Occidental reported third-quarter 2026 net income of $1.6 billion, or $1.61 per diluted share, and adjusted earnings of $2.0 billion, or $1.91 per share from continuing operations. The quarter also marked a debt-reduction milestone: principal debt reached $10.0 billion as the company continued paying down borrowings.
Cash generation and production were strong, while results in oil and gas and midstream and marketing reflected different pressures. Lower realized crude prices weighed on oil and gas income; narrower gas-market spreads and the timing of crude sales cut reported midstream and marketing income from the prior quarter.
Key details
- Earnings: Occidental’s adjusted earnings were higher than reported net income, mainly because of losses on derivatives. Reported EPS was $1.61, compared with adjusted EPS of $1.91 from continuing operations.
- Debt reduction: Principal debt stood at $10.0 billion after a $1.8 billion reduction. Occidental said it had retired $10.4 billion of debt since the start of 2026.
- Cash flow and spending: The company generated $4.1 billion in operating cash flow from continuing operations and $2.8 billion in free cash flow before working-capital changes. Capital expenditures were $1.3 billion.
- Production: Global production averaged 1.427 million barrels of oil equivalent per day, above the midpoint of company guidance. Strong performance in the Permian and Rockies offset temporary production curtailments at some Gulf of America facilities, caused by a third-party gas-pipeline constraint and maintenance.
- Oil and gas: Pre-tax income was $2.6 billion, down from $2.8 billion in the second quarter. Excluding items affecting comparability, the decline was mainly due to lower realized crude prices, partly offset by higher domestic natural gas prices.
- Average realized crude prices fell 11% from the prior quarter to $85.91 per barrel.
- Domestic realized natural gas prices rose to $1.61 per thousand cubic feet, from negative $1.48 in the second quarter. Natural gas liquids prices were flat at $24.63 per barrel.
- Midstream and marketing: Reported pre-tax income was $55 million, compared with $1.3 billion in the second quarter. The sequential decline reflected narrower Waha-to-Gulf Coast gas spreads and lower crude margins related to the timing of sales. Higher sulfur volumes and prices at Al Hosn partly offset those pressures. Excluding items affecting comparability, results were above the high end of guidance. Income from Occidental’s WES equity-method investment was $121 million.
- Longer-term plan: Chief Executive Richard Jackson said Occidental is pursuing more than $4.0 billion in additional annual sustainable cash flow by 2030. The company said a stronger balance sheet provides a path to accelerate capital returns, but it did not announce a specific new return in these results.
What changes for investors: The debt milestone reflects continued balance-sheet repair, while the quarter’s cash flow and free cash flow show substantial cash generation alongside $1.3 billion of capital spending. The earnings gap between reported and adjusted results was mainly attributable to derivative losses; operating trends varied by business, with lower crude realizations pressuring oil and gas income and narrower market spreads weighing on midstream and marketing.