Occidental Petroleum's (OXY) Rockies production is expected to offset Gulf of America headwinds, with stronger volumes and lower costs supporting its Q3 earnings, UBS said in a note emailed Wednesday.

The brokerage expects production to reach the midpoint of the company's guidance despite GoA downtime. UBS also expects Rockies volumes to exceed the company's guidance and lower domestic lease operating costs to reduce unit costs.

UBS expects Occidental to reach its debt target in Q4 2026 and plans to look for an update on capital allocation priorities beyond $10 billion debt reduction, along with plans to build cash ahead of preferred share redemptions.

The brokerage also cited a stronger near-term oil price outlook as a potential benefit for the company.

UBS maintained a neutral rating and raised its price target to $73 from $67.

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