OXY - Earnings call transcript Q3 2018 | Occidental Petroleum Corporation

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Operator

Good morning and welcome to the Occidental Petroleum Corporation third quarter 2018 earnings conference call. All participants will be in listen-only mode. Please note, this event is being recorded. I would now like to turn the conference over to Jeff Alvarez, Vice President of Investor Relations. Please go ahead.

Jeff Alvarez

Andrea. you, Thank and third everyone, for in participating Good XXXX thank conference Petroleum's quarter call. Occidental morning, you

On the OxyChem. call President Hollub. call and with B.J. turn International us today are: the Operations; Gas a Officer; Officer; Dillon, and Burgher, moment, Oil Financial will and Chief President Vicki Vicki Cedric Senior just Chief over Vice of to and Hebert, Ken President, In Executive Hollub, President I

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

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

Vicki A. Hollub

have our return our on have the and a cash Jeff, same deliver executive employed results clearly to principle. XX%. Thank the like assets period, begin compensation on I'd to morning, this demonstrated our XX growth Today double-digit a on during everyone. highlighting focus value aligned capital capital Combined and returns good with industry-leading we the of delivered which to achieved by months, return over employed we've over and our ability last high-quality you,

while approach financial through We the year generate highest repurchases flow well investments which free for enabled numerous cash dividend allocate growing will shareholders This of in two us improvements morning, model business let and walk Ken create guidance. our invest served Midland $X.X President to our and a to to the into remain in you to will Recovery know businesses. production I He the our our results and provides on that Delaware continue over and to wanted the will Oil prior that detail of Cedric to sustainable cash to prior Permian. business to a integrated continue Resources and leading has in disciplined our Jeff XX%. Basin. capital and manner through experience returns for combination businesses. last And significant will Texas share our also units, international by update value-creating and as and us provide Enhanced with just the our in deliver opportunities you Jeff, operations Jeff Investor General updated After future. Our of billion This an sustainable also in shareholders. Manager grow Relations, we opportunities

and businesses. key address more to Permian organizational his focus Ventures Barbara analysis, competitor Low our to Enhanced Gas leading our units and congratulate leading like business. land, Mexico. Oil business. The Delaware, Carbon our Texas is the Recovery I'd Oil work Basin, facing includes on and congratulate Midland is that and update Bennett They Barb And an leading Jeff with teams. our new to Jackson covering highlights, on in Jeff enable and the New us develop our like have Ventures across in our intensely our will to team would Richard strategies will three new role, mention Carbon unique Southeast all along Bergesen. challenges also changes corporate Permian business third of Permian our I regulatory roles recently within Low industry. These Domestic which team taken Before quarter and heightened Permian the

slide financially operationally. and both on quarter exceptional X, we noted As delivered an

we quarter, billion by $XXX of operating flow to dividends shareholders. $X.X exceeded our billion Our the capital third And $X.X and returned cash during million.

Our average since the was achieved XXXX, oil the earnings $X.XX quarter over when price second per highest of of have the WTI we is EPS $XXX. quarterly share

characterization. unit will All In most for date the Draw, Resources, advances best we've Texas investments through of people provide they better the our long-term, the lower the business industry. in And price and the have segments Dunes the online us in modeling These online we exceeded achievements to key these date our presentation. cost, Permian achieved three and information on will Greater subsurface performance provide new growth we have production additional brought short-cycle, targets in well in realizations. growth brought later blocks well area. Sand opportunities. areas, Permian profitable through were to and our Ken made In made Oman, in we the Barilla that in possible lower-decline best

Our produced a another of take result favorable of integrated us business record our market which Chemicals segment as model, earnings of conditions. full quarter to advantage allows

$X.X as announced and previously Midstream Midstream closed from takeaway expected, to And Our Marketing the high business Permian on continues position. deliver our transactions. billion we advantaged realizations

to includes priority the Our allocation assets our integrated across with that our cash high-return returns, investing towards generate free in returning to flow through along dividend investments shareholders cash highest share and of the be continues businesses. repurchases. This

With OXY with the inventory Colombia, consider Oman & on opportunity returns. high-return Oil This growth focus approaches disciplined core Every our is short-cycle period. project and our principles. shareholders, create business. a options each additional Gas we of opportunities three we larger have value our new for of now one an in must in blocks in long-term even

and ongoing both the from the ISND North cash development do from Our and is we'll program replace Dome], El-Sharghi priority Dome. [Idd capital North in we're of confident to flow now our reallocation from so XXXX,

Slide our with as portfolio the our Resources invest X shows opportunities our of grow flow. Permian across serving projects, depth a highest-return which will cash returns from we We in benchmark. high-return

and and also value business grow our oil production. grow opportunities integrated our international, to cash domestic flow. Our has unconventional And which Chemicals from provides conventional from and gas to segment opportunities

we'll XXXX, for allocation. our communicated further capital our provide plan details of we As

high-return opportunities will in flow and cash to increase our $X.X with of $X in we slide to is focus short-cycle year, expect billion environment. on This annual and next XXXX, through level as billion between by to sustainable $X.X of price investment projects past cash billion billion a capital Looking $X X. $XX continue and flow investments highest-return is on to achievable an shown

We to return will our growth production at higher production rates growth, deliver of ISND growth but the and higher XXXX replace XXXX from in to flow dividend remains long-term cash target X% X%-plus. to and XXXX in to

to turn to about Before call I the to discipline means I talk Cedric, what OXY. want over

a did dividend not by our in shareholders. so. downturn in companies or that cut do continue We will dilute returning and have We're sector the commitment honored our to to capital shareholders of our only one our few

the flow and to our can increase cash future, cash flow continue more We more dividend key in which increase to is the we're meaningful of one return our highest-return that investing growth and return in to reasons to assets, we plan so shareholders.

have significant on each of half XXXX, a number price have shares slide X, year of dividend environment. total shareholders. shown we now be call the shareholders over new to I'll higher continue As and capital to Also, not increased repurchases in and oil provide. cap, since a and market repurchased to to billion, hand we $XX value dividend current to us over the our will our is via a a since part or XXXX we Cedric. of our Returning key share returned of

Cedric W. Burgher

Thanks, Vicki.

The our pleased slide EPS shares, at an and with approximately earnings, core continued billion to the Resources across us cash segments, higher core the million. during per we On segment improved all start after-tax sales the were reported per highlighted, at volumes. have non-core Vicki As gain mainly which repurchasing and of Permian our oil difference income to are $XXX I'd like attributed share. allowing Improvements diluted sale to reported earnings in in between of which our main third & to share to and East $X.X of gain $X.XX resulted assets, Midstream shareholders Middle return $X.XX Oil production domestic quarter. Gas is XX, income with quarter on

XXX,XXX representing production third debottlenecking had driven following at quarter XXX,XXX well quarter. international in a was of the from guidance BOEs in the a soda $XXX production demand income the in record costs. a The oil year-over-year quarter flat relatively the higher day, of vinyl vinyl to in earnings million, which margins. margins decline strong quarter of day, million. the increase at Compared is earnings. $XXX expansion flat, Al and Hosn. for of NGL costs, Third from in XXXX were Midstream of was and came Permian one-off differential of of reflected ethylene increase prices to million, offset second end Export BOEs in another which second quarter market our increased over pressure our segment was successful by came earnings quarter. BOEs $XXX at Resources, caustic of quarter midpoint per resulting Chemical third as ethane full to came guidance XXX,XXX productivity driven first guidance core top stronger to coming of $XXX to the the midpoint over capacity helped XX%. end quarter margins quarter from marketed international million Total the improvements, increase earnings production Chemicals under quarter transaction The range third above prices, quarter from exceeded in pre-tax at came second closed approximately the improved realized This guidance. above in of Midstream quarter the processing reflected of the an reported the for $XX.XX $X.XX gas our higher and that were at the Total in which high marketing the execution the due results day, guidance. compared the Midland by to and items MEH the in due

we've excess due capacity barrels. Third of by accounting Midstream certain and purchasing reselling our third-party sales both up by million $XXX grossed cost related contracts the to used were where quarter revenue to and takeaway

working invested for year. quarter remains year which details redeploy begin billion. per our the $XXX capital flow at have updated outperform XXX%. XX representing and during narrowed approximately gross-up $X improved as Slide capital of guidance, been in will capital million. total $XX all XXXX, before to that nearly amount capital continued segments billion flow Qatar. Operating in year-on-year have million year our billion, to full Starting to $X.X the our second quarter, we $X.X spent budget was would we growth cash of expectations, We The cash in of

XXX,XXX to BOEs an day. per We and rate Resources be production for expect to to XX% this total be XXX,XXX midpoint equates XXXX QX Permian XXXX. growth Permian production exit-to-exit XXXX of Resources production XXX,XXX to per QX from of range to to BOEs XXX,XXX day The

In year. to guidance Brent the a XXX,XXX the We to pricing Midland-to-MEH assuming BOEs also to between Midstream, per assuming per pre-tax the fourth expect spread $XX range income have day million we barrel of XXX,XXX narrowed generate quarter million, million date. international we are quarter and the very are full-year and to $XX $X.XXX year remainder $XX. for on our business, production repurchase To continuation $XXX earnings a of pleased Chemical billion program. and pre-tax anticipate including expansion our In of far our share performance we of guidance the fourth raising to this with strong delivered year, results $XXX based close, the to so and our $XXX

we on set our industry. focus and, bar the returns, operations As shown, high have very company our a is frankly, for for Permian our and

We have meet across rates have business and projects hurdle our that long-term that potential. integrated a of pipeline our

it We discipline to stewardship. to believe decisions. these We to the to to lead takes principles hold with have what respect capital tough occasionally and this is continue take

and We will in now turn reinvestment, and continue Jeff. our to we this dividend, to regard, have the repurchases. returns-driven share commitment call demonstrate robust to aligned I long-time compensation a over

Jeff Alvarez

Cedric. you, Thank

quarter for was assets, quarter results BOEs by have increase exceeding continuing innovative great today. Permian outstanding, Permian delivered X,XXX Production of you day. by and to ways I'm to improve value with share Resources of with teams Our our per the to midpoint excited another guidance and find the production these the

from we improvements well Permian These now of is guidance provided the the and barrels XX,XXX of execution underlying day initial assets. Resources the of beginning have BOEs added by the growth. in returns has year. Continued in results cash the resulting production high-value plan guidance production great increased along generated our significant value additional operational high-margin with at per to

development program active and development on more into Draw, we integrated our we the delineate expect In at our field in to Hoban Barilla plans plans. appraisal Looking of our in appraisal results this continued highlights the slide acreage XX, in Greater and optimize efforts our XXXX. bench investments to be

XX Avalon days. We Greater also BOEs Sand that averaged wells drilled day two over appraisal approximately per X,XXX each Dunes in

Resources Permian will us Our to returns program confidence to generate come. appraisal and many flow provide cash for continues growth that sustainable years

well our was peaked third well Greater for results core over XXH earlier, quarter Fly areas. in The As day average brought We Sand ever. of with for our Vicki an BOEs in development day, over per another best Basin XX online both the Corral X,XXX Permian X,XXX record-breaking per mentioned Dunes at BOEs days. quarter

days, that last record-breaking subsurface testament quarter. XX% and we for We X,XXX record approach, for Peck averaged Texas Greater day also broke the the over over are BOEs capability, increase industry These well value-based XX Permian over a results per development prior area well, record Basin repeatable a shared leading the you the in peaked and to per with at Draw which position. Barilla a best the well with X,XXX day BOEs this acreage our XXH,

come returns, we work and there to we our to continue technologies plans. apply development is to progress innovative we about our associated more these believe While excited still subsurface the and characterization as results are

we in Returns $X per operating to the improving. BOE. in less to per EOR our Permian addition In productivity the and in Resources than an expect Permian low exit lowered the of also to are at BOE year all-time improvements, quarter field cost $X.XX

unique demonstrate that the to recoverable. our recovery of We otherwise be oil reservoir not capturing continue maximize ability to by would

across from Permian, COX EOR largest continue initial implement providing expansions enhance further unit, We asset. the of encouraging in this Andres which oil will the our Seminole-San the returns is the we zone new As residual that at the operator results portfolio. initiated development to

and oil production OXY. We growth. to core many differentiates in areas enhanced enhanced capability of to in close by recovery investment I'll summarizing our our plan position approach returns and business. the this XX expertise leverage Our slide generate resulting on returns-focused

year has While is this returns-focused Resources challenges industry best many to our Permian approach. ever delivering year, been its our due the confronted business in with the Permian

wells XX top period. wells the time total over We of have of the over delivered X% while the Permian drilling Permian XX% than only last months, less that

Midstream assurance business and our are disruptions development protecting is our we maintenance and hub. and pricing marketing exposure providing logistics through Our and flow execution inflation from the to arrangements, our best through program

as us for strategy, advance with Our options provides our and high-return inventory continues to improve future. execute which sustainable development the we investment

Permian high-return outcome International. call over provide. expect grow and to turn We investments that to an XX% our assets our over next year, discuss will which approach I Resources Ken the of at the now is disciplined to

Kenneth Dillon

Thanks, good Jeff, and everyone. morning,

I a saying by Let performance. how are with detail me discuss to we new standpoint operational to Overall, an in blocks be in quarter able a world-class today and three honored start we announce in will minute. financial excellent had Oman, more HES which from

billion day. business International the target XXX,XXX free In XXXX. third is cash for of to Our realize per we BOE $X.X Upstream on produced quarter, flow

outlined OXY to We expect strong performance plan continue of The is this partners. deliver as level we projects high for return we for well. our and progressing XXXX

peak rate for value XX% TECA has This one example Our The enhanced to of for assets, create executed our with a is debottlenecking month at we of how as by the and per day increased net. $XX project Ecopetrol. partner this Hosn Steamflood we only returns million. our was XX,XXX debottlenecking production sanctioned Al existing innovative BOE

We will production XXXX begin day a in up of reach XX,XXX ramping BOE rate gross XXXX. per and in

develop which how Colombia one to for major is reduced add to XX%. step-out costs. at at XX% are flow million our last cash approximately programs improved to parties. dynamics with exceeds assets resources starting we by year TECA long-term identify performance will our of finding are barrels is price OXY $XX our the in year. XX both disciplined With and added on low approach using generate additional breakeven hurdle attractive XXXX, this under track resources a This XX to to potential drilling example our Internationally, can the the working This drilling high rate addition field, areas of growth. have by in since million in of drilling our Steamflood suppliers, our barrels we of WTI. just continue with We returns projects, and costs Overall,

Cities our and in with announce production to in We're Oman as expertise that first now two-thirds Service from returns wells new first in in the made very today XXXX development. the the and last and discovery we X EOR billionth barrel XX coming blocks X to years. we our more three flood Oman, in excited Moving XXXX land in produced oil water Oman, which Oman, of drilled with In position exploration will fit in to the double perfectly acres our approximately of XXXX. generating than million

on of our Northern our infrastructure opportunities maps helped horizons. OXY the (sic) in our development we've the characterization stretch In appraisal XX subsurface see allowing XXX and XX to a in upon [XX], slide As as Oman, over of to enabled you shown time contiguous redefine acreage acreage move Blocks Mukhaizna and leverage to next our see expands on over us of from XX XX Block the greatly and from horizons productive position XX. short has will us XX five period where [XX], This appraise, blocks, reservoir producing explore, as we existing use slide can with stratigraphy. develop (sic) Oman miles, expand existing door. success the central to we workflows,

apply approach the the same will We new blocks. disciplined to

We next our significant development targeted optimize when have modest in partners, appraisal These country. leadership exceptional the we for XD be inspirational will and shift blocks in and invest data staff, seismic programs. with future will especially excellent Omani year potential, as and Capital acquire profiles. combined

value say continue. bring I operational being to will our fully the our it believe experience In with time Thank our and of when proven We that record I'd potential back track market leveraged. closing, in call expect development subsurface and the term future now to like regional We turn excellence rapid Vicki. long that creation, you. will now to to approach is value-based combined opportunities. to

Vicki A. Hollub

Thank you, Ken.

Before we we'll to reiterate like to returns. sustainable move Q&A, the deliver industry-leading through value which continue to I'd OXY's proposition,

across business of the our opportunities generated benefiting model segments. high while take value Our Chemicals from and Permian internationally, integrated cash us and flows stable and the the enables from advantage to chain Midstream in generate returns

addition accomplish has to exceptional and the will wells in our facilities, in development and delivering life capital what our Permian, beyond cycle, We've years. excellence. recovery, last targets, invest us initial and employees the entire operating the enabled our in the more to culture best enhanced with couple human is than of performance We in empower to wells innovation exceeded the through experience and including continue that's to This second our none. their over their

resources and This meaning spending plan, can X% at WTI. achieved committed developing X%-plus. place. sustainable dividend only Our we will Low And $XX to development the which quarter capturing of wells, carbon $XX enhancing our cash in sequestering is a positioned prices. reduce reserves. in we emissions grow while realized market advances toward breakeven is our our production realize to in flow we maximized our to while capability efficiencies, and Carbon at our remains not We by our developing through making Last to will WTI, business and within cost to Ventures economic deliver plan remain pay anthropogenic COX, neutral pay and flow. OXY dividend but manner also be our operating uniquely at cash products

the this dividends highest over investments Since to Our repurchases our allocating to returns across XXXX. repurchases through our share integrated business through year, have of resuming we and the our dividend returning with free share and capital relentless returned repurchases. flow end $X and to will focus share program shareholders cash shareholders by billion remains on

work, for and industry-leading to focus questions. creating Lastly, margins. on value open planning, through continue your across we up our focused long-term operations life businesses, maximizing We'll now on cycle technical it

Operator

will begin We the question-and-answer now session.

of The Please America. Doug first question go Leggate will come from Bank of ahead.

Doug Leggate

secondary Qatar, from first. I really on the Hosn. comment I And if to Shah – XX% or reallocating I two but I had Excuse an actually to government just year Obviously, I'm of apologize. capital I for ago, I've that Guys, – pre-FEED but understand from update everybody. you debottlenecking a the have please? one got wasn't is gone something about questions, my about can like so understand sorry talked question I'm somewhat to us Middle project around wondering the project, you've is appears expecting you, be may. Thank Al first piece that My of the development. where if stands, as done East. give Shah About me, expansion that the a quiet. a

Kenneth Dillon

Good successfully plant. It's We've Ken. the Doug. debottlenecked morning,

to But for overall. no future. to near ways the there look We the plans are at the continue in debottlenecking plant tweak full-scale moment,

the We will no commitment. different all moment project, the of work aspects continue at to but there's

Vicki A. Hollub

expand X it We're from really being day happy a a with to BCF only million investment. with able X.X to $XX BCF

with project that put accomplishment, that other a on bit So the hold.

Doug Leggate

I other in of more it assumptions I'm in Southern assumptions your is what profile. XXXX I what over-pressured what Are that growth? just productivity? going to the and over trajectory that's what you is lie a Are some embedded Thank looks Got to follow-up your to growth trying mean there. My don't And productivity? I guess using take leave it you for Thanks. take done your in know guess, transition this you've it, things guess Midland for I'll well is the Tank Lea using understand. begs were embedded fact area. Jeff data all like it Red over who back And of The does regions, in Reeves, the forecast? that. and Eddy you to with one. in understand moving behind clear, much, I if asking XX% and Permian, turn But obviously the this be question I'm I to could wants longer-term I the to the

Jeff Alvarez

Jeff. is this Doug,

starting in. you a in into tend that improvements in our we've in We've performance. think improvements is additional of come expect improvement future. built We to year, are additional that Definitely New Mexico in to look the little see talked going built we've some areas. before, when XXXX to I across next performance be just development conservative we XXXX, definitely we've recent our the in to about where seen

can through but New not in and done Greater You see that Draw we've beyond Barilla that. just what Mexico

given the those continue. to continue teams expect when foundation so the look to we growth methodology, next the out, conservative that have percent we making, are improvements Where that those currently is a which year So point. aware subsurface that just and XX-plus many work we when in built But improvements all improvements of things we're of you the is we we at we've to the little expect get we're the but of. to haven't we figured out

Doug Leggate

is be to rig you count, trajectory flat that with goes a count that rig Just trajectory on clear, can XXXX along there that is a us outlook? give or

Jeff Alvarez

rig It's a count. flat

Doug Leggate

much, Thanks stuff. so everybody. Great

Operator

comes Brian go of Goldman Sachs. question from next ahead. Our Singer Please

Brian Singer

would from the Can you slightly of $X morning. fourth operating per specific above quarter acceleration as what quarter, in more in to an in BOE good QX the in down cash to relative you, talk $X reduction below saw Thank drivers third that QX? the we getting be versus Resources cost cost Permian especially

Jeff Alvarez

I this is Jeff, and Brian, the appreciate question.

big drivers the cost components. cost there are there's BOE, that, side. So two per Obviously, the of

effective them the standpoint artificial downhole right getting finding from lift, cheaper look the for doing things faster. then at the they so do do lift an very fixed when lift We're details, which artificial at And and seeing because finding to maintenance, our wells. horizontal you getting like if come systems things better high-rate see can systems. downhole And lift maintenance you fail, we're our much artificial cost things down we're from

So one that's area.

side, the do the from start into infrastructure If recycling we at you water what side, look these place, to chemicals off start so we that in to all need the initial we translate where our fields, trucks side. cost do to on we're road, operate how the doing getting developments things the planning,

the is more We're making The of making second a We're barrels. part that lower-cost barrels. obviously a more lot component barrels. lot

of cost on, barrels, drive lower we're well. about. legacy excited down area you at bringing cost that's much BOE one helps very these when that the barrels but mentioned Vicki per new unconventional as the barrels, high-rate look so than it, And So that we're they're the

area not matures, core it EOR business we'll just excellent done but our by that's unconventional the further this think the a good to development cost, capabilities one and we've based what built, business getting operating that when on cost that. and As to in and use be we where differentiate testament comes we've I think able margin, is ourselves to

Brian Singer

Great, you. the is allocation regards cash flow. thank my then with And follow-up to of free

where returnable for for that's You've about or was think highlighted to what redeployed. excess as what invested shareholders? talk that new to mentioned with be any going, the XXXX. you projects case to the tangentially, going dividends to Can And maybe that that regards flow to well or And out were M&A you you of when cash in Colombia from just then portfolio, needed Cedric allocation, needs million the free $XXX advance more you the Oman? either would making have see been point if via is in Qatar versus and to is

Cedric W. Burgher

it's good of a to the question. we're what heart A Brian, do, but allocate question, in to is trying Cedric. It's the at very which there this to the very, lot capital best whole places. is

that we know, and and look a reinvestment. certainly opportunities continues, dividends, there. you has have history at As something long we part which a fairly is also today been between DNA OXY's we a of M&A diverse continuing and are of approach, buybacks,

opportunistic the doing what touched on consistent what and our the touched course, we're but what opportunities, call. money rate even we've each the Permian dividend for been approach with more doing. and each so quarter. faster But to how in a look and on we growing as Low we'll that's it. you plan and we're forward on it at and So EOR of got very look with our going to Carbon the just far better best here But really continue Ken decisions to strong, those see buying make And cases. is those the be put and organic of very lots will we've Ventures. to is do shares, It's we've places getting fantastic But that's We go it. Internationally, year.

Vicki A. Hollub

shown And actually we add up grow $XX I'll to before just that that. to We've can to X% X%.

But more can we the with I analysis that ourselves or time, in either and when And growth, back or to consider That's had that up pay opportunity dividend prospects. stacked to that we've meaningfully. the accelerated and are to to growth, is shares Oman $XX, quality what why to funds stratigraph to to grow is from have our the over flow to some seismic put will increase position buy international the we very a try we showed The choose of for reason horizons the interpretation dividend. from. early say So the use lean continue is grow to cash the projects accelerated we This $XX good picked Ken it's stacked in pay. showing good. just that the respect

achieve today ever hopefully improve better upon I'm a fund improve a the we So I'm about respect more – than ever really of and better think really have with confident about you feel that. That's I now. prospects certainly continue cash projects the in organic to and been. It's why to develop growth and than the provide continue provides we're certain And with that technology excited advance opportunities But in even assets pressure today being to off ability so position us grow our I XXXX. to to to we portfolio. that it's and flow. felt a the numbers I've excited for where we we have lot within that able our We're in the many we've very Oman ability that to of lot are wanted to taken it.

Brian Singer

you. Thank

Operator

question of comes next Our Sankey Please ahead. from go Paul Mizuho.

Paul Sankey

to? illustration In an generate. Good was aspiring growth kind assume growth, Vicki, dividend morning, or think. provided at past Can at you'd assuming everyone. you've and I you planning the the I in that you in be an to as dividend cash production here of about through rest Do The wondering. with of you're this would and growth line It feels $XX the buyback? do you $XX, upside $XX us like kind what flows talked XXXX. the illustration indicate the of company I grow dividend Thanks. that is of illustrate you'd regard,

Vicki A. Hollub

a go to this to is we to we're and future. way cash the continue that price explain, this, our as $XX bit grow model will point cash little actually but we neutrality flow the want neutrality flow, to our means is that difficult cash down. The really What it's into trying maintain

flow to dividend accordingly neutrality. that As we it $XX maintain we the the goes grow cash down, intend so

that to to to grow don't we're XXXX part our significantly that enable continue will back increase we that that's shows really so put meaningfully to. will that done than growing an neutrality, cash time. what ourselves dividend years. back past so the flow way be want in for we that place cash above trying in And flow us our through few the So we've the that targeting That's We above in providing is a proposition. why the to keep option what cash us proposed to $XX shareholders buybacks more we're dividend over to model the come of to

Paul Sankey

so X% increase something Yes, if dividend a would $XX would around that, we assumption? for looking annually be we a at triangulate

Vicki A. Hollub

we But to the what model, cash again, time that and flow flow. that would would When would that over cash see that sustain allocate something from we free flow is you that beyond cash your it free is able you dividend to on model that so be be growth then XXXX, out period. Potentially. depends what

Paul Sankey

us? final such in question. you quarter, can period else Thank which past as couldn't about realm I pre-warn can of and terms in with insofar And were the through still we Qatar as On you just you. my subject with risks other potential you saw is remind anything just it. you highlight that understand a It's negotiation, shift separate in PSCs over the in that of could happen contracts? that a XXXX Got

Vicki A. Hollub

have in expiring be has PSCs. that to would long projects, extend actually cost, next they're one No, about worked in South we and have ISSD, three of see which the else what expires win-win we nearest in The – we and anything seismic, on with that which in to terms Dome right lower is in know we potential. we us. we are. the for onshore, why But That's Qatar. we hard this that good term. that's the us Everything to ISND. We blocks so would is a production even shape today. get we're about that. and we have have pick good right they're really really in about. have really are that's what where I comment able now that Oman that would to that not That be Qatar don't material into to everything but we're good But turned we've feel the low And else been we XXXX, next I made very was bolt-ons, those up feel in term to

higher cost went to cost but asset field new infrastructure. we mature development, a So from lower and near

really So, good situation we're today. a in

Paul Sankey

you. thank Great,

Vicki A. Hollub

you. Thank

Operator

question ahead. Alliance Please from comes next National Our Leo go Securities. Mariani of

Leo P. Mariani

on explore Hi, prepared on further a Oman here. interesting you remarks guys. guys to little it. bit Obviously, I some had wanted

some talked about and lower-producing Is blocks? the here. or I'm fields, just in is enhanced certainly sense high-level of Are opportunity sense this just on a opportunities. there of to can some areas? to of try a Maybe EOR already a to some the these characterize there play mature here. maybe You recoveries exploration more this certain But you better bit risk profile of get get a just some little production rank trying

Kenneth Dillon

Ken. It's Leo. Hi,

used that XX, If you that blocks with. we're our look is to close so the for step-out wells individually, as Block formations XX we to see at very Block dealing

a Buah and capital, giant look lines with XX divided south. this north, XX, we trend discoveries look high in start wells, XX like a some our done barrel in blocks we've as on also very got areas essentially a possible, we got in on at you really, we Block really we with late hundred saw we've that stratigraphy, few potential The the something, of north work day Block but put really, these the And Block it is is a Oman Cluster question If Block The see pails and beside in of blocks. how really look we've seeing that, seen got trend XD XX we we've a and development so zone X, get Low step-out one what recent cheaply looked at next size drilling our some further Mukhaizna crew have been terms We're where X,XXX that a recent so Block field. not existing do thousand zone north. XX well quickly XX and And we appealing, then now seismic the blocks, in seismic the a also the everywhere? plan dollars we'll year. in if the that you we've penetrations seismic it running of that's got run does in in XD over Buah a can in with wells are as it's into There north. year, clusters running running there well before. has producing Basin. produced a Delaware an calibrate area dollars,

we the because get great with these So stuff see we can too. our on proximity with our really, of existing committed and And program, step-out real to partners projects opportunities and real there, to staff familiarity really Omani our opportunities We really facilities. quickly. see are

for here see we opportunities So us. holistically huge

Leo P. Mariani

that's right, All helpful very color.

just to to a I just the characterization a make and results again wells. for little this impressive continue more guess here Just quarter, to you was get better sense. here. just trying switching I wells guys here a Permian bit bit better It's But I'm of in Basin, Permian. looking very the record high-level gears a

that you use I a high-level this down we to if Are fourth was be improvement? sit you was think the I a Is guys just road. further later improvements of mentioned get or inning? Where fifth certainly to analogy? the could there perspective. towards trying more You baseball do the innings

Jeff Alvarez

That's especially to, you leaders we they've I'll have to and ago. one results, back Leo. take is a got But Hey, we go Jeff. continually at this businesses, great transformation of some these because years question you the these back. thing initiated always point. almost This probably ask the think Vicki good to stop four ourselves,

So the we every things come a capital couple with day; now amazing. I allow if are sustainable data where development economic the Inside done and truly corner tell the human us ago, to really block you for it's like building that Aventine; but years, developing which the at doing, we're primary culture like that foundation and you're us long-term technical business planning, new successful there into subsurface the the excellence quarters over four years like couple technical last that the last thing the is in things a turn look company, the saw then what and seeing analytics, over externally. elements this. we've finding built other in be things more value take we're to always improvements was think really And many excellence, the what turn returns: I'd is subsurface while you which we've like

areas. We those all to in continue improvements see

predict all you the is they strongly people those happen go future. so very a think yet, makes and us we when is see don't actually that but do continue feel difficult, definitely is the improvements you doing go that near to in to rapid this pace. that's ability do improvements capture And So what that the those stop haven't work, to to about have they to been capture to want and that the very they see at able anytime

in doubt in well a quarter. So happen about different Sand record I may be I we'll think improvements talking areas. Dunes every the

productivity. it on area be come well maybe come a and that plateau, But where all Draw different or they'll New of You'll or the start of see improvements different area Barilla Basin, the is, in to and instead that of returns may may Mexico or wherever costs a value-driven. Midland

the that. a period at I value think operating creation time. look a EOR it returns mentioned very standpoint, long you going to for from after when improvements So are happen initial Vicki of And development then capability, and all

do don't how more going shift in value, be how to we higher near do But create I the future. around anytime we think get returns, think I will centered and they're they'll improvements stop that. all to the

Vicki A. Hollub

to add could some to the But start them our to the risks, that group data didn't credit do and took the they with importantly problems we We team analytics we engage haven't that not things works things a and how that we use to impact business gets the is change our did we tried employees. solve, and subsurface so they dramatically do and is mentors data team go our to to with through our off that and that before, on only standpoint when to working that let issues. themselves get that empowered opportunity they another for the to develop and we from to longer-term we do questions to need. this all do, employees try I'd need, the things directly that incredible work take needed that have employees. to do of differently, most cost that We've but with technical thing expertise all by need and our some On that to analytics the the too characterization, what now. just we they downturn, that like structure our that view during top those our the business on of were goes them do and lay also empower them this subsurface, internally didn't felt others things but and the aggressive to the units guide units, the really need external

it's the just not improve that the the driving we to a the not portfolio and things. But things but that really value problem and And of a value our a it's meaningful toward lot importantly, success, our production people toward drive deliver. that's of most combination so collaboration of solving can of

Leo P. Mariani

for All right, thanks a lot color. the

Vicki A. Hollub

you. Thank

Operator

ahead. Raymond Molchanov Please Our of go next James. question from Pavel comes of

Pavel S. Molchanov

question, for taking one the just for me. Thanks

the high about your just address reaching One year. of be production quarter, this high still get keep the XX% that rate you probably how the Can your rising can the proportion proportion in of mind next one-third investor and dividend story concerns mix, past is decline in sustainable?

Vicki A. Hollub

are assets we over We our so can and Colombia higher with the dividend decline. know Oman we were is the our valuable about are that But reservoirs when there's or Or and opportunity these they assets can what with low very mostly, enhanced are decline, our oil deliver of deliver essentially so growth recovery. that they what's Abu we that conventional we time managing for Dhabi the both there's – that's opportunity the the have. think

to maybe be was where to just and gets to part comfortable referring again, is this – and happy waterflooding. why is either back will opportunities we more said see going three perhaps of on the are manage that's growth COX. when on with But forward component gas going the blocks with today. some base we what Some Others be miscible business to along I'm specifically or saying these the conventional that I I'm so it's important This will of critically to I growth deliver have the these what our of stress for existing decline. based potential. the These help with the us the off we taken our blocks seismic, develop

Pavel S. Molchanov

ahead. Right. Yes, go

Vicki A. Hollub

going decline of part respect is I the Basin the A Permian to just business. that. what's Resources add to wanted too help to to with there our in

look full like and that into development. on have what We would the is injection field establishing multiple and successful. shale, performed technically on tests pilots a COX working now that We're from

So hand reservoirs to forward already, that two offset from Carbon going one in industry, that conventional actually is opportunities to our along And another is that us shale will not is use COX and the business injection to decline our a give online. larger and will the we out anthropogenic it this one where well. play but for that come COX in will in as take Part we're captured have team, Resources opportunities currently but just us Ventures of injecting Low do opportunities are Permian, team bring our looking scale. in which support for on what with gas believe that

can to another that continue So that we work. will That's way lower our decline.

Pavel S. Molchanov

the color, I you. thank appreciate

Vicki A. Hollub

Thanks.

Operator

from JPMorgan. question next comes go Gresh of ahead. Please Our Phil

Philip M. Gresh

My question think first lost question. Midstream do guidance taking thanks from Hi, the amount How between from you then now the around and for just and about XXXX. and of Qatar for CFO Chemicals? my is

Vicki A. Hollub

prices. This prices, that a was soda why cycles sulfur variations in going variations is Permian, our really put Qatar now respect because plans knowing have design and but with our plan have to in differentials going we're programs in we we we're in place, caustic the headwind, the to to

down. with that So we around plan we things generally conservative and those to and be plan up that, cycle pretty

that at So pricing. certainly conservative we've achieve put that with and assumptions can forth feel on the for $XX XXXX program we we that

Philip M. Gresh

in so said this. guess run to Okay, it's million of $XXX you was CapEx about trying there's CFO. your said flow, there's I from so of some I I just with like XXXX going Midstream and you numbers million differential down $X.X maybe the differential free seemed cash that's assume to $X it And your sensitivities, billion million assumptions. on $XXX the $XXX Qatar

So on get normalized of growth you that. top I a chemicals to be was it and of between CFO $X back calculating to billion approaching backfill place, CFO the then might that and

Vicki A. Hollub

starting year. gone had the this No, and important only would to cash will proceeded be But the it be respect that averaged we flow next reality assuming is the flow, is operations would with what XXXX take not what's The up, cash differential XXXX. the in we for us of but essentially down. for ISND, the we're year pre-capital have from assume gone The to capital flow the replacement cash post-capital. have to $X the differential the with

didn't models, our to in So we have that. replace

going not calculating. gap we to a what us was going saw be there you're as big for So forward as

in So essentially, for the the Resources and and international Midstream and that again, though, And growth also from Marketing conservative Chemicals. assumptions growth. comes the of replacement

Philip M. Gresh

I on embedded it some of international growth flow put if basically growth Oman, the can in XXXX, or will there you there with and will If be the just that prior portfolio? between guidance, be Permian, in we come questions, the where will now other all thinking of cetera, be some you in the Okay. together from assuming are should cash from growth coming is et the follow that up the all or your blocks

Vicki A. Hollub

period, What that we four-year or about can say percent. minus couple is the be plus CAGR would Resources, there a that you over for XX% could assume a

rest from come come would of oil Permian what Oman of the the be in plus Colombia would that combination and then opportunities. assume And Resources. would that So production enhanced from a the growth recovery

Philip M. Gresh

Okay, thank you.

Operator

Bob from of comes Morris Citi. question next go Please ahead. Our

Robert Scott Morris

question Jeff. a you, I Thank guess or for Vicki either

later out WTI. your at being the assumes add growth look and accelerate currently the were you plan flow, already in again a land end count for assumption it year now $XX the assumption growth year of cash that to you the what that look to than rig double-digit Permian Basin, XXXX. rigs you XXXX, X% the This much As flat forecast in about assumes pretty basically total with dead-set growth next company. able and in year per to you're barrel accelerate up would perhaps oil in original $XX XXXX being for was into your the rig at the you flat a on to or if on to versus with looking through WTI, back XXXX? are growth started XXXX is dialing higher keeping But counts what higher WTI rigs few a year And prices X% $XX then

Vicki A. Hollub

it. we're We'll the board the into count something putting what out information with rig more on going dead cash capital be But plan next we have $X the with $X.X else, We're billion would to go directs we're to seeing to our in stay we flow. roll rigs quarter, billion respect same going that in to flat unless now, XXXX so the from today. our together we'll that XXXX provide within you now. We're right because

Robert Scott Morris

dividend going to Okay, lot not so definitely higher XXXX? accelerating and oil share cash in incremental that a buybacks go even to increases prices, with is or activity to

Vicki A. Hollub

$X.X In to XXXX, set capital is for billion our billion. $X

Robert Scott Morris

Right.

Thank helpful. you. that's Okay,

Vicki A. Hollub

All right.

Operator

from next ahead. Cheng Barclays. Paul go comes question of Please Our

Paul Y. Cheng

give know idea? it's out the Can you work it big How I on they as that program can us support? Hi. Did expected? some you Good Vicki, early days. afternoon, guys. Oman, is

Vicki A. Hollub

I'll let go take Ken that. ahead and

some the for which on from has of what Ken modeled extension depends that our out opportunities program. think growth, I appraisal we really find

for to what more. going I'm our is to capability but to our within well fit you sure do think I want capital lobby Ken, Ken exceed going that? address will budgets, is

Kenneth Dillon

assessment. fair a that's think I

same of open the slides, area As you we XX, soon showed from substantial. in with a XX. the will up very quickly. fairly is close possible Cluster can very inventory that to Block Block as see XX to It's existing as of Drilling close one number Block wells in block; X our that

I do so. So have think to with Resources, got we inventory Permian I to compete and the we've feel

as So performance trying be on said, Vicki we'll along knocking coming the there. to door our drive

Paul Y. Cheng

think be I guys on you're more so slow the Ken, year. you acquire going pretty mentioned spending to next seismic XD program year, will that next

timeline of can milestone or kind the we on what that can that maybe benchmark any is – we how or use So there progress? use –

Kenneth Dillon

have I the it of that over which we'll we think some areas, quickly seismic if look at reprocess. most you XD existing

operators some other seismic have shot the have also that We XD overlapping area. in

obtaining moderate is in capital. then obtain can some if being to year Frankly, Cluster where particularly to drilling drilling we position seismic, expand able and next next new year we're low we year, around So X. reprocessing, XD following can access appraisal, program those a the seismic, the

only partners So not are a want what thoughtful value us returns for also. add to our approach, for disciplined to but the government and for we

Paul Y. Cheng

end you idea better resource could from So you will much how have that on of a do by standpoint? the that is you a next the program support year big think that

Kenneth Dillon

Absolutely, absolutely.

Paul Y. Cheng

about? the of XXXX, say, may program is we're of that it rig maintain what ever be And same kind by Jeff, as terms Permian, if guys provided, we in to going the Vicki that or have production talking you today,

Vicki A. Hollub

have do that capability much international same now Whether to at to we and really CAGR other grow know the would XXXX. we opportunities. the pretty the and on business We between not or projects see continue depends we Resources the

to can depend what but tell do whether have at that's we're would I the going what that So capability, time. on you we we see

Paul Y. Cheng

$X.X or several be years terms will to say, And billion to will that, maintain be you of that to in subject change? next CapEx, billion trying over the also $X

Vicki A. Hollub

now and we $X.X between CapEx to and billion expect between $X Our be billion. XXXX

Paul Y. Cheng

Okay, thank you.

Cedric W. Burgher

or better it environment $XX assumes call course $XX. of a That or

As moderate. to times, be volatile. growth And that the said many disciplined and we spending and our to happens, will within our $XX to very intend intend the can oil. But it to all keep cash prices dividend And within way falls, we've we cash down are flow, take if if that spending we flow.

Paul Y. Cheng

of guess is does I set. are But above understand. end staying the XXXX will dead pretty or $XX the up that range, looking also growth, I a survey be program lot opportunity Vicki at substantially the that said already the asking people that you if that say mean prices to guys

that about the you're commodity if environment to spend is how or beyond that still going price going billion, does more program? So XXXX, than mean you're the better, to that $X.X to that stick

Cedric W. Burgher

out. how of in outline would see further environment broad we $XX a given a things We've

you've we a would $XX, a think above definition, greater much and go in us that speculate I I this wildly already, say, different last above just certainly to on too spending But program. early that seen it's to buyback our I with weren't substantial to think it far environment environments. would price a to like certainly, it's too price quarter, look more today. with complement do lot we early

Paul Y. Cheng

Okay, thank you.

Operator

of the any Vicki to for conference like remarks. interest I question-and-answer session. turn to over closing concludes back this time, would the In our Hollub

Vicki A. Hollub

thank our better. excited want get just questions continue headed, we're opportunities I your We're you to where say today. for we'll and and all to about increase

all. So thank Bye. day. you a Have great

Operator

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

disconnect. now may You

Occidental Petroleum (OXY) 6 Nov 182018 Q3 Earnings call transcript