Occidental Petroleum Corporatio (OXY) 7 May 192019 Q1 Earnings call transcript

Company Profile

Participants

Jeff Alvarez	Vice President of Investor Relations
Vicki Hollub	President and Chief Executive Officer
Cedric Burgher	Senior Vice President and Chief Financial Officer
Ken Dillon	President, International Oil and Gas Operations
Oscar Brown	Senior Vice President, Strategy, Business Development and Integrated Supply
Brian Singer	Goldman Sachs
Josh Silverstein	Wolfe Research
Devin McDermott	Morgan Stanley
Phil Gresh	JPMorgan
Pavel Molchanov	Raymond James
Leo Mariani	KeyBanc
Doug Leggate	Bank of America
David Deckelbaum	Cowen
Richard Tullis	Capital One Securities

Call transcript

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Operator

Good morning, and welcome to the Occidental's First Quarter 2019 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Jeff Alvarez, Vice President of Investor Relations. ahead. go Please

Jeff Alvarez

Good in Allison. and you thank Thank Petroleum's morning, First participating Occidental Call. Quarter for you, everyone, XXXX Conference

over call turn Officer; Business Integrated a and Ken Oscar are Development today President, International Executive and Senior with Senior the Gas President I to Dillon, President moment, the Operations; and Vice Financial Chief Vicki. Burgher, Officer; just Vice Vicki Chief Supply. and Brown, call In Oil and will Cedric On Hollub, us President, Strategy,

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

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

Vicki Hollub

unchanged. our first, Jeff, our to we the everyone. to #X priority. and good discuss to shareholder Anadarko, commitment that achieved quarter like continues by Creating acquire excellent remains that I value our in But plan you, we many to like will reiterate results to I'd address. recognizing which would to value be first and Thank start morning, proposal cover our proposition the

results, continue operate. in and area to we be integrated leader Our each is delivering a we outstanding business

returns returning delivering to cash shareholders, dedicated industry-leading We and strategy. executing our our are to

And billion all generate knowledge and the Basin, returned is of results more capital did through flow from to shareholders, to generates operational we in data million which is repurchases and clear: our of returned Since deep business we and term, and free our low quarter, first and segments. get from Permian expertise our unmatched. cash value the short the driven for $XX dividends future long continue well we've distributions. subsurface oil our $XXX XXXX, wells by the high cost. assets that. development In of productivity our the share just We excellent X During

We any geomechanical modeling, and top time same total the horizontal completion period. parent-child of the well and our in are is of rapidly breakthroughs XX operator, impacts. wells advancing drilling only in unit and has the driving which X% whilst flow most the spacing, of delivered over design the Permian, Oxy mitigating wells XXX

to with ventures acreage continue our X future Mexico. new delineate and for from development different also in We outstanding ventures results New

extends Permian. leadership far beyond Our the

on as fields, old international the We and have the and value a world strong budget. around on a of operator, time delivering reputation maximizing new projects major low-cost and

last excited grew Oman, shareholders. about gross and more the Over Colombia for will and We're UAE and for impact breakthroughs of recently on and year, proposition these implemented East, the by a design our the in future is in our a Middle new X.X oil our the have total improving development which these greatly will returns million acres, Oxy position plan. generating our we value enhance partners. completion We assets over

We Midwest of engagement making use unique project industrial while carbon the support that progress by capture we to our reduce capture will motivated the our emissions technology in have advance policies COX, of opportunity. the Low partnership significant future. EOR Ventures to and can that economic impact project look amount sharing of are this total a that our This in industrial is more operations. the the our this of We're details of and development forward on currently business Carbon also anthropogenic reduce carbon and working advancing footprint and take carbon strategy enhancing begun Our the sequestration technologies will capture on emissions carbon to which advancement help reserves. COX reducing promote and through

plan report and made provides want which climate and this to month, Slide significant progress X, strategy. long-term capital on delivered details the our release of in our leading proposition on also our how We On sustainability return XXXX we've highlight to XXXX. climate I further on value return

on ability capital capital our cash upper quartile on XXXX. This at peer employed achieve was both the our we've high-quality that XX%, XX% evident and performance we generated to in returns through assets investing return highest capital employed XXXX, higher best-in-class versus Our employed was as group. generated also an of significantly on than return return since

to business to we the capital we'll quality returned providing strength No the billion has of assets share $X.X reflect shareholders of more repurchases. addition, a our incredible and employees. group our model, shareholders. the commitment achievements and dividend of the consistent sustainable quarter, proposition, our of have to high than acquisition. first other our peer After integrated of our through we our a return discuss company sector-leading such our in high These record our of our performance finished value review In

So call turn Cedric. the now I'll to

Cedric Burgher

Vicki. Thanks,

perform as to three segments price commodity first business we per despite the earnings had continued lower of share of For quarter, reported well $X.XX a all environment. diluted our

oil at guidance partially pricing and along day. per Resources, the NGL shareholders first in XXX,XXX as we for primarily carbon quarter sales Total contracts. safe dividend of well in by rates gas, Oman, strong by Deer due and have Oil the very productivity that All board. end contracts, our million We and at lower oil reported volumes first the lower quarter, operations. core cash XXX,XXX continued liftings. quarter day across natural facilities BOEs the crude, pipeline offset due with was various with the received on realized operational returned quarter guidance repurchases, in production first guidance agreement to to favorable to the per best-in-class Park, in which at adjustment purchase sharing as third-party of prior Earnings per in production the XXX,XXX as strong timing came guidance compared dioxide earnings by high the lower farm income day of under Texas. caustic execution prices in overall, well quarter performance exceeded reflecting OxyChem of Permian quarter. positive of offset through adjustment share in mark-to-market report addition BOEs first of and and to a DD&A fees our quarter. million production tank a increase as and gas OxyChem to quarter a production partially the are in executed pleased the feedstock to first such increased so resumed from earnings to also being our due prior fire ethylene in The increased exceeded facilities $XXX price curtailed by well BOEs lower International driven exceeded in soda OxyChem our as easement costs, $XXX

build changes from business prior also impact. driven income decrease approximately cash by the reflected $XXX quarter capital lower which Midland-to-MEH $X.XX. decreased exceeded midstream mark-to-market and first differential, to Midland-to-MEH Compared with a guidance a quarter, included $XX to differential the Working Our lower-than-expected in the of quarter earnings higher a higher million primarily businesses a capital also result for and tax to receivable draw details of accruals. year full experienced including X marketing volumes. quarter, typical as first our property XXXX. the quarter a a of due Both Slide our and and second working fourth guidance prices payments OxyChem and

outstanding XX% to X% deliver on $X.X repurchase our production track to to turn to of proposal we We annual share while over to Anadarko, growth now capital our have of program. budget Due I'll Vicki. back acquire call are within our staying the suspended billion.

Vicki Hollub

Thank Cedric. you,

our proposal. turning to Now

Mozambique those On likely to delivered of yesterday, for events and we when April $X.X and superior our discuss to contingent Anadarko. updates recent well and acquire like related sell to the to Anadarko's an stock. cash our complete XX, important in in to of have recap proposed as yesterday's seen, before Algeria, announced announced the for you announcements, we quickly But details we South $XX of Africa context. assets proper Anadarko As to I'd our acquisition proposal billion proposal agreement situate proposal Anadarko total the we as a updated Board Ghana,

reaffirms Africa this agreement than Hathaway's shareholders. reasonably Berkshire On in transaction with to cash engaged companies' as believe proposal financial compelling pleased completion strategic connection that X and this that support acquisition manner to has the our of that sell we've is since to value fast continue both plan us our provides with to enhance and On $XX believed April of Board to and to Anadarko. announced acquisition proposal proposal, We're highly in for the companies proposed agreement portfolio. it we invest uniquely to of thrilled upon proposal. upon complementary with us announced XX, previously in acquisition of would divestiture been April Berkshire could proposed debt. ability a have Total component of which we result Occidental, Anadarko's Occidental assets, a sheet-friendly Occidental's Hathaway Total the benefit Anadarko in is Anadarko. an of increase announced Yesterday, that believe deal, for our merits secured Anadarko's April with completing its asset it committed this Occidental's We contingent proposition from be additional expected in generate tracks financing had issuing that and positioned XX compelling XX, have We're balance we total superior long have This value determined to the committed the what a our our more outlined billion Directors determination. contingent sustainable of financial

to assets sale our a The funds asset cash our the Anadarko to planned $XX a on almost the on of integration $X sales. consideration billion billion to valuable company delivering Total price sell efforts while of most us billion with these agreement all Our of the $XX portion allows majority focus assets to to of to terrific Oxy.

combined synergies around we to our company Occidental we to of for delivered a reductions financial the from revised significantly Under with to portion X.XXXX shareholders and revised company we $XX cash focusing also integration while annual of annual would proposed of share Yesterday, continue to shareholders. the of of of for Anadarko of sale shares support $XX market accretion. value, us cash significant also supports as $X enhanced the this cash Board and will proposal stock. the most Anadarko capital Anadarko. our $X.X increased well legacy acquisition greater Anadarko. per revised terms Berkshire a share with forma balance share the the the synergies, premium legacy provides that announced proposal, Occidental and the $XX offer billion XX% approximately the and Importantly, Hathaway Anadarko represents and XX% deliver of XX% in the provide terms closing revised assets agreement of to per value billion to and of The as superior certainty in us. close. be receive Friday's of The This XX% on ownership sheet shareholders per XX% per expect Chevron's of Total expectations the of as in help acquire cost Pro would our of de-lever proposal $XX.XX share efforts value immediate enhanced and stock

over and key require assets. almost We our this bringing and what vote, the that with offer fruition. Occidental for Anadarko's long-term our we this value from This Anadarko's great sustainable questions. to opportunity believe shareholders. cash-heavy has Changing a for their is uniquely Anadarko's focused for to Chevron's be can opportunity not is been this does the hope years. Anadarko for proposal up and delay us, We've your prior firmly mix is selection execute two for we to combination of revised proceed Board understand We'll encourage a lower for last studied significant is this and more this on the cited us explanation comply consideration as positioned decision growth without Occidental offer. fiduciary $XX proposal continue accretive merger compelling obligations taking shareholders. for Anadarko We exciting shareholder Board's their accept addresses to as and $XX it agreement reason now open which to We to time. Our and issue that the us bid create an and to

Operator

Sachs. Instructions] Brian first will come [Operator Goldman question from of Our today Singer

Brian Singer

regards with is assets and question legacy first first My to results. the quarter

what the was expectation about XX% the for about prices, CapEx later run Can annual oil as higher quarter budget First raise in given and CapEx XX% to year Permian you And your and year, through in the do see full spending XXXX? of CapEx potential the of you year? maintain the of was run annual for was guidance, done as remainder the trajectory budget. the Resources' rates

Vicki Hollub

hold budget billion. to is plan it where our the No, $X.X is at

As to be in budget. $X.X call, earnings the were we the had mentioned going be achieve but think activity capital of last coming we we're year toward to the year billion end the into going slowing I to our hot, down

Brian Singer

a you is or see it where little talk how that? you that you can And specifically? And more bit fourth see quarter about

Vicki Hollub

It would third mostly the Permian be be quarter, business. they'll combination a fourth and of and in Resources

Brian Singer

shareholder require vote from is revised the the and longer letter equity the bid vote. shareholder NYSE, as Anadarko to result for your Board's in cost shareholder relative to of of in stronger the does And requiring the XX% that rule highlighted one for the of then come a bid Oxy's to advantages you do achieve Board how that vote Governance and issuance a that objectives? follow-up of comments benefits capital the the threshold that's at Anadarko Recognizing it no is weigh for is a not and a my requirement your Corporate

Vicki Hollub

that been we've X.X to Well, made in a making engaged vote. that I always years point can we've offers required to in shareholder say this the offers that Anadarko, up

our the not level-playing vote And increase than it governance in reasonable But our happen. though on wanted put objective that seen, It this doing is this to avoiding an shareholder a at our best you hold the do. price, like as standpoint, days, superior. something was declared was proposal weren't shareholder we chance make even we in rather not XX not we had to avoid that our felt after We And the is. have shareholders From was differential, So still ensure we has a last to playing our our field. to where of all it to vote. $XX interest it price was bid, in. a

years So X% from closing. provide financing lower because clarity was was opportunity already. increase options yield incremental X% losing consideration when we've this price of as on. that closing for it remember, the the worth cost us, Berkshire the even funds, We upside worked our into of with we two our or standpoint, The of we deal for clarity the We what this the well saw upside is took share the felt versus well. like the was two know pretty Berkshire of

know, and you As this fits experience within expertise. our core

for take to the achieving is consideration, $X us. quite that that of from standpoint So clear And deal felt for responsibility when happen. shareholders greater make governance fiduciary you a all billion our was our in into synergies we this

Operator

come from will Research. question next Josh of Silverstein The Wolfe

Josh Silverstein

synergies the I'm there. just you going to ended with stick since

not $X.X the you're cash the offer number initial why does the debt deal, into eat highlighted You needed billion the to How and and I today. the on Berkshire know the additional views financing increase reiterating them?

Vicki Hollub

have those. an estimate a actually based exceed on are They're estimate. We we today. that achieving synergies what conservative that we the believe can we Well, just are

Cedric. we We see upside conservative these being I'll upside. at than very, the the We've for for it only but each is in River and and for incremental the all really we haven't specifics Basin. rights mineral a and not we're haven't more for in helped DJ of trend, conservative what $XX built from very modeled, into over buckets, with much at nothing our synergies us wells. offer the price. Delaware very, believe And in to arrive the into Powder more to assets recovery then we on but far and turn We model the model what the nothing that that respect the these And upside built built of

Cedric Burgher

add updated. just that we I'd have

African those per today, We one one have estimate on Anadarko. the you financing, all revised the of so our has They for assets, to two point also I'd new as of course, cash investor free flow updated. there XX, the XXXX. to include acquire proposal decks flow as Hathaway just and out and been cash synergies, earnings, And Slide but of share per share for well the sale the that XXXX Berkshire for

is can deal basis, per-share a cash you flow accretive, on see, powerful flow financial very the more cash deal an from And basis. thing accretive prior you this even free As on this than can see per-share very is a standpoint.

looking of and just And part of it at to for looked so versus we vote when was holistic more get a deal, it, it it optics reasons, the things what so losing took approach all there losing things, the to non-financial considered, especially a on. at

Josh Silverstein

those points, finding and to put and willing out knowing obviously go deal, on willing bid you're out And this on as It get correctly. reading response you Chevron's if in seems what would I'm if just transaction without are to upside guys another more that table mean be. I and this the more go

Vicki Hollub

a which upside. on things in I even And got you evaluated believe It's an be in that Cedric haven't a, yet, It's incredible want the a check transformational too. to very described, it's fact, has rare, because busy you like It's going Anadarko from asset flow. that with has generational. people, where accretive it's cash base working this see Anadarko box When opportunity just DJ, believe along every for check is And huge Oxy. to can come scale. to Delaware. as the upside. working believe the been I standpoint, They've this value you an tremendous got also We Powder, it's been begun to be

we to into a is opportunity work we excited So easy to we've our not what the think comfortable which today. there we're to more, employees upside. with their blending that be fairly have just culture assets that transition, the with yet. we these be they culture, see that identified going the think believe combination and and But quantifying continuing have think I And you're right, are we're there's we there and feel about will things tremendous of

Josh Silverstein

you're reason here. consolidation than the Permian Permian Basin more the out doing there's why not just transactions? and guessing So two to that's going I'm one just

Vicki Hollub

Permian. of free from the to than of go fund are cash build being that's the we the the both Delaware you flow because ultimately to return to to River then generating. amazing the help more additional shareholders have Gulf much position. that and going flow on as just It's cash along DJ cash to the Mexico close Powder It's And

gives we're It about with flow. So do with much our flexibility free the really it. we excited us what so cash more dollars can and

Operator

Morgan next of will come The question McDermott Devin Stanley. from

Devin McDermott

latest the and to dialogue Board just that a with and concern for specifically detail had or So was has asking. that or I them like ask you've the highlighted on more vote question Anadarko's to areas addressed But what and are been the you seats Anadarko is Board, some That understand the bit here one. potential focus taken what in out. give you first the a hasn't has wanted proposal. letter in was your shareholder others key Board been hoping the little the process I of now key

a your just more if been in can you I some and far. view, points hasn't other wondered what, and been have the sticking about little addressed what So has conversation so in bit talk

Vicki Hollub

of making details got both equitable of worked very we through making all that had management companies. some we of and benefits employees and and looked rehashing the team Their sure I we're the with decisions programs, fair engaged. it things and we've around some We've back of got to down that. management employees we've some both been sets just did went think working for that previously gone along, as our and Well, team at has

just my is is that increased superior, were process. were material, that deemed to going submitted we it's the been And So quite a and proposal the why our concern point which as they offer. we cash along yesterday still weren't XX-day things that wasn't getting discussing where

Devin McDermott

balance the on then And sheet. my actually follow-up's

about Hathaway the of one and we noted, look overall pro equity, you've least with with a as the bid mix. you changes estimates, does, cash preferred So at the component is in there's higher, now leverage revised But and the forma have with cash on the more Berkshire from our here? higher have partially balance may I portfolio. asset that as Can you of talk had agencies dialogue Any this just attractive part not think, addressed the the sheet the, Africa rating of how revised or you're you bid? plan about with may here and thinking sale the de-levering

Cedric Burgher

certainly, So so bid, more cash higher it's leverage. a

through the mitigated have that and sale. we've African about: the We talked Berkshire transactions two the money

So MLP. consolidation updated we're of Xx with targeting look debt or the of at still XXXX, accounting a you and numbers, to that's the EBITDA if the less,

go that's the be it's debt $XX were EBITDA, X.Xx Excluding EBITDA. would Xx At $XX above then the to MLP, XXXX, to if MLP, immediately, just and to about excluding $XX, debt in scenario. a to we

X as target all So is we along, and confident dialogue have credit still that X.Xx further That hard feel grade. be will had all manageable, rating we And said we debt is to think that with below not we the investment ongoing, we've agencies. optimal. our be our ultimately. reduce And working will of extensive we

Operator

will The next JPMorgan. come Phil question Gresh of from

Phil Gresh

about buyer call interest. to guess question follow balance lot the of inbound sheet. the last I a on up there had, asset you sales, interest talked the being to we on Cedric, last Just in

feel shape now to? announced there And like you're could transaction this just with that the sheet better guess faster? on were that wondering get things that so set the that Or assets that was of the do was main balance are I you you've other referring in Total, in I working you Q

Cedric Burgher

of pipeline largest definitely we set transactions assets and was the others, can certainly we are There execute. have of we receiving think other we inbounds were That a on.

we continue asset and sales over-achieve targets. de-lever our so to further can And

Vicki Hollub

to will us the the very it's far I really very, we've coming the offers beat laid accomplish. encouraging been see what that and and in would to just also for that that believe we out interest fact reinforce we

Phil Gresh

deal. as Total contingencies? matter clarify excluding that metrics, done other the there closes, deal are the no no on as Cedric, deal leverage Anadarko And And Is secondarily, long mentioned what i.e., Gas. you then then just the to a Western

require clarify to done? be in you deconsolidate you're what in, interested would order just it to something would If that If that. mathematically, could need were what

Vicki Hollub

It will really Dolphin out start Anadarko. they're And the I'll them to with is and to excited We we're in of Total, I for be that contingent else only with deal say the value that a about Africa maximize assets time one on with First, project. know anybody through Total the question. the we could, the partnered well, know them long we able we going going and get more because than believe.

areas. And so other the with we're and will working excited about opportunities on East other arrangement, we in that Middle and continue Total

Cedric Burgher

And still Western this of because then that's consolidation, And currently could structure in XX% MLP one particular, in still if sell with for and the setup respect therefore, down of that sold you so to for you you unique instance, governance consolidate the you owns MLP, XX% about that sure. Anadarko in the to MLPs, to would Gas have governance MLP. even through would to effective again control down XX%,

down consolidate you a mechanisms XX%, that likely again, still If of you trigger lot sell there's control consolidation. below because

MLP think probably But would position is sure liability in legal a line the ownership at nonrecourse. is, So deconsolidate. the it standpoint to is before you if close MLP not if from you and zero, of obligations, that where exactly it zero not debt about the

at an MLP. and debt some consolidation purely for the the in the it's terms who's so responsible of accounting in respects, nuance And

Operator

next James. question from The Molchanov Raymond come will Pavel of

Pavel Molchanov

closing noted happens? duration buyback been that do You buyback Is that the of over current process? for legal after a keeping share Or has suspended you step suspended. the the anticipate that the if purely the outcome uncertainty even Anadarko of

Cedric Burgher

prudent had suspend last do higher to longer. thing it to buyback this there suspend yet that it's was information a of we we happening public, Once that it. thought wasn't think enough prudent the for probability the and a to material We've done that the felt actually was or transaction We so, now. month little

So the gate. that was first

Secondly, close transaction, certainly, we suspending we will if on buyback. the be the

we back that highest shares we established. the reducing we've buying Our won't and be priority to will down debt, get until debt targets be

Pavel Molchanov

more the about ask asset previously in apply also to much happens? that you and diversified want fact, base, I carbon this deal that greatly a continue neutral. expanded XXX% to Can production obviously simplified target carbon you've mix to be with said Will comments, the if,

Vicki Hollub

goal. our we're can but Ventures make is excited And Low not helping happen. just strategy together. really do our where position our really that had to a still going extend our they're we to do where That in putting think they're It Carbon that and will that could think we responsibility all about they continue out what It's hoped are goal. that team accomplish have the that initially over doing, be, we it's to that impact actually to beyond operations, time, to strategy be our that's We and can influencing the too. we others

believe that just extent we're beyond go we far of doing the our what will benefit the So of company.

Operator

The come of Leo from next will KeyBanc. Mariani question

Leo Mariani

whether the in annual detail or some I provide much DJ. the as with around not could wanted is of how cost you to ongoing to trying see get $X really might What synergies you maybe more here. see breakdown I'm Permian there's at of if versus to the billion that

operated Just want guys given to before. get in you an a sense that's don't the DJ those what I synergies area have that be in of think may

Vicki Hollub

helped we, reason I'll then this in teams our each shale business performance years, us who is contractor similarity a even from that some our over the combination And the petrophysicists, But it's from person play the see with breakthroughs. of aerospace at a with subsurface team, do the the how subsurface. at that a say of between in for units, look key we'll NASA and what start all of outlook in to our we working we looking our our geologists, past look you at view together made over the few and more engineers composites improve teams with a or we buckets. have looks the at working of and synergy full have those brought our they we industry fracture I say, how general, little give how hand-in-hand geophysicists, looking

data to, breakthrough how what to we be. frac that expect only has to works applying then you what we find of in your subsurface. your and together your designs And unit All flow once in be, a for you believe, gotten and by flow we're you we expect enabled really see what And how tailoring but and tailor it, should it, the more already determined then into you seeing what can analytics then unit analytics us results, fracturing that's at look not where you you're and appropriately some but not on with database. predictive good have can you where make can point the then what your getting at judgments you seismic only you optimize XD to attribute have profit. your having we're similar And assessments to in look your analysis have and expect predictive you've

that profit. XXX, XXX less wells look we've XX XX% in to using with think profit they you you the So other and of than when and the XX it's use how the at I top more or do XX% look top at been wells able --

this that So is you look means basing when that, at you're on what physics.

can that completing can based science. taking We're areas. out other it and on bit you science, of a that, you art so You're it little fracking plays apply take the and and then a the of when to on basing shale do

matter the wellbore, same. within doesn't or you're it a geographically whether moving works And science so vertically

its it, the bonded predictive so capabilities Basin, good. and wells that we some taken in we've pretty are really Delaware And found

optimize just teams. new I look shale I know basins to working to see unit try And we're at them we've our And and things done the And business we that give possibilities jobs amazing They've can to to It's shout to with and subsurface a that seen the and been so in team. continuing year-on-year, out do still it improvement expected have other to as a we in well. and amazing. continuing. as us the never

the in again us. improvements the haven't continued with in have XXXX to increase XXXX. They seen productivity basin, areas where They You've from plateaued. to some

on same see success we'll think I So DJ. the the

for the little of Cedric color bit a to go Now rest more the I'll synergies. around

Cedric Burgher

this the at is operating one, Anadarko deck, laid cost loading But deck in proppant out Oxy synergies completion the the the at X to Drilling we we really well prior categories that which you the capital that drilling reducing the changed, haven't primarily out, the Slide synergies looking slide. reduction, where currently different proposal and just efficiency, cost. we've costs look and the Just first down are, updated getting reduces so if morning, same domestic using of put our Dynamics XX

that about the going a to Ken So a help we're here dynamics more drilling with us second. bit front. little in to is in talk

first that's So the bucket there.

we further. address third The supply can And Oscar who and chain. supply overhead We've is global heads that there He second Brown the plus general primarily can and real It's bucket strategy, Again, the then the for our one, estate procurement ourselves. and that Hub deploy primarily we attributed little chain. our about a and for the here but lot in a strategy that Permian aircraft. can savings and savings Permian. In corporate. get the we've people, there, Aventine And us. Logistics last, talked deploy up in elsewhere, supply we

shuttle, plus corporate one to have aircraft therefore, corporate all-employee airplanes. an We

And people so synergies, fourth can about duplicate And that the all estate. of talked we we've as reduction then for you. along need with and we real those, and well bucket we don't reduce a and capital think as obviously offices

and we've savings the chain. supply with world Ken that around So Oxy the it on over there now talk the I'll then turn to Dynamics achieved and follow about to Drilling Oscar

Ken Dillon

of ahead drilling are like and see how so majors partner dynamics, we and started companies world. independent around Permian world, rolled and around the can far we compete with all, actually all to in oil in say First it we out I'd the

So software mechanical-specific, to we very the excellent install with basically that drive in in their drilling a assets. holistic in It's and approach ODD we're our and own the completion confident our synergies, engineers each is have energy-focused equations Anadarko rigs. we of working which the drilling.

own a ourselves. on it's design on network optimize last to real design rather ourselves data the improvements. like time formation-by-formation data in We wells. analytics how more we We And processes, than have the a drilling our to results well. use of bid of stabilizers and We book make social based design

that each a and with the Schlumberger, performance. to Everyone we're over we're we've those together to chain international we've drilling supply We've best Halliburton, worked like Since improved XXXX, input, on have individual talked HES, this about proposal. we've focus all on same saved and the XXXX, very over since in the contractors about supply look I'd making hand room $XXX so is confident you Oscar well. in optimized as chance If And chain. synergies individual we've internationally. the has altogether, best are and to Baker integrated now the well, not company million processes.

Oscar Brown

the We'll with stating with doubling combination Occidental Anadarko. guess the I power our And purchase just be at obvious.

that's best opportunity. of on I'll Delaware little combining terms scale expand We'll Certainly, a on the heart comments practices be purchasing the our in maximizing that Anadarko's a of is from procurement. the both power XX just only So in model. companies' economies huge Basin Cedric's and bit assets. Aventine of and Hub miles company, Aventine

so all available capacity are and managed Aventine of at lots there's different services products for And that the there. still

So see Aventine-type can opportunities you Basin. superhighway sort Delaware the may Delaware you there and there'll map Southern expand you And if pro to the can Northern on logistics. that's model on see the other the general in parts a the XX, of be of terms the really And forma the of be formed Page opportunity huge of between look to position.

in of et both In terms rates, have OCTG, in addition, where the contracts rig purchasing will we combined help our in cost, purchasing cetera. us think of certain equipment, the power, power terms I increase

noted. million So supply to we in great believe that's there's the chain deliver $XXX opportunities

Leo Mariani

All you very right synergies around thorough the from very, here. folks answer

in Just follow-up. of a terms

out Oxy volumes commodity I post flow of here? maybe think, process years couple around there over that at some eliminate thought and those Is leverage for out that cash deal clearly of maybe the prices. you increase hedge to next will any Cedric, to pointed some the the thank you deal, sensitivities uncertainty the in

Cedric Burgher

It's to be certainly think don't available it us. an will option We necessary.

ahead of As we're do you've we seen, on schedule can what de-lever. to already way

for fall historically we but available a reasons, back us to include reduce None hedging so to the is number not been presented of like help it of of And an the feel we to with numbers advocate you option risk we an we to if need that. have any hedging.

Vicki Hollub

Al flow of I'll also that we're quite for be Dolphin a us, the our Middle form and and business provide PSAs out East confident that our environment there. will point our some lower-price Hosn so -- hedging in cash provide in and the chemicals

Operator

Leggate The next question Doug will come America. Bank from of of

Doug Leggate

I got just two quick ones.

it's really a follow-up think question Phil's earlier I Gas. to regarding Western

to didn't covered pretty a For had of out so much asset those Anadarko control for their Anadarko seem the as past. was as it strategic requirement a of midstream facilities, while, who built really us that in be the

to on the in follow-up of to that harvest of curious, just have guys while portfolio ago, using as well, long I'll Obviously, harvest leave if Anadarko My that you the And of the as see Oxy really just of know you deal, I'm your cash you of whether give continue onshore? there little what see cash. had Mexico. was arc or clearly, monetizing rights as but is perhaps a be one ownership much bit in yourself I that So time just just West? consider that requirement might the role a this the quick consolidator you as made expect as it a to you in curious you can given an I'm ahead retaining us the there. takeaway some to to interest Gulf thought more strategic a

Vicki Hollub

Western with first on the Gas. start I'll one

the it. like selected great We necessarily we year feel did last assets design, fortunate by with management midstream of to for our those and to positioned quite As take to you own two, actually, the infrastructure the don't teams what and to us. we Doug, out, that to pointed that well were well are we rightly companies maximize really very sale are have of feel we advantage of like value work

And you're talking who about that with working happen Western we when with have divest of relationship us thing for with great someone them. to for The because a has infrastructure. need would aligned same that interests it important so it's are to you're yours

So option I wouldn't off the take that table.

with Anadarko's and that today, Gulf that would in potential consider Mexico As the our sooner and on With It to has working be to Gulf they respect willing maintain extend cash keep of the just monetization the there, growth. of a Anadarko not and And superior than a use consolidate It's depending assets, done our that place flow the we buyer. of would be is the have to job flat as any later of be rather would production great the strategy same cash. to today. generate in our asset that, infrastructure or to Mexico to team flat. doing

Operator

will Our Deckelbaum from of come David next question Cowen.

David Deckelbaum

capital billion. is in I standalone assets? African on divestiture? just towards wanted Was $X.X of $X.X that confirm, any African the the allocated the included reduction, to the post capital This assumptions billion

Cedric Burgher

was. was removed. that's been There it capital This is Yes, Cedric. some the assets now associated with African

schedule reduction with well that. targets of capital on ahead we're the So as

David Deckelbaum

included in saying $X.X of you the capital much another reduction billion? still sale? billion there's was after that that the how So $X.X Are in remains

Cedric Burgher

$X.X about that about billion $XXX It leaves so million, was remaining.

David Deckelbaum

there included in from was Mozambique there So nothing then?

Cedric Burgher

That's million so of the me. $XXX then about and year, with million $XXX ex total a $XXX Mozambique. for excuse million, next million $XXX was Mozambique

David Deckelbaum

I suited talked pro then a to about capital combined you Okay. as the X%. augment lower Oxy be reduction quickly? function if then first at growing of that more would of as a trying much growth the then that. it's appreciate rate follow-up. And down couple de-lever years standalone just know I in slowing rate? free and And can Is the cash a to forma, the purely to better not just as you case,

Cedric Burgher

does of years. have scale an growth rate. free help a well. and And a be think quickly. taking flow many it that rate, then more considered We and asset that size. can so certainly increase that's de-lever standalone, we also doing yes, growth We as we on appropriate obviously cash healthy that in up many, us think terms for many, It's So is transformational, X% And would sustainable question. very this good larger very base,

As that up middle so of middle plan organically been year through in M&A. than the And flow flow, last basins last second-tier of countries a you Qatar and had were in and replacing replacing the we've we last loss year. exited replacing until surprised we know, we of lot the -- year, as and the were that cash well. then rather accomplished We with that the that of cash

just fairly been we've tell that, Anadarko lose in yet I headed where if on So as haven't soon headed the We you deal. but we're we well that's internally. direction that to announced can were out

Operator

final Securities. question Capital One will come of from the Tullis And Richard

Richard Tullis

Basin How drilling Vicki, in breakevens Oxy's in about with oil. $XX Anadarko Permian referenced the locations existing past, Resources properties the return Delaware has X,XXX would of generally below basis? Oxy on within the inventory a rate rank

Vicki Hollub

they think I of within top well fit the tiers. would that couple

Mexico, and there's had opportunities. you some at between portion in a referenced, Draw Oscar shows it Barilla believe, of Southeast their there X tier certainly, XX where some prime as in If the the, is Slide previously acreage New look quite we and that few there's acreage

and very, I believe our infrastructure And time, cost over imply $XX very less think over because theirs, XX,XXX it as be synergies of down we'll to can category. inventory. breakeven we expect to move that a more we able wells the entire wells. could two lower into lower believe, similar that that the cost we trend, And so than result there, our would areas of further their with we we be be that the inventory can

Richard Tullis

albeit And smaller generation, not environment going forward that that in value and here, this to much execution But to acquisition on the flow acquisitions too may work the how trying of does done, further more just free course. in there's Permian operational be ahead know lastly, may materialize current cash they future? pending places more be impact jump I

Vicki Hollub

size. things of not any teams bolt-on say not targets. debt achieve that that would We we that. We anything would we acreage will acquisitions very asset do, and continue where we the like smaller swaps Well, something makes do any until would acquisitions. some material I doing our it bolt-on be that looking but be of at would would reduction our continue sense, trades small

Cedric Burgher

question to we've I'd something I like there to that one get make just up sure prior everyone. offline. want add came had we it for out in thing a

with the it's other tax about net $X $X.X in for billion, will transaction and cost. about For the billion be But transaction Total, in $XXX after proceeds tax, about so proceeds. million gross

Operator

this And remarks. like over Hollub and session. in the closing will question I'd of time, Vicki interest to turn answer any time, the this At conclude our conference for back to

Vicki Hollub

mean for it's just questions your you and good Occidental really shareholders and I ultimately to all Have want joining call. going our for opportunity what shareholders. a for and say and Appreciate for this to thank Anadarko excited for our We're about day. Bye. the it.

Operator

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

You may now disconnect your lines.

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