New CEO Jackson Faces Immediate Test on Debt, Stock, and Berkshire Dividends

What happened

Occidental Petroleum's new CEO Richard Jackson, in his first month, is already challenged with lifting a lagging stock price, paying down more debt, and managing large dividend obligations to Berkshire Hathaway from the OxyChem sale. The company has made progress: debt reduced to $15B after the divestiture and 4Q25 production exceeded guidance at 1,481 Mboe/d. However, the stock trades at ~$53, below the attractive entry of $48 identified in our analysis, and buybacks have been absent. The key test is whether Jackson can sustain production near ~1.45 MMboe/d on lower capex ($5.5B-$5.9B) and shift cash flow from debt reduction to shareholder returns. If he delivers, a rerating toward $58-$65 is possible; if not, the stock may remain range-bound.

Implication

If Jackson successfully maintains production, reduces debt further, and restarts buybacks, the stock could re-rate to $58-$65. The balance-sheet de-risking thesis remains intact, but execution risk now sits with the new CEO.

Thesis delta

The core thesis shifts from passive balance-sheet improvement to active capital-return delivery under new CEO Jackson. The direction is unchanged, but the speed and credibility of shareholder returns become the critical variable. Jackson must prove he can convert efficiency gains into buybacks; if he fails, the rerating narrative stalls.