Occidental Petroleum posted a net loss of $68 million, or $0.07 per diluted share, for the fourth quarter of 2025, compared with adjusted earnings of $315 million, or $0.31 per share. The gap between GAAP and adjusted results was primarily due to charges tied to the divestiture of its chemical unit, OxyChem, which officially closed on January 2, 2026.
The overall loss did little to obscure what management characterized as a quarter of superior operating performance and balance sheet repair. Proceeds from the OxyChem sale allowed Occidental to reduce debt by $5.8 billion since mid-December, reducing total senior debt to $15 billion, a key milestone in its post-Anadarko deleveraging strategy.
In a further sign of financial stabilization, the company increased its quarterly dividend by more than 8% to $0.26 per share, payable on April 15. The increase marks a doubling of the dividend over the past four years, underscoring management’s shift toward shareholder returns after years focused on debt reduction.
Operationally, Occidental exceeded the upper limit of its production guidance. Fourth-quarter production averaged 1.481 million barrels of oil equivalent per day (Mboe), 21 Mboe above the midpoint of guidance, driven primarily by strength in the Permian Basin and Rocky Mountains. The Gulf of America and international volumes met expectations.
Still, earnings came under pressure from weaker commodity prices. The average prices of WTI and Brent during the quarter were $59.14 and $63.09 per barrel, respectively. Realized crude oil prices fell 9% quarter-over-quarter to $59.22 per barrel, while domestic gas prices fell 24% to $1.12 per Mcf. The weaker pricing environment caused pretax oil and gas revenue to fall to $700 million from $1.3 billion in the third quarter.
Midstream and marketing provided a bright spot. The segment generated $204 million in pretax income, up sharply from $81 million in the prior quarter and above the high end of guidance. The gains were driven by improved gas transportation margins in the Permian, lower crude oil transportation costs and higher sulfur prices at Al Hosn. These gains were partially offset by lower capital inflows from Western Midstream Partners.
Cash flow indicators remained resilient despite falling prices. Occidental generated $2.6 billion in operating cash flow and $2.7 billion before working capital adjustments. Capital spending totaled $1.8 billion, resulting in quarterly free cash flow before working capital of $1 billion.
On the reserves front, Occidental closed 2025 with 4.6 billion barrels of oil equivalent in proven reserves. The company reported a total reserve replacement rate of 98% and an organic rate of 107%, reflecting continued resource additions in the Permian and DJ basins. Over a three-year period, the total replacement rate averaged a solid 154%.