion acquisition of Carbon Engineering, which supports its Stratos Direct Air Capture plant [7][8] - The company plans to establish 100 additional DAC plants by 2035, generating revenue through the sale of carbon credits [9][10] - Occidental has a carbon credit deal with Microsoft, further enhancing its revenue potential from carbon capture initiatives [11]