A major oil and gas producer headquartered in Houston, Occidental (nicknamed "Oxy") drills for crude and natural gas across the Permian Basin and beyond, and is building large-scale carbon-capture projects through its 1PointFive arm. It was founded in 1920 in Los Angeles, nearly collapsed, then was revived in the 1950s when businessman Armand Hammer struck oil in two wells and took control. Its name comes from the Latin word for "west," and the "Oxy" nickname traces to its 1964 stock ticker symbol.
Occidental's Q2 net income rose to $3.0B as oil prices climbed to $96.78/bbl and midstream swung to a $1.3B profit.
Oil prices rebounded and the midstream delivered a $1.3 billion swing to profit. rose 53% to $8.1 billion and reached $3.9 billion, driven by a increase in average worldwide realized oil prices to $96.78 per barrel and a $1.4 billion sequential improvement in midstream and marketing results. The company used sale proceeds to repay $8.6 billion in debt, leaving at $13.5 billion.
Key takeaways
Oil and gas earnings rose to $2.8 billion from $1.0 billion in Q1 2026, as average worldwide realized crude oil prices increased to $96.78 per barrel from $69.91 per barrel.
Midstream and marketing swung to a $1.3 billion profit from an $87 million loss in the prior quarter, driven by crude marketing timing effects and optimization of natural gas transportation capacity in the .
rose 53.4% to $8.1 billion, while widened to 48.5% from 10.7% a year earlier, reflecting the higher commodity prices and midstream gains.
Section summaries
Management's Discussion and Analysis
Q2 FY2026 net income rose sharply on higher oil prices and midstream margins, while OxyChem sale proceeds drove $8.6B in debt repayment.
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Oil and gas earnings surged to $2.8B in Q2 from $1.0B in Q1, driven by higher realized crude and NGL prices, partially offset by lower domestic natural gas realizations.
fell to $108 million from $432 million in Q1 2026, as the company applied $9.5 billion in sale proceeds and operating cash to repay $8.6 billion in debt during the quarter.
fell to $13.5 billion from $15.2 billion at the end of Q1 2026, and cash and equivalents rose to $4.2 billion, with an undrawn $4.2 billion available.
Domestic natural gas realizations turned negative at -$1.48 per Mcf, partially offsetting the benefit of higher oil and NGL prices in the oil and gas .
What changed
The Q1 2026 watch item on crude oil derivative losses was resolved: the Q2 filing reports no comparable derivative loss, and the midstream 's $1.3 billion profit was partly attributed to crude marketing timing effects, suggesting the positions that weighed on Q1 did not repeat.
The trajectory of reversed: after falling to $1.3 billion in Q1 2026 due to a build, operating cash flow rose to $4.3 billion in Q2, up 233% sequentially.
Debt reduction accelerated past the ~$14.3 billion target flagged for resuming share repurchases: fell to $13.5 billion, down from $15.2 billion in Q1 2026 and $20.6 billion at year-end 2025.
The sale closed and proceeds were applied: the $9.5 billion in proceeds flagged in prior filings were used to repay $8.6 billion in debt during the quarter, resolving the March 30, 2026 deadline watch item.
What to watch
Q3 2026 realized crude oil prices against the Q2 level of $96.78/bbl, given the ~$240M pre-tax cash sensitivity per $1/bbl WTI change noted in the 2025 10-K.
Whether the company announces a program now that at $13.5 billion has fallen below the ~$14.3 billion target management previously set for resuming buybacks.
Sustainability of the midstream and marketing 's $1.3 billion profit, which the filing attributes partly to crude marketing timing effects that may not repeat.
Resolution of the IRS Tronox challenge and any repayment of up to $2.3 billion in tax refunds and interest tied to the Anadarko deduction.
Midstream and marketing swung to a $1.3B profit from an $87M loss, boosted by crude marketing timing effects and natural gas transportation capacity optimization in the Permian.
Consolidated rose to $8.1B from $5.2B sequentially, reflecting higher crude prices and marketing margins, while fell sharply to $108M from $432M due to debt reduction.
The company used $9.5B in sale proceeds and operating cash to repay $8.6B in debt, leaving $4.2B in cash and an undrawn $4.2B .
Average worldwide realized oil prices jumped to $96.78/bbl from $69.91/bbl, while domestic natural gas realizations turned negative at -$1.48/Mcf due to weak pricing.
were $3.1B for the first half of 2026, slightly below the prior year's $3.4B, with the majority directed to the oil and gas .
Quantitative and Qualitative Disclosures About Market Risk
For the six months ended June 30, 2026, there were no material changes in the information required to be provided under Item 305 of Regulation S-K included under Item 7A, Quantitative and Qualitative Disclosures About Market Risk in the 2025 Form 10-K.
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For the six months ended June 30, 2026, there were no material changes in the information required to be provided under Item 305 of Regulation S-K included under Item 7A, Quantitative and Qualitative Disclosures About Market Risk in the 2025 Form 10-K.
The Company has elected to use a $1 million threshold for disclosing certain proceedings arising under federal, state or local environmental laws when a governmental authority is a party and potential monetary sanctions are involved. For additional information regarding legal pr…
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The Company has elected to use a $1 million threshold for disclosing certain proceedings arising under federal, state or local environmental laws when a governmental authority is a party and potential monetary sanctions are involved. For additional information regarding legal proceedings, see Note 8 - Lawsuits, Claims, Commitments and Contingencies in the Notes to Consolidated Condensed Financial Statements in Part I, Item 1 of this Form 10-Q.