Houston-based Occidental Petroleum Corp. (Oxy) senior executives have chosen to stay focused on their game plan and the company’s brightest star, the Permian Basin in West Texas and New Mexico.

Even with a reported $426 million 1Q2016 loss (minus 56 cents/share) compared to a small profit during the same period last year, newly named CEO Vicki Hollub said Oxy is maintaining robust cash flows and access to low-cost capital, both of which will help the company thrive as commodity prices turn upward.

Hollub said Oxy's extensive reserves and enhanced oil recovery (EOR) operations in the Permian can be very profitable at $50/bbl oil. "We think the world will continue to need oil, and when markets demand production growth, they will first look to the Permian, and we will be ready," she said.

Oxy’s  Permian production grew by 30,000 b/d, or 31%, year over year in the quarter.

New Mexico is a special focus within the Permian, as outlined during the quarterly earnings conference call Thursday by Hollub and Jody Elliott, president for U.S. oil/gas operations. "We're seeing better productivity from our wells [generally], but we are particularly excited about the New Mexico wells." Hollub said.

Noting the need for more operating data on some of these wells, Elliott said he wants to see the effect of Oxy's base management programs. "We're having some really good success there [New Mexico] with pumping and surveillance activities, and early completions are providing some uplift as well, so we want to see how all of those play out before committing to the [plans for the second half of this year]," he said.

In the near term, seeing all this play out will not require any large investments in new infrastructure, Elliott said in response to analyst questions.

In response to a question regarding Oxy's current attitude toward its midstream assets, Hollub said in a "normal world" (Permian production growing, natural gas and liquids prices recovering somewhat) she would expect to see at least $100-200 million of annual income coming from that sector.

Reiterating his bullishness toward the New Mexico portion of Oxy's Permian portfolio, Elliott said that many of the company's operating and technology advances are sustainable, so "price is still important, but it is not the needle-mover. We're in conversations with our strategic suppliers to better align our respective operations to drive down combined system costs, and given our scale in the Permian, we're getting considerable interest from them."

Hollub said Oxy hasn't established a set price for crude under which it would begin ramping up production. "We want to see some sustainable improvement in prices, and make sure the fundamentals support those prices," she said. "A lot of operators are saying they would ramp up at $50/bbl. We have a very deep inventory in both resources and the EOR business that would generate real good returns at $50/bbl."

In its 1Q2016 results, Oxy reported the biggest part of its red ink in its overall foreign and domestic oil/gas activity (losses of $388 million most recently, $189 million in 4Q2015 and $22 million for the 1Q2015), with smaller losses growing over the past 12 months in the midstream (losses of $95 million in 1Q2016, $45 million in 4Q2015, and $5 million for 1Q2015), while its chemical business stayed profitable ($126 million in 1Q2016, compared with $116 million in 4Q2015 and $139 million in 1Q2015).