OXY - Earnings call transcript Q3 2017 | Occidental Petroleum Corporation

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, and welcome to the Occidental Petroleum Corporation Third Quarter 2017 Earnings Conference Call. [Operator Instructions]. Please note this event is being recorded. I would now like to turn the conference over to Richard Jackson, Vice President of Investor Relations. Please go ahead.

Richard Jackson

Kate. you, Thank and Third everyone, for in participating Good XXXX thank Conference Petroleum Quarter Call. Occidental morning, you

to On the the Oil OxyChem. President moment, call and with Dillon, President of us today are of Gas; and Operations; call Officer; Officer; Elliott, will Vicki Ken Burgher, I and Domestic Financial Aber, Oil Chief of Hollub. Vicki a Cedric Senior Gas Chief And Vice International over just and President Jody turn President and Executive Hollub, President BJ

As the in contains to forward-looking results that a these statements. subject certain projections statements within uncertainties today's conference implied actual reminder, call laws. differ are and materially the federal statements and cause other meaning These from risks of those to may or securities expressed

cause factors to the on available on Form could most information is that company's differ recent XX-K. results Additional

release, our earnings please the reconciliations Relations quarter call off downloaded go presentation press schedules third Vicki call will I ahead. over GAAP conference the Our to to our Vicki, and turn Hollub. now and website www.oxy.com. Investor the at be non-GAAP can XXXX supplemental slides

Vicki Hollub

Thank you, morning, everyone. good Richard and

from personal or Oxy Before chemical and serious need entire international received get hundreds across all my to our East to and employees progress would organization time devastating our of take to seen Even efforts normal highlights from and during we flow our started Colombia. all experienced impact rates. storm parts their teamwork Middle unity among of operate our from to I'll was think this members continuity of aftermath. and was enact weighted financial from the through have the and assistance that business after provided the Harvey. retirees. possessions. have breakeven family sites business me incredible. and this our of storm Texas proud such provide without like I'd been of share cash community, in the for plan. to third and the prevailing to Permian storm. The one our plans and on assets returned prepared never our storm we the our U.S., on be on our was I damage employers business this and the X, results, help due operating I of our destruction, safely to quarter our but who the parts to were our throughout have Times were through The This organization in team's organization. organization our assistance the and Oxy its now Coast like Slide that organization our Gulf then had to manage third an face towards I family really appreciation quarter Hurricane express our We of homes displaced were to some part will the able made update of

Let's most with recent result. start well our

teams We by our made level. we've has performing attribute chain. targets. into also leaders surpass you, teams the results Since And from growth to XX%, want and confident approach. quarter, new X,XXX well impact we in chloro to I like our great to in Despite the unit. got $XXX margin of the a August, already capacity easy well. our throughput a per integration able high breakeven Ingleside value-based from well continues development field energized has exciting increase strong to us been acquiring had in the people our assure that plan. great income. which ability our the Southeast Cracker million Resources. targets Their the our asset, Mexico. JV, a XX,XXX BOE to these strong COX got I'd received increase gross the along plant created as Seminole-San operations only of enabled some real as in can steal as reach of ability capture of Ethylene asset Permian very first production Those Andres day Harvey, we've highlight we've by don't chemicals improvements I field group these are our While day. BOE results teams sustain per generating and ahead We in team our at thunder plant segment plant dividend Jody, our basin-leading and New We through to additional to and the is results this in our had not to set vinyl We're of and our don't

to this market tighter the trend Hurricane expect well due improving a to We as as in industry continue due fundamentals term Harvey. near supply to

X. Turning to Slide

This last our goal mentioned quarter's on WTI to at at $XX we'll growth. flow in WTI, capital we slide to WTI WTI. progress at call, at X% our be we'll dividend towards $XX and I and and $XX cash cash $XX cover to the of able means sustaining As flow production this update operating you production breakeven each the will X% neutrality include within quarter generate

illustrates so, progress our the As progress Harvey Slide expect towards this you and showed their assets teams progress. might X of targets. our quarter. since from all for impacted negatively Even

Cracker We of our the cash just one-time column. prior our I we included have chemicals a the annualized for And received event. is million JV. business, impact gray $XXX first for quarter. Harvey in flow of This million in payment mentioned, cash as flow first dividend the impact catchup from included This Ingleside the $XX

million comes this ongoing $XX after year. target that chemicals fourth remainder be dividend to to able plan quarter the expect achieve $XX $XXX improvement. has In of average will in the wider spreads, barrel The Gulf the of XCPe million to over This we in business, cash expectations. million. a $X.XX from achieved the per flow quarter. repurchase midstream We quarterly during The to our Coast averaging Midland benefited annualized the exceeded segment online

we In to pretty milestones our Permian the of target divested million throughput expansion sequentially, we included midstream as Crude X,XXX net August X. our the of Resources Hosn that $XXX Al the BOE of X,XXX achieve BOE grew Terminal. day Ingleside per and business, maximizing at Additional

increase growth we expect the accelerated We our of rate coming give in new quarters our activity. as substantially to on online. will have timing the guidance wells additional coming Jody

reductions Chemicals have by the are approximately a capitalize to respect businesses our soda chemicals with strong to XX% market the driver, primary on quarter pricing since the continue in prices, EOR In in environment. Finally, $X increased to improvements operational initial plan, continue beyond experiencing flow of improvements. profitability end achieve Caustic unit, to business, the improvement. Andres the equates the first we'll previously to annualized of COX cash and the million that per EOR BOE improvement price This the XXXX. mentioned. of improve operations $XX to we Seminole-San $XXX expect cost the

through continue billion liquidity the with made value closer WTI of to the in end with bullet and a capital $XX during we'll presented for we billion we At added as like $XXX slide I'd we Slide XXXX to as how quarter, approximately towards needed operations an manage portfolio to communicate XXXX. a our capital additional of million to this to smaller PAGP to well pathway achieve an if contribute the range less that our flow averaged quantifies is $XX has our of cash you units have cash in progress ensure X. billion. than the available to $X.X $X.X billion additional to My the are progress preliminary We $X.X gap that to gap and of market we've the the between bridge $X million. our cash goal. fund as of third $XXX pleased breakeven. from to to modems cash Since slide budget XXXX, We average incremental plan prices to we the final had remind

XXXX, average an cash with over have $XX WTI to the at and price sufficient even cover oil funding to to price. we turn also versus Cedric I'll clear, our while be breakeven path call to the capital Burgher. of liquidity sustaining dividend now and our $XX So

Cedric Burgher

per in the and volumes day. and BOEs well EOR results. quarter at day, Permian like day, range was start end downtime was of end capture production in impacts Hurricane also and XXX,XXX of our successful Al Harvey, we about to the per cover XXX,XXX Columbia BOEs XXX,XXX which ongoing recovering step-change guidance reflect Permian guidance volumes Permian of at additional X,XXX by financial results, reported per gas in losing will Total at day BOEs production impacted Hosn our I the a BOEs XX, production increased which Higher the the our XXX,XXX at was on day Hurricane in Seminole-San Permian low our BOEs present expect high-end Andres guidance the on We came guidance. COX the rate I'd production within in third-party Gas per at with included throughput. of so production BOEs Thanks, Middle third EOR the Vicki. at sequentially quarterly per production The our Resources in range. an plant EOR Harvey. of came International production downtime highest XX,XXX range. to came the day from updated per -- address will a the in Jody unit, at results integration Reported Slide despite production address plant. and Permian East

and nearly prices BOE operating year-to-date averaged share was per $XX.XX trend $X.XX fourth were operating $X.X budget. core costs for joint ramp-up. and per capital despite cash be expect receipt the cost improved third and $X.XX. and incorporation spend We the the during our Andres from the spend the and the higher for XXXX they the Hurricane with to we $XX.XX we $X.XX stream segment expected flow quarter, Quarterly improved cost X% in year gas costs to our operating by in quarter, EPS $XXX have total Domestic production BOE to Permian attributed the lower venture. program sequentially spent ethylene $X.XX sequentially oil to Harvey. the cracker to were operating Operating cash attributed was maybe with well EPS as quarter all in NGL reported quarter these $X.X to in the Resources COX cash approximately Improvements lower. million capital average, to well BOE. second impacts billion $X.X versus lower The per billion. at roughly Third billion to lower improvements EPS of continue distributions versus as quarter per and of EOR where unit of mainly to Seminole-San Permian capital flow our as expect

QX lower in range Resources for to our was With capital driven to billion of international effective Additionally, There to tax the X rate, at previously midpoint the respect primary assets. the we are $X.X come XXXX. expect reasons rate billion $X.X Permian stated in mostly our by our here.

XXX% First, sharing in and operating we -- production additional $XX us reduce take savings that without by were contract to allowed bottom to costs the tax. to able of line Qatar, approximately million our

our no associated with Second, million we $XX business foreign tax. an are related Iraq former recovering additional in to

had Hurricane In and of prior the were better-than-expected vinyl negative plan considering Harvey. production and items, addition costs storm some quarter. net third lower and to maintenance. those benefit impact items, in there plant of some hurricane OxyChem's which the raw on partially had Favorable the in $XX offset the domestic to million million quarter the operations earnings the material were benefit smaller $XXX pricing impact chloro

income appendix, during on slides investment of Hurricane will in including cash information exceptional in Coast our plant have third business loading fund We excluding to the with liquidity including the terminal Midstream a impact continue in well, our during updated The quarter. XX, as range you for pipeline. in guidance we and We to additional Harvey business to the Midstream's several fourth information Midland can the from with $X.X online XCPe Gulf see and which additional within our on chemicals came the highest quarter achieved billion. our have come our September. performance equity the planes the lower Harvey breakeven appendix business that spreads. of monthly oil On in our balance outlook rates a plan our slide ample included at on experienced Slide

operations generation coming the and by in to production from deficit a our flow balance capital our on and the $XX generating gap be While at dividends, XXXX at we growth. WTI of this cash to currently are expenditures expect while assets quarters end narrow our to is --

is prices Let regards approximately which our support less XX% levels. current forecast said of me spread plan, liquidity. We million to if reiterate Furthermore, to Brent at business the $XX. continues to completion us average the that in WTI what hold cash than our assuming benchmark, Vicki be exposed of $XXX our through additional gives deficit to

guidance have on provided updated We XX. Slide

XXX,XXX the XXXX day while maintained BOEs to per end guidance of top have We production our day. XXX,XXX year full at bottom ongoing the BOEs guidance our of end lowering per

for will updated operations, on to and cover In third-party full planned and reflects turnaround further by third with and accounts on drilling guidance carry quarter to we the fourth Andres Seminole-San will our items wells pipeline and year quarter, new our quarter. impacted activity. be improved Our progress. rate the particularly ramp-up production a fourth EOR visibility exit results the actual fourth optimize maintenance our information planned will quarter Jody out

has into guidance XXXX. Dunes been are to Given Resources the development by per in day. XXX,XXX trajectory year heading XXX,XXX of to the narrowed total the area, Sand we production production BOEs Permian excited improved results Greater

production higher lower our BOE is trending than We quarter highly My approximately expect annual on wells. be to oil segment our these approximately fourth to our BOE per XXXX. costs XX% lowered are -- have Resources productive from $XX.XX point and domestic that quarter gas we in as $XX to per OpEx fourth guidance final due Permian

Brent on is business, the other lower range Coast enhances Gulf million. for of generate to spreads, areas expects activity. quarter to due business. in as benefit of business chemicals income to our the as is from construction The to in which our expected more to the spreads million, for million Fourth sequentially export accounts $XX which wider Midland $XX to Moving Coast is guidance well Midstream margins. seasonality wider Gulf $XXX marketing to

Lastly, is capital our returns we on like return be remind Last you commitment metrics. returns-focused to told that quarter, we that I tied the compensation to would of to will our amount you increasing strategy. employed or of

States returns for call believe XX% the Jody. and rates now which our to over hurdle internationally, in shareholders. in I'll minimum XX% are United after-tax result Our the will we full cycle leading turn

Joseph Elliott

your Across Cedric, the you, delivering with our during had plan. And you, our Thank generate Thanks production our restraint growth and opening well to share Vicki morning, and value efforts, breakeven team's you. good some to highlights cost we're our domestic results more thank to we in basin-leading results on everyone. Permian. with for less your well towards business,

to value-based Vicki development our we attribute mentioned, success As this differentiated approach.

on in results Mexico the well New Dunes area Resources XX. Permian record-breaking Our team Slide delivered Greater Sand across multiple shown as benches

the the put day. wells During BOE all-time our based best XX-day the XX the total wells quarter, production wells with a in area top BOE these X,XXX on X approximately team on XX-day that X of in Permian Greater Sand in day. basin per of averaged per Dunes ranked rates

X-Y, span the Spring makes of Sand which Dunes perspective. XX Canyon extremely which results Fed full-cycle peak rate Cedar Wolfcamp area XX record oil Bone the to highest second equivalent a from is Greater the X,XXX XXH third returns a barrels recorded achieved XX-hour rate in Our Bone peak and attractive the Basin. of Spring, These Permian the

us results the We've Our area. in inventory our improve confidence $X Greater expect these $XX Dunes across in breakevens yet this X,XXX remaining in counts, incorporated to to we by gives Dunes the the locations engineered Greater Permian but Sand undeveloped into of not improvement repeatability area. the Resources to Sand approach

appendix Sand in and Texas Barilla B, in Greater develop area, wells XX. Greater the team highlighted Dunes XX delivered on Delaware Slide Oxy our and Spring also record our While focus Draw which of Bone Wolfcamp Slide our the is area, are second our the

to ongoing well Our as and plate-leading well designs of our performance potential step-change asset. maximize the and of customized characterization result subsurface a

to results across from improvements basin. surveillance studying additional make fact, teams In the our are

visibility of offset to productivity these and continue as on results, efficiencies the per a X% X quarter, materials saw over and the next we BOE on we provide $X.XX side. quarters. cost to flat timing for Slide from addition the ago OpEx decreased improvements operating pressure providers. stellar In inflationary our production and well online from trend XX, approximately to year service the wells ramp On costs during

beginning increasing in Greater Dunes, late the to peak area at Sand online X of into more operated We'll place Sand year to wells rigs. X in Permian quarter. reminder, while of quarter. added quarter. begin the activity Greater the to Resources of majority X We'll rigs of in a fourth online quarter XXXX, the rates reach late second also XX we the rigs X second to segmental 'XX quarter from As the maintaining the the Dunes with the and in a We'll wells very the total first the XX shift current ship to in

Permian third-party Harvey. quarter grew modestly impacts third the from and Resources in divestitures production due Our to Hurricane

the see generate flow and needs that plan. to expect in will for the Oxy that XXXX growth breakeven fourth cash We strong unit the quarter into

As will well production of we're plan. increase, results a continue confident above our extremely ability result we in flow out laid breakeven new to plan The on have Oxy's XXXX. number in improve rate growth cash deliver and in to the wells XX% on

was and we're team of increased $XX plan like I'd immediate our achieve September COX in technical by unit improvements improvement Andres throughput reduction. further per know-how optimizing in became and our we've the achieve value production capturing Seminole-San the our have of EOR success the By OpEx in the acquisition. from X, cost This plant, improvements. applied operator operational X to to to and our X,XXX-gross BOE operating to confident Finally, field's our to of on the per BOEs speak $X had component day. We plan,

call the back Our asset. ideas now to to innovative Vicki. to is with energized continue the turn newly-integrated I'll team improve

Vicki Hollub

Thank you, Jody.

EOR August our Area Director Peterson, who served had Business on XXXX, we've was Permian Rob our to meetings. I'd this President an in he appointed business like job since update you provided made that input leadership I'd Rob in our great during to exceptional Chemicals, I this but in noticed of OxyChem strategic year. as did change know of a team. mid-September Now also

with Chemicals, to EOR time be So that Rob and and OxyChem's positive success, Rob previously State impact from President oil we Degree we within staying is vinyls. Manager OxyChem. BJ Bachelor's Hebert to Degree has and of anticipate Finance role business and in I'd wealth years it XXXX and to in University environmental instrumental in and the Chemical for Vice recent Chemical XX-plus targets. Rob exceptionally in by President BJ gas. Methodist stewardship for BJ the President Merkley in the well, Vice on today. them experience. like of spend the felt Engineering some Rob close and was call to company Vista OxyChem timeline a EOR the Engineering strategic from Corporate University, General a of of is replaced passion beneficial and now Basic for who Chemicals, will of for in growth University. joined an of was he have and production business. success. a holds an our from Florida. our reiterating holds He was by industry MBA achieving BJ from BJ's and insight and Bachelors Senior brings most Oxley knows MBA chemicals Southend safety, was the us and

add per expect by We XXXX. XX,XXX to end day the of BOE the

fourth begin which the growth the excited materially upcoming with trajectory will step-change well BOE XX,XXX about in completions quarters, rampup for derisk per to Resources quarter large are timeline Permian in production the of the and in achieving the well results We day. of a the

with while And to and focused fully the sheet your businesses. plan meet the oil the across dividend. in the Our and We'll balance and chemicals open teams for fund up have organization our we plan exceed targets cash to ample growing our are paying finally, ended now liquidity questions. on it quarter gas, midstream and our

Operator

Instructions]. [Operator

Stanley. Our first question comes of Evan from Morgan Calio

Evan Calio

oil you first and cash planned is X% do X% well you funded XX if could. at return cash model? bolster further to to higher -- talk the -- yield support cash our to the to price XX you the via growth to timing those Meaning, pieces, My does the question model? or flow if to does is to use growth? reach you the resources model that excess -- shareholders permitting Or accelerate How understood. we the factoring How do at bridge could

Vicki Hollub

Yes.

for for to We of on to capital is plan you plan $X.X December $X.X the Then our get plan lock are. those final XXXX. in billion. billion we'll our Specifically, us numbers present specifics to what for to approval the XXXX and plan board into in update the

again on that a get milestone the So there. said, to as liquidity had we depends we beyond breakeven we'll we but cash Once any be of really cash outspending flow at have that we $XX, the excess achieved is. is the third capital -- the always followed first, cash are organic have our we priority. the today's And dividend. situation maintenance by pay our with But for organic world, in priorities opportunities what flow to growth growth our

it that, be and the would share Beyond repurchases. acquisitions

to always, want So and make deliver the to decision shareholders. opportunities value excess have cash, the when best to we we assess we to the sure we the make situation that

Evan Calio

second, there Greater walk really there And improvements, if through costs is the subsurface are well color of the what in you I and driving there us with specifically maybe -- any would associated step-change performance? is could, helpful. the improvement be performance the is any Dunes' targeting highlight -- Sand Could quarter. And

Joseph Elliott

this morning, good Jody. Evan, is

recovery high there. the these which value hit You maximize better really kind to assets. is to leading from It's improve of characterization, the subsurface us about wells points targeting

below And you a the So industry. average for the in that find been but what assimilation designs. on value-based interesting talking to again these a well probably is that it's long in time we've leads these wells targeting, of what's -- better culmination what for sand-loading is about results development, better

the are and capital this can I -- it confident how to think plan about argues cash growth a we has much more how outlined. that Vicki standpoint, efficiency contribute from So even plan breakeven we that

Evan Calio

-- there? X,XXX any results while be I early, are if mean representative could. do follow-up, your a expect it locations as thoughts just across these I Maybe might how

Joseph Elliott

representative. We very think it's

What's benches, do work bench. also X in Greater to areas exciting continue of Dunes. Sand just other is as it's X We this not about across appraisal

more I avoid think an wells wells done implications. manage to of the other wells we're and shut-in that there brownfield where that's in offset a development, color is -- area are -- legacy this is having to

greenfield market, As We're X-well of simultaneous take about we the the plan because latest water a be do move field field to It's -- the of of XXXX, capital of it in efficiency, able move got complete advantage the development of help and area. into rates, produced. central the will is we Dunes that team, rates facility for includes are we've drive excited pad generation battery into Most rig there being and operations rollup that, on really to plan more that of ability our drilled, X-well startup at -- the includes Sand a tank and more development Advent us and which recycle. with pad we're pipe. our legacy handled development fluids will rig

these up well that even extend field believe capital plan. across that development the efficiency we set new so better and And for we're results inventory with

Operator

America. The next of question of Leggate from is Bank Doug

Douglas Leggate

or there follow-up, is sticking wonder, target, Dunes that that set guess a clearly why as again you I you when the than better if just you're your is day help XXXX reason And of conservative expecting are are on Greater relates there, please. Sand target? I've wells got about to us timeline you you The XX,XXX changed still talking you're it type cadence. timeline? results. understand could a substantially BOE per end focus the year well what's being I of but with Are what Vicki,

Vicki Hollub

are achieve expansion, we're day export Hosn facility like are drivers Al may -- there the at to the there than but may later No. a that in those ensure the We other XX,XXX place the our earlier of year. we our where capacity end take XXXX, full trying

for the point of being have are margins is margins ensure sustainability full to quarter. timeframe our the fully those and entire are we realized that in intended which really of full improvements place and to capture that the So all

Douglas Leggate

would clear X,XXX but be are tight to believe a on location? to, just given these slides results of you the guess as I And a the never one know spoke across curve this it Jody you really repeatable, is repeatable I

Vicki Hollub

Yes, We that doing reviews we it's some of believe that. reason no they're this definitely this us to impressive how technically. over And last for is of the sat days not believe very work. just There's couple sustainable. through

fact we -- seismic, have need that will take and do -- we we the fact seeing XD what we deploying that and can to can where we're seismic tie to that wells performance the predict the drill. now are end In where

really So about. excited I us, really we're is think and all a breakthrough this for

Douglas Leggate

that quantify, backdrop? quantify Does a so, of dollars and assets a planned. Vicki, commodity And monetization, -- ago happen We field, that, just on got to is guess guys. I it few it those My see -- on regardless you're the the upclose chart process I'll is thinking of the weeks the just and plus-billion got thanks, the leave what $XX in of the case, so sales breakeven, you've again management, follow-up parts couple that that for implies of of still eyeballing key portfolio that obviously which bear under if there.

Vicki Hollub

Yes.

point the So have monetize that most or we'll some recently said unit. said we've at always plains

but that point we want to the do it. will to We pick some do appropriate at time

really Secondly, whatever with our want of the that this that in we highest lot And environment, of sense Permian it for continue to our have portfolio. makes really optimize we what Basin, position do that to to huge us because we're success and areas development because a develop happy the -- to had have, priority swap blocking we areas. first we've in acreage is we

than preferred. sales So outright do can the is that we more rather trading

we some are in acreage any the that tail environment, our portfolio there at However, of sell. end would

Operator

Paul of The next Sankey question Wolfe is from Research.

Paul Sankey

you answer investment you maybe happens be X% ask to of you've think I oil follow-up conceivably, dividend back idea really in that so the $XX, assuming made the about XXXX of being that and that go that $XX think -- you of investment is case X% Oxy. for would case the X.X%, longer-term that or you that your kind a for that a relatively the given I base if returns the but and a could the plan, the now about that had simply and CapEx could Oxy you to you Evan above which double-digit whether would to a -- context at off talk Could got you as at to year Vicki, what level. that get be seems in beyond even of talk call, the to Can fixed early go go see I that not making. prices

Vicki Hollub

for I strong haven't We've but our mentioned the continue is highest dividend It we investment capital the come more priority, this know, our is priority with growth to to downturn, able historically, maintenance dividend case think to past over do been you to XX the we second rates highest because as do us. were years, as and I that. that's the growth a than the -- able we've rate. is, return during what we doubled S&P

that back our be meaningful to consistent and production Going we forward, get that will to with a growth. want growth

Paul Sankey

major be be pretty X, disposals second going made it the is to in again, are about acquisitions because term. sounds that few neutral will thinking then to follow-up and mostly long it there's no And -- portfolio swapping moves a to be

Vicki Hollub

just so There the optimization ones, major are tail-end. no of

Paul Sankey

the acreage -- about Permian of of I language see perhaps, of results I the of a terms in you adoption the get been is that you do What performance. it may are industry is in but been negative, and rest which terms this extensive? be behind finally, the Okay, on a growth achieve know still your having I your new as that. this a trailing little M&A? -- characterize rapid something of a can see know you very new in way a bit great, is result? bit basis Or near Do And technologies, -- that being you've this history by slow the in would company you what improvement little

Vicki Hollub

acreage. not certainly it's Well, the

right able is it approach do in team, acreage right we've over is the business people, to our changed way. the great -- and our we've to place of the been I resources have We past right that in think years, And this leadership significantly. the have we few put what part

right now. rates we really the thing evaluations we And and terms also although of talk others heard been that field us doing offset data able amount value-based from us. statistical. don't go a maximize done realize you -- really doing than in planning we've more about going need all all apply you plays maximizing work is integrated massive achieve of build shale out, I taken you you we development And it But target ensure have, the the rates, that do our all of analytics not us but think to help for initial point of you rates the how had your And we've you're outside the good the our I initial believe, is development where give But developing into really really for by just analytics, the from science development. do rest requires most, focus the reserves. parameters we of other stages do We're that honestly, target more where of and of of people how you plays, more to to how that. from and I shale clearly, for how we -- and need the my now some but business, you in thought to acreage in to to the third field competitors. that so value resources focus how apart, we're that's that value. think But far, the data were started from have its some trying on need terms of our that wells, your characterization just what taking to on We've all you XX-day pace with and breakthrough XX-day the the that have matter that. using subsurface we're conventional of really they what lot And that sets to sophisticated and value made do not our our can do these you we're place operator operated, we've applying our the really past to in We with struggle work, plans of you than are. that's because to so what development and to a the some view the rates field a information point initially now we've a get measure have, the that, optimize we're us. wells us parameters only that plan, full do until the in matter, the taking and infrastructure But to our need end what really shale you offset is we're rates are we a early a done breakthrough

Operator

The next Phil from Gresh is of question JPMorgan.

Philip Gresh

required question, break capital, slightly results. Slide wondering been first X% underlying a sustaining basis out here you capital, ask changing? be sustaining about if where different X%, of dividends, longer-term has the would from with do I'm your Paul's all hit well talking on the possibility to way. growth maybe -- On think in a at the your that I your to a guess guess, a basis, to growth basis My you've X, capital you from follow-up it I or improvement

Vicki Hollub

we what there down. learn the come more I we that efficient get, I think the possibility more we a and that, about could think have is

Philip Gresh

I that into back billion, flows, CFO -- Slide your saw surprised cash question talking chemicals back annual would get to pretax nearly DD&A appendix, $X and guess maybe because are income on the of be traditionally kind a about be go a effect implying that the normalized basis I chemicals I an basis. tax you're Right, around And was little to if billion you the I -- you $X.X billion. that to that add the by okay. $X second where be for right XX, can nearly My

there to there respect effect of cash is with kind there cash flow something higher flow? So the that business? some drive structurally other the is with Or different taxes or else something

Cedric Burgher

course, that, going But and in is is that Cedric. to Yes, is of in nuances part. by I'm then that. generated surprise there we and the other other this the our integrated for the to some part is business, Phil, to caught the parts the But BJ able with guess but have ask offset because to I position. of something going a I'm are income take people of with taxable, domestic come of we tax are chemicals losses that

chemicals anticipate tax some for in a been price We this no low, have we current situation continue position for commodity the time enjoying to at So very business. time basically some levels. the

business parts business. got of benefiting. prices play the caustic obviously prices So affecting the here, as gas and oil in the a you've other The number as commodifies of soda chemicals well you've got the

So your the time think all for out the do losses that and think current given levels, to want we've chemicals sufficient the got to other you But And play we comes then, looking when we've projected that period about into tax projecting the address at piece? income tax. offset you BJ, you.

Unidentified Company Representative

and be from positive, driver cracker fundamentals consumption is for they're BJ at look from talked the are about XX% is was step-changes But little when globally, the well XCPe pretty picker is that talking about -- Harvey, the a the to a Harvey, after Phil. to you and chemicals there we continues to main our positive it's obviously, think aluminium are you Good come that especially that's strong first driven bit the caustic to flow industry, the the caustic the remain very costs further. a market. just And a up But online. look for Sure. fundamental being standpoint, going when both for since And year. This which caustic quarter with X% per the think X% for us you prices I were of plan standpoint, morning, in even before cash for third fundamentals quarter. tightened by in growing

capacity coming down in Europe. have You

And from so that fundamentals when you standpoint. in a look it's pretty strong total, at all

what's driving So that's really the earnings.

Cedric Burgher

want again. just prepared remarks, our I part, large This tax rate. was the really one was perhaps business. we've quarter about in the And it's reflecting is side to because improvements didn't Cedric really what in related. cool made I my in it in give thing part, about But due, mention our was this international cost that it in last operational of effective reductions

Ken about cost him comments to Dillon's and -- with add and to the we've internationally. And those like I improvements us reductions so made ask just feel -- a few

Ken Dillon

operator to X-year X% at by now driven have XXXX. Field down in country been as it's lowest We're in performance. boats work services, to example, With technical worked since story QP, Phil, we X% the and this capital. with is including strong OpEx side, boots, in And cost really a the the low been shared We've collaborative and best-in-class expense. partner then for lift helicopters. a XX% our the the on chain logistics, of monthly performance really team for in partnership. ESP dry gas we have not reductions supply our upgraded up strong state-of-the-art performance lastly, improved very and And to successful reliability, great obviously costs. systems, life. in out it's contracts team and negotiating less next the run in least, really been bundles improvements rolled compressive sales year. to a and Overall, the bleeding also We've

Philip Gresh

one just one, then last Cedric. And

but that year-to-date, below guidance well XX%, tax coming you've the On XXs, the on upstream your in at the foreign it's the extreme remains low least in rate, been side. for foreign

is you or there? be sustainable, need going to that there on is something So

Cedric Burgher

the into there. upside we so recur. rock guidance items and don't be But much But me, I haven't obviously some expect some continue first would to -- something of Well, one-time were we we there baked But but expect more upside operational but improve mentioned that, there we so it hope that there. would not our in course, prepared will that is or guidance adjusted did that the because really remarks on call that improvements, that our see we've also. the it to some were less I in quarter -- their the lifting, via excuse

Operator

next is Baber Simmons. from of The question Guy

Guy Baber

the that has few highlighting given how for maybe upstream the talk and the you're on cost of but with that if billion Qatar, estimate capital the of the talk some So highlighted I wanted last in breakeven changes cash businesses you the the CapEx visibility deflationary wanted $X.X your the sustaining degree CapEx improved about plan years, in start $X.X particular asset but you've the your of But side, spending to SND can side. over have piece few and base an trending your might be flow to towards -- forward. is example, evolving last given curious in international billion years. we a the just to international bit about of pressures over intensity little improving delivering I going of capital your of the reductions here, where

Vicki Hollub

improvements. seeing are We

in over blocks in have we're improvements particular, we onshore has you may in in all field couple that doing already We when to we you we're infrastructure, and so a XD the pressure What X a that down to XX, ago, over that start drill you in that what in have the the international our have years they operations in XD -- we there East. ago. successfully one because survey And wells using long required the seen continued largest remembered, of past really drill can to world. field drive seeing as years us helps time seismic we're virgin your of helping And and F&D. that's is that XX the discovered the surveys Middle XX wells

opportunities, doing other to I'm We it you over and more to provide Ken on we're detail throw going there. some have what to

Ken Dillon

Good morning.

the the just the immediately As year, rolled improvement instead out then throughout improvement whole a in we at a over in seen you the foot, megaprojects example, day. the in and lower rolled last X% What much to Columbia. area XX% reduction for We drilling day, almost seeing per or which of we've foot feet per in essentially an North, across know, foot, program a dollars F&D XX% is, we've per similar now. this And loves East years we're drilling system efforts in costs Permian. region. dynamics we've and per Oxy seen and changed Oman We've very improvement and same Middle Qatar, much in cost X% region large focused few out very drives

wells what where a more terms seeing to using XX% wells, we're fewer less XD international. Basically, we [indiscernible] our have across IPs In the capital. results Pearman, of seismic similar for are we're whole productive of than across drilling planned, Oman, the that

Guy Baber

my follow-up into And XXXX is Permian U.S., Resources on then the XQ obviously in impressive. is the trajectory growth production

tightness what those be about out range and you're laid So hearing given bringing discuss the the with the there, the of heard that and What talk just flows delivery of we're there? others. to The -- to number in guidance. you've issues, Can risks there. the as lower are how comment wide about, want higher of the of on end went timing meaningful increase with New And some then resource Can just market Mexico, the end ramp especially we've the online given in to regarding maybe of labor some you specific logistical or of get guidance XQ. confidence some the seen may timing sensitivities operators? that tightness of the you what mitigating the is we've your services from planned from your other

Joseph Elliott

we respect with there. improvement land we We're appreciate advantage Vicki those I significant well them. there's the utilizing to There's is XD of how and Obviously in seismic, of guidance Jody. This the is a fourth quarter strong taking -- question. as this the one and results. wells step-change the been is Guy, there. stimulate in development outlined plans, Hey, how kind catalysts X

cadence second part this online. wells The of of the is also the

my late up come quarter. enter We'll counts we in there, rigs the well can the in start quarter and on XQ as the you in we going are wells I chart those added first as into see and the as there, go second that opening said seeing comments So and also significantly.

production can is, where So there's quarter, many well -- that production the wells so that -- of make this. the take me, comes the there in. rate, why couple fourth the quarter Those drive a December the we range putting and in the that of confidence lot second it's some reach the on and have XXth barrel-a-day production, One that wells. quietly trajectory the kind X,XXX time about what when difference to wells quarter, how is spread Xst you December of you're with on a peak aspects wide. of big a of rate trajectory, To first or have when that depending

year end field XX% into we're about is drilling, The about anticipate the as XX% spoke other and but I go to XXXX, plants. probably up going the as pad aspect drilling. that Year-to-date, -- pad development we we

are results, makes little all single well pad drilling, ramp-up difficult. a number in quarter those of So but more a one guidance well positive good really that online,

very was the your we of module The The of second around So to way question part module or are pad from mitigation? X risk development. similar modular-based well drilling, question part designs X. one your do

And very it's repeatable. so

believe for we repeatable that significantly. within You haven't into work us We're frac Remember, at do a activities. learning our ramped with have we crews XX rigs, cores get we the it's a curve. well that continue to in operated and headlights capability, have

set spud the cases it sense. utilizing of you makes in intermediate in employ And techniques is risk we cases, where many set Where batch other use pipes. mitigation we to a surface spudder rigs right? casing rigs, One rigs rigs to and

you've in wells, derisks, derisked that a out of or it it want taken problem So critical timeline. if your you've intermediate wreck of those train casing all you before you you it do set to strings if your laterals, call path a one the because

things example. one side, we're cost a that's doing the the of There's side. on on So supply number

in Our supply. that logistics derisk online, and Mexico comes hub New

Guy. appreciate So the I question,

Operator

Brian is Singer Goldman Sachs. from of Next question

Brian Singer

XX, meaningful inventory swap exit point length in When the there, swaps Permian. X,XXX earlier going And or or what increase repeat you on the more your to would the it's X,XXX-plus for average that into I here, position bolster lateral your of to the foot we swap at opportunity about noteworthy are longevity of need to wells, commentary and talk look add to length continuity? permanent lateral XXXX if of on to half wonder the look at the in you expected getting definitely achieved in and first Slide you've that could achieve

Joseph Elliott

I to people said and the to trade we had past, to of year XXXX. that, last the about acres energy value Brian, in core XX,XXX up. we've did Yes, longer think this do industry In we we've -- to swaps slides, able the the you acres XX,XXX drill continue year, already laterals. of being scale There's in see recognize in done

a And land So inventory process there part natural the There's wells There's we of a again, that. planning go goes are in that process, execution that that the I to back good with also subsurface have category. low It's process, process. a but value-based there's is development. commercial of process. a an

go rates to overcapitalize not land longer the you're driving the time up do that to for. potential work hard, which if capital and laterals to to chase of we're set it's risk your then production, could return going the spend not You position the the to and lead but employed deliver returns, will be were on

year, good longer land trades this of a us wrapped gives all to that and process. lot it's that So up we've into be confidence continuing able had lateral. drill But to about

Cedric Burgher

lateral go seminary sum topic, think $XX flat to continue piece, guess where for to the on and we'd to this up right? you see multiyear bars spud, I course normal ramp to support foot have land got would would when oil, that needed what of we plans to go the assuming you've assume to these X,XXX-plus growth inventory about length

Joseph Elliott

confident value land remember, positions I development that's piece have we're inventory long just one approach. core the Yes. of mean, deep. long these based But of lateral

to but now well down actual lateral see quarter. you length just done last our again, to time can There are We continue in not results. drive continue lower inventory efficiency. cost, over we places what our inventory the that updated we the -- has

feet. -- and X,XXX more less-than-$XX category average is Our the went inventory this to X,XXX from in

So end all of steps we returns day. these take at the of better to drive the continue

Brian Singer

efficiency capital some essentially improvements talk whether shift competing or debt more an -- productivity the the us internationally the minute what per that shifting these for that more improvements seeing, wondered degree have international U.S.? available about repatriate paydown I just to have and to then And or impairment capital, can you're wells of is to or collective we

Vicki Hollub

seeing we're And Well, it opportunity-limited really what on value. what will in international. we're adds in not the definitely most depend

see seeing opportunities beyond do. to target, X% get about what have where X% can that our excited set internationally. as we I'm we the we we'll really we've As But a and and cash look the we're what above to growth point at

Operator

Our Terreson comes last Doug ISI. question from of Evercore

Douglas Terreson

pledge as the production direction during I or a and management they guidance to question cash were shareholders just and several distribute demonstrate capital they their some creation. had next the to stock market. well years they competitors, returns -- your and flow the to increased extended they over cases, value And obviously specifically, and year so, changed then of past in five awarded

there free So period is he Cedric is, that cash for so increases. guys as Meaning, think frames to return, return are itself about for But more return too. pathways that plenty your of not for the think like the there I question while and provided improving not on clear I will was was, economics extended normalize to today, take looks probably was or returns so commentary asked an the or it the a far because growth obvious return Vicki of and appears capital? that you I are commitment on to clearly, reason why it pretty of improving, capital care parameters

and you just think is get growth comment -- So I you how returns to on to and of between want the about I balance return. question guess the the guys importance

do you be that, that could would So if appreciated.

Vicki Hollub

very a where the reason metric return the we a point our a have really I certainly little way us flow a not shows last that to from lower a to those that possible XX on do -- lower every that hold bit years. us rate track history for that of the on back a reason record that was loss where most fact exited. delivers this investment that to on and returns we to assets get want make is capital cash we're basis. the strategic decisions important return main we the we need right plan, That highest for the was only employed negative that, that's And capital we now been to dollar struggling but points to replace Okay, we employed. get into -- that say situation The in we margins the has invest

will return that, capital to that. and continue employed So we're on really committed to at our to to beyond $XX flow We're this breakeven going cash to our execute up. go plan get

Cedric Burgher

I is couple like -- reflect Cedric a And would does question, and what add on. the our little this One, ROCE, of Doug, reflective just guide was to we Good. while of that's don't from it, guidance to things. bit sounds it a it's it's and because one pretty wonderful big advocate get gaming a cycle, thing for Doug, on. everything IR of fully-audited, it's you full harder and about ROCE, guys captures but and much sure it -- I'm so the so

of is anybody were we year, to the to get we've long a that never you you for ROCE. for at in the great But the group committed the long a cost course, do. on really here. well the if And downturn business various in that will time, top a difficult to of been metric, for personally. It books. it and metric quartile organizationally, it, was just our as do it's a of is the great really So look if historic we've reflective last is -- of tough a and peer year for because we pieces committed as and it's one long, time, been But in

is we're progress in reinvested, our to we and commitment that's you every it our invested, as As won't where that. reinvestment and high shareholders get and a return forward, in returns going work Vicki of doing dollar so very success lot to said, finding to be

us metrics. continue give And so we peer-leading ROCE recipe industry will or that believe to

it's time to quarter So it's environment year And of -- over tying then compensation intend slides. way increasingly I we year our quite out. our and we that's put in that one last but out our know competitive it up in and something tied that's we to were we meant, a be year, goal, last and

not I'm going aren't can terms that that gaining probably is components guidance do so you sure something get to give we but in ROCE. there. And guiding be help of -- you We'll may

Vicki Hollub

add as going was to more thing well. I one Doug, And

the you that's and bit we As that to proposition. do for now, middle a part development, that know, we've list with we've the also have that the right past done -- priority not be opportunities buybacks That of from a so but it's in gone or highest of future. organic consider but the that in we willing the not something will have priority value away quite and we share lot done being the would our not would

So to but you hoping to to question. just value doing add need the picker understand we're appreciate make sure do we what

are about more close, to say that excited like to we I where to very just our but that needs done. be are direction realize So in we

We have our forward And proposition were growth team in production sustain of This had. our the ability even ever looking teams make quality confidence entire headed. businesses highest better. to where that our we're we've our value to and mongering assets gives management ways our to dividend to them across find continuing are

and for thank go call good you, us. have and So day, our today all, a hope after joining you

Operator

for concluded. now The today's presentation. you attending conference has Thank

may disconnect. now You

Occidental Petroleum (OXY) 2 Nov 172017 Q3 Earnings call transcript