Occidental Petroleum Stock Is Rising. Here’s Why.

Occidental Petroleum is aiming to decrease its debt tied to acquisitions in 2019 and 2023. (Callaghan O’Hare/Bloomberg)

Key Points

• Occidental Petroleum’s shares rise on a report of a potential $10 billion sale of its OxyChem unit.
• The potential sale aligns with Occidental’s strategy to reduce debt from its 2019 Anadarko and recent CrownRock acquisitions.
• Occidental aims to lower its principal debt below $15 billion, having repaid approximately $7.5 billion since July 2024.

Shares of Occidental Petroleum gained on Monday following a report the oil and gas producer was in talks to sell its chemical business for at least $10 billion.

Occidental is working with advisors for a potential sale, and the company is expected to announce a deal for its OxyChem unit in the coming weeks, the Financial Times reported, citing people familiar with the matter. Shares rose 12% to $48.40. The benchmark S&P 500 index was up 0.2%.

The news came amid ongoing efforts to repay debt tied to Occidental’s $55 billion acquisition of Anadarko Petroleum in 2019 and, more recently, its $13 billion acquisition of CrownRock, which was completed last year. Since announcing the CrownRock deal in 2023, Occidental has raised around $4 billion from divestitures.

The company reaffirmed in its latest quarterly report with the Securities and Exchange Commission that it aims to “prioritize excess cash flow and proceeds from asset divestitures for deleveraging until principal debt is below $15 billion.” Long-term debt stood at $23.3 billion as of June 30. The company noted that it has repaid around $7.5 billion in debt since July 2024.

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com