It's a new era for independent exploration and production company Occidental Petroleum (OXY -0.56%). Occidental is doing some big things that will make the new Occidental Petroleum a much different company than investors are used to. Occidental has revealed a series of steps to reorganize itself. It appears the company's intention is to become much more oil-focused. This stands to reason, of course, due to the boom in domestic oil production in recent years. Occidental has considerable operations in some of the most prominent oil-producing regions in the United States, including the Permian Basin.

Read on to discover what steps Occidental is taking to streamline itself, and what the new Occidental has to offer.

Big moves under way
Occidental Petroleum plans to separate its California assets into a separate, independently traded company. The new California company will be headquartered there and will be the state's largest natural gas producer. This is a significant event, as Occidental's California assets accounted for approximately 20% of its 2013 production. The remaining Occidental Petroleum will operate its core oil assets, which are located in the Permian Basin, as well as assets in the Middle East and Colombia.

Occidental's Permian Basin operations are truly the major source of its production and growth. The Permian Basin is a massive formation that accounts for approximately 15% of total U.S. oil production. Not surprisingly, a slew of energy majors are lining up to profit from the Permian Basin. Occidental and Apache Corp. (APA -0.83%) are each focusing intently on the region. Apache has sold off international assets to double-down on the U.S. Over the past five years, it's cut its exposure to Egypt by half. Instead, Apache has increased its presence in the Permian Basin from 9% of production in 2009 to 21% today.

It should be no surprise, then, that Occidental has staked its claim in the Permian Basin. It's the biggest oil producer in Texas, and Occidental accounts for 16% of all oil produced in the Permian Basin.

Separately, Occidental also announced a major batch of cash returns to shareholders. Occidental increased its annual dividend by 12.5% and announced it will repurchase an additional 30 million of its own shares. This signifies management's confidence in its ability to keep production and profits growing in the future.

These cash returns will be financed partly with the company's existing cash flow, which is strong, as well as the proceeds from a recent round of asset sales. Occidental recently struck a deal to sell its interest in one of the largest natural gas fields in the United States. Occidental's Hugoton Field assets in Kansas, Oklahoma, and Colorado will generate $1.4 billion, which the company has earmarked specifically for its new share buyback authorization.

A more focused company in the works
Occidental's decision to spin off its California business and sell its natural gas field is all part of the company's over-arching strategy to become a smaller, more oil-focused company. Occidental has ramped up its domestic oil production heavily and stands to continue this trend in the upcoming year.

Occidental increased domestic oil production by 4.3% last year, and intends to double its U.S. oil production growth to 9% this year. This stands above the forecast production growth for close competitor ConocoPhillips (COP 0.39%). ConocoPhillips' long-term goals call for production growth of 3%-5% compounded annually. Conoco's trailing production growth lags Occidental's as well. Conoco increased domestic production by 7% last year.

The Foolish takeaway
While Occidental is gearing up its oil operations, at the same time, it seems that Occidental is shying away from natural gas. Even though it's going to substantially increase oil production, Occidental is simultaneously tapering off its natural gas production. Management expects domestic gas production to drop in 2014. When Occidental presented its fourth quarter results to analysts, it stated that it would look significantly different by the end of the year. It's clear the company is following through with its promise.

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