Credit Suisse Raises Price Target On Occidental Petroleum On Good Market Position

In a report published Friday, Credit Suisse analyst Edward Westlake reiterated a Neutral rating on

, and raised the price target from $76.00 to $78.00. In the report, Credit Suisse noted, “OXY is well positioned for this down-turn with $1bn of net cash on the balance sheet. The industry, OXY included, is drilling some very strong wells in the Southern Delaware and the Northern Midland. OXY is biding its time, and occasionally bidding for properties, e.g. the purchase of 100k net acres in the Permian. OXY believe that cashflow will cover the 3.7% dividend at around $60/bbl as capex falls over the course of 2015 and are retaining the options to increase spend if/when oil prices rise. The 33% cut to capex spend looks prudent, is focused on weaker areas of the OXY investment program (Bakken, gas, vertical Permian wells) and there is limited impact on the Permian Hz program. Some of the capex reduction is due to an improving cash cycle now that the Al Hosn project is onstream. We raise our TP to $78 and revise estimates.” Occidental Petroleum closed on Thursday at $78.31.