In the competitive landscape of the oil and gas sector, ConocoPhillips is emerging as a strong contender, particularly when compared to Occidental Petroleum. Occidental, a well-known player in the energy market, has garnered attention not only for its operational reach in the U.S., the Middle East, and North Africa but also due to its significant backing from Berkshire Hathaway. The investment firm holds approximately 265 million shares of Occidental, representing 27% of its outstanding shares, with a market value of $10.5 billion, making it one of Warren Buffett’s notable positions.
Nonetheless, Occidental has faced challenges as it has accumulated substantial debt following strategic acquisitions, including Anadarko Petroleum in 2019 and CrownRock in 2024. Efforts to repay this debt have been a focal point for the company, leading to the recent decision to sell its chemicals subsidiary, OxyChem, to Berkshire Hathaway for $9.7 billion. This move aims to reduce Occidental’s principal debt balance below $15 billion, potentially clearing a path for enhanced shareholder value through the development of its extensive drilling inventory.
As of now, Occidental’s stock sits at approximately $39.62, marking a slight decline of 0.28%. Its market capitalization stands at $39 billion, with a 52-week range between $34.78 and $53.20, and a dividend yield of 2.42%.
In contrast, ConocoPhillips has been proactive in establishing a robust growth strategy. The company has expanded its operations through acquisitions, such as its purchases of Concho Resources in 2020 and Marathon Oil last year, primarily funded by equity rather than debt. This prudent financial maneuvering has resulted in a strong balance sheet, granting ConocoPhillips the flexibility to invest significantly in future growth.
Currently trading at around $91.86 after a slight decrease of 0.40%, ConocoPhillips has a market capitalization of $114 billion. Its 52-week stock range fluctuates between $79.88 and $106.20, and it boasts a dividend yield of 3.46%. The company is set to invest $3.4 billion in three liquefied natural gas (LNG) projects in the U.S. and Qatar, along with $8.5 billion to $9 billion for the Willow oil project in Alaska. These ventures are projected to yield an additional $6 billion in annual free cash flow by 2029, assuming stable oil prices. This expected increase in cash flow positions ConocoPhillips to grow dividends significantly and execute share repurchases, potentially enhancing total returns for shareholders.
With a clearly defined strategy in place, ConocoPhillips is poised to leverage its investments to drive shareholder value, in stark contrast to the more ambiguous plans laid out by Occidental Petroleum. By aligning growth initiatives with financial stability, ConocoPhillips is set to make notable strides in the sector.
