After a mixed year in 2015, Occidental Petroleum (NYSE:OXY) is now down 45% from its all-time high. It's a high that was set nearly five years ago, when the price of crude was trading at triple digits and before the company spun out roughly 80% of California Resources (NYSE:CRC)

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With the the price of oil now in the low $30s, it has put a lot of pressure on Occidental Petroleum's cash flow. Further, the plunge in crude has also has pulverized its retained California Resources stock, further eroding a potential value creator for the company. Because of these weights, as well as some more transitions coming down the pike, 2016 likely won't be the company's best year yet. Here's why:

2015: A year of downshifting
After freeing itself of California Resources in late 2014, Occidental Petroleum spent the bulk of 2015 shifting gears to run its business at a much lower oil price. This resulted is a steady step down in capex spending, with the company reducing its spending from $1.7 billion in the first quarter to a run rate of roughly $1 billion by the fourth quarter. That mark would roughly align with the company's projected cash flow at about a $50 oil price. That said, Occidental would still be roughly $500 million short each quarter when accounting for its dividend outlay, which needs oil over $60 a barrel to fully support. However, with $4.3 billion of cash on the balance sheet as of the end of the third quarter, much of which was received from spinning out California Resources, it had quite the cushion to support it until prices improve.

Despite the slow pullback in capex spending, Occidental delivered strong production growth, which through the third-quarter was up 16% year over year. The primary drivers of this growth was a 51% surge in production from the company's Permian Resources segment as well as the start-up of its Al Hosn gas project in the Middle East. One of the major reasons why production in the Permian grew so fast despite the spending reduction is because the company has become a much more efficient operator, not only drilling wells faster, but for less capital. 

2016: A year of transition
Occidental Petroleum is building the company around its Permian Resources division. That's what fueled its decision to unload its assets in California as well as its subsequent decision to exit its Bakken shale operations. The company, however, isn't yet complete with the portfolio transition and addition asset sales could be on the way in 2016, after Occidental announced that it would minimize its involvement in the Middle East and North Africa going forward.

With the company minimizing its involvement elsewhere it is putting nearly all of its efforts behind the continued to ramp up of its production in the Permian Basin, which it expects to step up from 75,000 BOE/d in 2014 to 107,000 BOE/d in 2015, with plans to grow production up to 120,000 BOE/d in 2016. However, given where the oil price is right now, and the impact that price is having on its cash flow, that incremental production might best be left in the ground until conditions improve. Because of that Occidental Petroleum might decide not to pursue this planned production growth in 2016. That would mean another transition for the company, going from a growth-focused company to one that's focused on maximizing its returns. 

The continued transition of the of the business is only part of the transition facing the company in 2016. Long-time CEO Stephen Chazen is set to step down from his role at the company's annual shareholder meeting. Stepping into his place will be Vicki Hollub, who was recently promoted to COO as part of the succession planning process. Given that she's an insider having spent 35 years at the company she's unlikely to make any major changes in her first year. Having said that, leadership changes are typically viewed with some skepticism by investors, and any early management missteps after Hollub takes over could weigh on the stock.  

Investor takeaway
There are a lot of factors that will likely weigh on Occidental Petroleum this year. It all starts with oil prices, which could really hold the company down if it stays weak all year. In addition to that the company is going through a pretty big transition with both its portfolio and leadership, and the uncertainly surrounding these issues could also weight. Add it all up, and it will be tough for the company to break many records in 2016.