A new CEO takes over a company one-third owned by Warren Buffett. How big is the pressure?

The Permian Basin oil producer is going through a transformative year. Debt from the large 2019 acquisition is falling faster than the market expected, the chemical division was bought directly by Warren Buffett, and after ten years, long-time CEO Vicki Hollub is departing. She is succeeded by long-time COO Richard Jackson, who takes over a company with quality assets but also persistent sensitivity to oil prices. What does this combination mean for the future value of the stock?

Occidental Petroleum $OXY is going through one of the most remarkable periods in its modern history. After being weighed down by debt for years following the Anadarko Petroleum acquisition in 2019, the company is now demonstrating real debt repayment and solid free cash flow generation. On top of that, two events are reshaping its investment story. The first is the sale of the OxyChem chemical division directly to Warren Buffett and his conglomerate Berkshire Hathaway $BRK-B, and the second is the departure of long-time CEO Vicki Hollub, replaced by Richard Jackson. For readers tracking the energy sector, Occidental is appealing precisely because of its combination of quality Permian Basin assets, visible debt reduction, and the presence of one of the world’s most-watched investors in its shareholder base. The question remains whether this mix is enough for the stock to overcome years of underperformance relative to peers.

Permian Basin as the core business

Occidental is one of the largest oil producers in the U.S. Permian Basin, which consistently accounts for more than 45% of total U.S. oil output. The company operates there through two segments: Permian Resources, focused on unconventional drilling, and Permian EOR, which uses tertiary recovery methods involving CO2 injection to boost recovery rates.

It is the EOR segment that makes Occidental a technology leader, as it runs dozens of active CO2 floods and has over fifty years of experience with a technique that can increase ultimate recovery by tens of percentage points. According to Buckhead Energy, Occidental operates more wells in the Permian than ExxonMobil $XOM—over 59,000 versus just under 38,000—reflecting the two companies' different strategies.

While Exxon, after its Pioneer Natural Resources acquisition, bets on vast contiguous acreage with higher per-well productivity, Occidental relies on a denser network of smaller wells combined with long-term secondary and tertiary projects.