Can Rising Reserves Continue to Fuel OXY Stock's Long-Term Growth?

Occidental Petroleum Corporation OXY is strategically positioned to benefit from its expanding oil and gas reserves, which are critical to supporting long-term production growth and value creation. As global demand for energy remains resilient amid economic and population growth, Occidental’s growing resource base ensures sustained output capacity and a competitive edge in the upstream market.

The company’s reserve additions through successful exploration, improved recovery techniques and strategic acquisitions, particularly in the prolific Permian Basin, strengthen its asset portfolio. These low-cost, high-yield reserves enhance Occidental’s ability to generate free cash flows across varying commodity price cycles, reinforcing its capital discipline and shareholder return framework.

Occidental ended 2024 with a proved reserve of 4.6 billion barrels of oil equivalent (BOE) compared with 3.98 billion BOE at the end of 2023. The increase was primarily due to the addition of new domestic oil, gas and NGL reserves.

Rising reserves also improve Occidental’s operational flexibility. With a robust inventory of drilling locations and longer reserve life, the company can efficiently allocate capital across high-return projects, adapt to market dynamics and maintain stable production over the long term. This supports predictable earnings and bolsters investor confidence.

Increased reserves provide the foundation for sustained carbon management initiatives. With large-scale operations, Occidental is better positioned to align with energy transition goals. The dual strategy of production growth and decarbonization strengthens Occidental’s long-term investment appeal in a carbon-conscious world.

How Rising Reserves Volumes Aid Oil & Energy Companies?

Growing oil and gas reserves strengthen energy companies by boosting production capacity, increasing asset value and ensuring steady cash flow. They also enhance operational flexibility and investor appeal, helping firms remain resilient amid fluctuating prices and evolving global energy demand.

Firms like Chevron CVX and ConocoPhillips COP benefit significantly from rising oil and gas reserves by ensuring long-term production growth and enhancing asset value. Chevron’s expanding reserves in the Permian Basin support sustained output and cash flow, while ConocoPhillips leverages its global resource base to maintain capital efficiency, strengthen operational resilience and deliver stable returns across commodity price cycles.

OXY’s Price Performance

Occidental’s shares have gained 10.6% in the past three months against the Zacks Oil and Gas-Integrated-United States industry’s decline of 5.8%.

OXY’s Earnings Surprise

Courtesy of its stable performance, the company delivered an average earnings surprise of 24.34% in the past four quarters.

Occidental’s ROE Is Lower Than the Industry

Occidental’s return on equity ("ROE") is lower than the industry average in the trailing 12 months. ROE of OXY was 16.6% compared with the industry average of 16.89%.

OXY’s Zacks Rank

Occidental currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

 

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This article originally published on Zacks Investment Research (zacks.com).

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