Occidental Petroleum (OXY) $3.8 billion debt reduction in Q3 is "most important" for bolstering the company's outlook, UBS Securities said Wednesday in a report.

"Positive updates" on debt, integration with CrownRock after the $12 billion acquisition closed Aug. 1 and low carbon venture projects are expected, UBS said. Results from Q3 are set for Nov. 12.

UBS projects Q3 cash flow of $2.90 a share, trailing Wall Street's $2.99 estimate, and the production forecast was trimmed following the sale of acreage in the Barilla Draw field in the Texas Delaware Basin.

Following the Barilla Draw and Western Midstream Partners (WES) divestitures, Occidental completed $1.7 billion of asset sales this year, and proceeds, along with free cash flow and cash on hand, will cut debt by $3.8 billion in Q3, covering 85% of the near-term $4.5 billion goal, UBS said.

UBS reiterated its neutral rating on Occidental Petroleum with a 12-month price target of $59.

Shares of Occidental Petroleum rose 0.8% in recent Thursday trading.

Price: 51.65, Change: +0.40, Percent Change: +0.77