S&P boosts Occidental Petroluem

S&P said it boosted its ratings on Occidental Petroleum Corp. (OXY) and its debt to BB+ from BB. The recovery rating on the unsecured debt remains 3 (50%-70% recovery: estimate 60%).

“The company continued to repair its balance sheet by repaying more than $6 billion of debt principal in 2021, and we expect absolute debt reduction will continue be a top priority for management in 2022 and beyond. OXY has also benefited from rising oil and gas prices as strong supply/demand fundamentals and heightened geopolitical risk have had a favorable impact on its leverage metrics,” the agency said in a press release.

S&P said it projects average funds from operations to debt of 25%-30% along with debt to EBITDA in the range of 2.5X-3x over the next two years.

The outlook is stable.

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