Are OXY oil reserves are still valued at about $60 per barrel?

Safety-International · 2026-04-03T03:52:30+00:00

=== SUMMARY === - The author argues that Occidental Petroleum (OXY) is severely undervalued, estimating it should trade at 3x to 7x its current price based on its oil reserves. - By calculating the implied value of OXY's 5 billion barrels of reserves against its enterprise value, the author deduces the market is pricing OXY as if oil will remain around $60 per barrel. - The author expects oil to stay above $90 for years due to geopolitical conflicts, making OXY's upside potential massive compared to its downside. - Quality assessment: Well-reasoned speculative DD with basic but logical back-of-the-napkin math to support a macro thesis. === SENTIMENT === BULLISH === TRADE IDEAS === OXY - LONG | confidence: 0.95 | sentiment: +0.90 Speaker: u/Safety-International Thesis: 1. THE FACT: OXY's current $62B market cap implies a profit of only ~$11/barrel on its 5 billion barrels of reserves, pricing oil at roughly $60/barrel. 2. THE BRIDGE: Oil is expected to stay above $90 due to ongoing geopolitical conflicts, meaning OXY will generate significantly more cash flow than currently priced in. 3. THE VERDICT: Go long OXY, as every $11 increase in crude above $60 theoretically adds another multiple to the company's intrinsic value. 4. RISKS: A sudden resolution to global conflicts causing oil prices to crash below $60, or unexpected increases in extraction costs. Timeframe: medium-term Key Points: - Market prices OXY reserves at $60/bbl - Author expects oil to stay $90+ for years - Potential 3x to 7x upside on share price - Berkshire Hathaway bought at $53 average - 80-85% of assets are in the safe US market XLE - LONG | confidence: 0.85 | sentiment: +0.80 Speaker: u/Safety-International Thesis: 1. THE FACT: The author is "all in on oil" and holds a basket of energy tickers including XOM, OXY, OIH, SM, and DVN. 2. THE BRIDGE: The market is not pricing in pessimistic geopolitical scenarios or escalations, creating a systemic undervaluation across the oil sector. 3. THE VERDI

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Summary

The author argues that Occidental Petroleum (OXY) is severely undervalued, estimating it should trade at 3x to 7x its current price based on its oil reserves.
By calculating the implied value of OXY's 5 billion barrels of reserves against its enterprise value, the author deduces the market is pricing OXY as if oil will remain around $60 per barrel.
The author expects oil to stay above $90 for years due to geopolitical conflicts, making OXY's upside potential massive compared to its downside.
Quality assessment: Well-reasoned speculative DD with basic but logical back-of-the-napkin math to support a macro thesis.

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TLDR: I believe OXY should be at least **3x its current share price**, in the scenario that oil stays elevated around 130 it should be roughly 7x current price. Peak price at the end of this bull cycle would be much higher in nominal terms.

I'm rounding numbers since all I care about is the ballpark and direction and this is just speculation, but I'm bothered that all the people on youtube seem to be just talking qualitatively. According to google the current cost to extract and transport for OXY is $38 per barrel, I am using $44 average (+15.6%) for my purpose since towards the end of reserve life cost may go up. 

OXY has about 20 billion non oil reserve asset, 15 billion in debt as of feb 2026 after selling its Oxychem branch to Berkshire. So you take its 62 billion market cap minus 5 billion, the remaining $57 billion valuation divided by its claimed reserves of oil equivalent and additional assets is at 5 billion barrels, which is assuming OXY can turn its reserves into \~$11/barrel profit.

OXY has majority of its assets in the US at about 80-85%, and the rest in the middle eastern region, some risk since it is a target for Iran but it is the smaller portion of assets, the majority of its production is done so at a cost well below other producers close to major consumer market, with relatively small geopolitical risk. 

Take $44+$11 = $55, throw in a few bucks safety factor for operational and geopolitical risks call it $60 bucks even. ***For every 11 dollar/barrel above $60 that crude is worth, this company should be worth another multiple.*** 

I don't believe the war is over any time soon, and damage is already done even if the war was to end this week, I think oil should be at least $90 for a couple of years, and the fact that we are not factoring any escalation and pessimistic scenarios is mind blowing to me. This feels like January of 2020 again, a slow moving train that everyone sees coming but no one is positioned correctly. 

I am long oil, I cannot add to any more oil positions currently as I am all in on oil, tickers XOM, OXY, OIH, SM, MRNFF, RUBLF, DVN, MTDR, AMPY. I want others to pick apart my logic, but overall if I make any mistake it'd be details on % gains, direction wise OXY is absolutely undervalued, its upside potential is a easy bet to make compared to its downside, my average purchase cost is $48, Berkshire purchased their shares at an average of $53.

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