Oil and gas companies are raking in huge profits, and shareholders are jubilant over dividends.

Document No.: A362/0383 Publication Date: August 30, 2022 Oil and Gas Companies Are Raking in Huge Profits, and Shareholders Are Jubilant Over Dividends In 2022, the global oil and gas exploration and development sector is projected to generate $1.4 trillion in cash flow; the world’s seven largest oil companies repurchased $41 billion worth of shares; and China’s three major national oil companies distributed RMB 85 billion in dividends during the first half of the year. Wang Nengquan Petroleum is the lifeblood of modern society. Petroleum and natural gas production enterprises constitute the backbone of the global oil and gas industry. Countless oil companies—large and small—and their vast workforce around the world produce nearly 100 million barrels of oil daily, sustaining the normal functioning of human society today. Since the second half of 2021, surging oil prices and an intensifying energy crisis have had a flip side: the oil industry has staged a dramatic turnaround from negative oil prices just over a year earlier. From national oil companies in petroleum-exporting countries to private oil firms large and small, all have reaped extraordinary profits. This article compiles insights from three articles published on the websites OilPrice.com and WorldOil.com, along with other relevant materials, to present an overview of operational performance in the global oil and gas exploration and development sector—particularly among international majors such as ExxonMobil—as well as China’s three major national oil companies during the first half of 2022. Beyond oil-exporting nations enjoying windfall revenues, these dazzling figures indicate that oil and gas producers themselves are also profiting handsomely, with shareholders smiling broadly amid generous dividend payouts—marking a period of robust prosperity across the global oil and gas industry. The oil and gas exploration and development sector will generate a record $1.4 trillion in free cash flow in 2022 How will persistently rising oil and gas prices since the start of the year impact global oil and gas producers? On August 26, 2022, OilPrice.com published Michael Cohen’s article titled “Oil and Gas Producers Set to Break New Cash Flow Records.” Its featured image—a sky filled with flying U.S. dollar bills—is eye-catching and vividly captures the article’s theme. The article notes that BMO Capital Markets, in its “Upstream Report,” stated that despite continuously rising costs, global oil and gas producers’ cash flow is expected to set a new record and deliver the strongest return on capital employed (ROCE) in 15 years. Based on BMO Capital Markets’ analysis of 120 global oil and gas companies, higher oil and gas prices are the key driver behind this record-breaking cash flow. According to BMO’s data, these companies generated a record $300 billion in free cash flow in 2021—up sharply from just $1.7 billion in 2020. With energy commodity prices continuing to rise, their cash flow is expected to climb further. Although production costs and supply-chain expenses continue to increase, BMO Capital Markets states that the oil and gas industry “offers highly attractive value for some producers, with significantly improved returns.” BMO Capital Markets’ “Upstream Report” observes: “We remain convinced that chronic underinvestment globally will substantially strengthen the fundamentals of the oil market through at least 2025.” In 2023, the oil and gas industry’s ROCE may reach its highest level since the 2008 financial crisis—exceeding 25%.

Western Oil’s Interim Financial Report for 2026 — Comprehensive Analysis (20261002)

Dividend Yield: In 2025, Occidental Petroleum’s dividend yield stood at 2.44%, up 0.57 percentage points year-on-year; its average dividend yield over the 10-year period 2016–2025 was 2.88%, 2.43 percentage points below the industry average for integrated oil and gas companies, reflecting a long-term downward trend. Earnings Forecast and Risks: The medium- to long-term outlook for the integrated oil and gas industry hinges not on whether global oil demand will vanish outright, but rather on when it will peak. Under the International Energy Agency’s (IEA) Stated Policies Scenario, crude oil demand is projected to peak around 2030 at approximately 102 million barrels per day (bpd), then gradually decline; electric vehicles’ substitution of road transport fuels is partially offset by growth in petrochemical feedstock and aviation fuel demand. Under the IEA’s Announced Pledges Scenario, demand could rise to about 113 million bpd by 2050. The United States remains the world’s largest oil and gas producer, with the Permian Basin accounting for over half of U.S. crude output; Occidental holds roughly a 10% share of oil production within the basin. Management asserts that its low-cost inventory can support over two decades of development. The company has exited the chemicals business, concentrating capital on Permian infill drilling, deepwater Gulf of Mexico projects, and overseas contract extensions in Oman. It used the $9.5 billion in proceeds from the sale of OxyChem to reduce principal debt to approximately $11.8 billion—with a target of $10 billion—thus creating room for share repurchases and common stock dividends. If Stratos’ direct air capture (DAC) facility comes online as scheduled, its primary role will be supplying CO₂ for enhanced oil recovery (EOR) and securing tax credits—not generating significant revenue in the near term; DAC is unlikely to become a material income contributor within the next decade. Considering the oil price midpoint, low-single-digit production growth, the reduced revenue base following the divestiture of chemicals, and the difficulty of sustaining the extreme profitability achieved in midstream marketing during Q2 2026, we project the company’s compound annual revenue growth over the next decade at approximately 1.5%–3.5%, with a central estimate of 2.0%–2.5%. On the earnings front, benefits—including declining interest expenses, potential redemption of preferred shares after 2029, and share repurchases once debt targets are met—must be weighed against the loss of OxyChem’s stable earnings and mean-reversion in oil prices. Net profit is forecast to grow at a compound annual rate of 3%–6%, with a central estimate of 4%–4.5%; net margin is unlikely to sustain the near-48% level recorded in H1 2026—which included one-time gains. A more reasonable medium-cycle central estimate lies between 10% and 18%. Key risks include: two-way volatility in oil prices and geopolitical shocks (e.g., in the Strait of Hormuz); accelerated energy transition and faster-than-expected EV penetration leading to premature demand peaking; increased earnings concentration following the chemicals divestiture; Berkshire Hathaway’s 8% preferred shares, which continue to absorb ~$680 million annually in dividends until 2029, plus dilution risk from outstanding warrants; environmental liabilities retained from the OxyChem transaction; Permian natural gas price differentials, pipeline and freshwater constraints; uncertainties surrounding DAC deployment and Section 45Q tax credit policy; failure to maintain organic reserve replacement at the ~107% level achieved in 2025, which would pressure both depreciation and production volumes; and potential management shifts in capital allocation priorities—swinging between debt reduction, dividends, and growth investments—thereby amplifying cyclical risk. Valuation Synthesis: As of the time of publication, Occidental Petroleum’s latest trailing-twelve-month (TTM) P/E ratio stands at 7.97x—superficially lower than the typical 13x–21x range for integrated oil companies, and also below the 6.7x TTM P/E calculated as of end-Q2 2026 (based on a market capitalization of $48.556 billion and TTM net income attributable to shareholders of $7.254 billion), which has since risen due to share price appreciation. However, this alone does not imply deep undervaluation.

Vaar Energi raises dividend as profit doubles on high oil, gas prices

Oct 20, 2026

Norway's Vaar Energi doubled its third-quarter operating profit to $2.21 billion driven by high oil and gas prices, announcing a $400 million dividend for Q3 and Q4 2026.

reuters

2026-07-20

Vaar Energi to Acquire BlueNord in $1.33 Billion Deal

2026-10-20

Vaar Energi raises dividend as profit doubles on high oil, gas prices

Vaar Energi raises dividend as profit doubles on high oil, gas prices

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