Occidental's Oil Realizations Reverse After a 38% Jump
Worldwide realized crude fell to $85.91 a barrel in the third quarter as Gulf of America output was curtailed.
Occidental Petroleum (OXY) posted average worldwide realized crude oil prices of $85.91 a barrel in the three months ended September 30, 2026, reversing the 38% sequential increase recorded in the second quarter.
The international energy company said total company production for the third quarter was within its guidance range and included temporary Gulf of America downtime. In September, it curtailed output at certain Gulf of America facilities because of a third-party gas pipeline constraint and maintenance activities. Production has been partially restored, with remaining impacted volumes expected to return as the pipeline constraint is resolved.
The company estimated 110 thousand barrels of oil equivalent per day of Gulf of America net sales volumes for the quarter and domestic lease operating costs of $8.54 a barrel of oil equivalent. Oil accounted for 48.8% of total company production.
WTI averaged $85.79 a barrel and Brent $91.62 a barrel, down from $92.79 and $97.06 in the prior quarter. Worldwide oil realized prices equaled 100% of WTI and 94% of Brent, compared with 104% and 100% in the second quarter. United States oil realized $85.93 a barrel and international oil $85.80 a barrel.
Average domestic realized natural gas prices turned positive at $1.61 per thousand cubic feet, from negative $1.48 a Mcf in the second quarter. Domestic gas equaled 54% of the NYMEX index, which averaged $2.97 a Mcf. International natural gas realized $2.00 a Mcf.
Worldwide realized NGL prices were essentially unchanged at $24.63 a barrel. United States NGLs realized $24.10 a barrel and international NGLs $29.11 a barrel.
Crude oil collar settlements negatively impacted operating cash flow before working capital by $94 million, compared with a $156 million negative impact in the second quarter. Average diluted shares outstanding were 1,012.8 million.
A quarter earlier, Occidental had produced 1,433 Mboed globally, exceeding the high end of guidance, with the Permian and Gulf of America units outperforming. Second-quarter worldwide realized crude had been $96.78 a barrel, and the company had reported EPS of $2.75 and adjusted EPS from continuing operations of $2.40. Pre-tax income from oil and gas was $2.8 billion, and midstream and marketing pre-tax income was $1.3 billion.
The company had increased its quarterly dividend by an additional 8% this year to $0.28 a share, payable October 15, 2026, and reduced principal debt by $1.9 billion to $11.8 billion, advancing toward a $10.0 billion milestone. It generated $5.1 billion of operating cash flow from continuing operations and $4.6 billion of operating cash flow before working capital, and delivered $3.0 billion of free cash flow before working capital from continuing operations with capital expenditures of $1.6 billion.
President and Chief Executive Officer Richard Jackson said the second-quarter results demonstrated the strength of Oxy's resources and that the company remained focused on executing from a strong balance sheet, organically improving resources and delivering cost efficiencies. He said the company expects to generate significant free cash flow growth by 2030.
Occidental is an international energy company that produces, markets and transports oil and natural gas. Headquartered in Houston, it primarily operates in the United States, the Middle East and North Africa.
The third-quarter earnings considerations were preliminary and subject to finalization of Occidental's financial reporting process. The company said the summary was not an estimate of third-quarter earnings and may not account for all adjustments and charges required to fully reflect changes in industry conditions.
Management attributed the September curtailment to the third-party gas pipeline constraint and maintenance, and said remaining impacted production is expected to return as that constraint is resolved. Oil's 48.8% share of total company production and the 110 Mboed Gulf of America net sales volume estimate frame the scale of the affected volumes within the quarter's production mix.
WTI and Brent index averages of $85.79 and $91.62 a barrel sit below the second-quarter markers of $92.79 and $97.06. Worldwide oil as a percentage of WTI at 100% and as a percentage of Brent at 94% sit below the prior quarter's 104% and 100%. United States oil realized $85.93 a barrel and international oil $85.80 a barrel.
Domestic natural gas realized $1.61 a Mcf, or 54% of the $2.97 NYMEX average, after negative $1.48 a Mcf in the second quarter. International natural gas realized $2.00 a Mcf. Worldwide NGLs were $24.63 a barrel, with United States NGLs at $24.10 and international NGLs at $29.11.
Collar settlements reduced operating cash flow before working capital by $94 million, after a $156 million negative impact in the second quarter. Average diluted shares outstanding were 1,012.8 million.
The company expects remaining Gulf of America production to return as the third-party gas pipeline constraint is resolved.