Oxy's second-quarter results, released Wednesday, were largely as expected -- which counts as good in this environment (ExxonMobil, for example, missed the consensus earnings forecast by 36 percent, according to data compiled by Bloomberg).
But the more encouraging figures concern two big bugbears in the sector: free cash flow and leverage.
All the oil majors are effectively having to borrow or sell assets to cover dividend payments. But even factoring these in, Oxy is showing some improvement in the past 12 months.
Oxy, like all the majors, has cut back sharply on capital expenditure. Yet it expects to raise production this year toward the top end of its guidance range of 4 to 6 percent, an enviable pace at this scale. Oxy is also aggressively streamlining its portfolio, selling about $1.2 billion of assets over the past year -- which helps to keep debt in check.
Despite its smaller scale, Oxy looks able to ride out further weakness in the oil market -- and because of its smaller scale and growth potential, it offers more upside than its compatriots if oil prices recover. And with a comparable dividend yield, it looks pretty competitive on that front, too.
This column does not necessarily reflect the opinion of Bloomberg LP and its owners.
Occidental's market capitalization is about $56 billion versus ExxonMobil at $361 billion and Chevron at $188 billion.
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