Occidental Petroleum: Between the Oil Business and a CO₂ Strategy
Occidental Petroleum exceeded market expectations in the second quarter. Adjusted earnings per share came in at USD 2.40, USD 0.55 above analyst estimates. Revenue rose to USD 8.32 billion, a 57% increase from the previous year. Global production reached 1.433 million barrels of oil equivalent per day. The main drivers of this performance are the Permian Basin and the Gulf of Mexico. Operating cash flow totaled USD 5.1 billion. However, a realized gas price of minus USD 1.48 per MCF weighed on the gas business.
Debt reduction is currently the top priority. Occidental reduced its total debt by USD 1.5 billion to USD 11.8 billion in the last quarter. Net debt stands at approximately USD 7.6 billion. Before management considers share buybacks, debt is to be reduced to below USD 10 billion. However, the quarterly dividend was raised by 8% to USD 0.28 per share. Capital expenditures of USD 5.9 billion are planned for 2027, with production remaining stable. The goals for 2030 are ambitious. The company aims to generate an additional USD 4 billion in annual cash flow, with approximately 85% of that generated even at lower oil prices.
Occidental is pursuing carbon capture, utilization, and storage (CCUS) as a strategic complement to its production business. Its subsidiary, 1PointFive, is developing the STRATOS direct-air-capture project in Texas, which is expected to reach a capacity of up to 500,000 metric tons of CO₂ per year. Class VI permits for underground storage have been in place since April 2025. The division is still too small to be reported as a separate segment in the quarterly report. Currently, oil prices, production costs, and debt dominate the company’s valuation. In the long term, the CO₂ strategy has potential, but this must be demonstrated in the coming years.
Zefiro Methane: Tapping Into the Billion-Dollar Well Remediation Market
The hype surrounding AI data centers is driving the expansion of power grids and new energy infrastructure. This requires large tracts of land, which is challenging in the US because millions of abandoned wells leak methane. This is where Zefiro Methane comes in. The Canadian company has dedicated itself to addressing this legacy issue by plugging abandoned and orphaned oil and gas wells. The recent partnership with the Well Done Foundation, which operates in 18 US states, secures Zefiro’s first step: the remediation of 10 wells at the Deep Fork Wildlife Refuge in Oklahoma. Subsequently, 20 additional methane leaks can be plugged next year. The local significance of this work is highlighted in the current cover story of the Bradford Era, which emphasizes the company’s efforts in Pennsylvania.
Zefiro has now expanded its operational presence to 13 US states and significantly increased its capacity through the acquisition of five additional drilling rigs from Viking Well Service. Three drilling rigs are currently in use for a major US natural gas producer to plug at least 26 abandoned wells in Pennsylvania, New York, West Virginia, and Kentucky. In addition, the company secured three new contracts from the state of Ohio totaling approximately USD 2.4 million. Furthermore, there is a three-year framework contract with the Ohio Department of Natural Resources worth USD 19.6 million. In the first 9 months of fiscal year 2025/26, Zefiro increased revenue by 35.8% to USD 33.19 million, while EBITDA was clearly in positive territory for the first time at USD 3.10 million.
The company’s true point of differentiation lies in two additional revenue streams. Zefiro Methane combines remediation expertise with precise methane measurement technology, thereby creating a verifiable data foundation for certified emission credits. The 15,000-foot-deep gas well in Custer County, Oklahoma, marked the world’s first reference case certified according to the American Carbon Registry standard. Analysts at GBC Research see significant potential with a price target of CAD 2.12 and rate the stock a “Buy”. Given the addressable billion-dollar market, supported by both Democrats and Republicans, and the company’s operational momentum, the current valuation of CAD 0.60 per share still appears moderate.
NextEra Energy: A Growth Pipeline but Regulatory Uncertainties
NextEra Energy has two main pillars. On the one hand, Florida Power & Light (FPL), one of the largest regulated electric utilities in the US with approximately six million customers; and on the other hand, NextEra Energy Resources (NEER), a project platform for renewable energy, storage, and energy infrastructure. FPL delivers stable earnings from the Sunshine State. NEER develops turnkey solutions for large-scale customers with wind, solar, and battery projects. This business segment primarily targets the rapidly growing demand from data centers and industrial parks. Here, the company draws on its own development expertise, gas infrastructure, and transmission grids.
In the first half of the year, adjusted earnings per share rose by 9.8%, and the project portfolio for renewable energy and energy storage grew to 35.1 gigawatts (GW). This shows that the expansion is paying off. Expiring power supply contracts were renewed at higher prices—on average, about USD 20 per megawatt-hour above previously achieved prices. This strengthens the margin. Further positive effects are coming from major projects, such as the contract award to supply Brookfield’s data center campus in Kentucky with up to 4.6 GW of power, as well as agreements for up to 10 GW of natural gas-fired power plants in Texas and Pennsylvania. These projects demonstrate the company’s ability to implement complex energy infrastructure for data-driven applications.
Opinions are divided on the planned merger with Dominion Energy. The transaction would position NextEra Energy in Virginia, North Carolina, and South Carolina. The data center market is growing particularly strongly in these US states. Management expects annual regulatory capital growth of about 11% following the merger. Earnings per share are projected to grow by about 9%. The downside is political headwinds. Virginia’s governor has announced that she will actively monitor the review process, which suggests potential conditions and longer proceedings. As an investor, one should closely track regulatory developments.
The energy sector is undergoing a transition from a fossil-fuel-based present to a green future. Occidental Petroleum impresses with strong operating figures but must first prove the long-term profitability of its CO₂ strategy. Zefiro Methane operates in a profitable niche business involving the remediation of orphaned wells and enjoys bipartisan support in the US. NextEra Energy is growing in the renewable energy sector but faces potential regulatory hurdles regarding the planned merger with Dominion.
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