04:12 PM EDT, 04/16/2024 (MT Newswires) -- Occidental Petroleum ( OXY ) faces headwind from delay in its CrownRock acquisition after a second request from the US Federal Trade Commission pushing back "potential asset sale catalysts," UBS said in a Q1 earnings preview.

The company has a plan for debt financing and non-core divestitures to fund the acquisition, but will hold until the deal's close, the firm added.

Rising oil prices will help the company increase cash flow and reduce debt, but any potential gains are constrained because of lower capital returns compared to peers, according to the note.

The firm said Occidental is still awaiting instructions after the November outage of the Main Pass Oil Gathering System in the Gulf of Mexico and the restart delayed into April will impact Q2 guidance.

UBS reiterated its neutral rating for Occidental with a price target of $74.