OXY - Earnings call transcript Q2 2022 | Occidental Petroleum Corporatio

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Operator

Good afternoon, and welcome to Occidental’s Second Quarter 2022 Earnings Conference Call. All participants will be in a 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 Jason. and you thank Thank Second afternoon, Quarter participating Occidental’s XXXX for you, everyone Conference Call.

will with Officer; to Vice Carbon Management. On and slides President, Operations, Officer; available a be section call us over of go afternoon, on Resources turn Forward-Looking our cautionary Vicki Jackson, includes statement are the and Investors Onshore presentation Hollub, and Chief regarding now Richard Executive and on we the ahead. Rob this on Statements President to call Senior The that made This U.S. the Peterson, Chief Financial will today please President afternoon. X will refer Slide website. Vicki. I Vicki, call the

Vicki Hollub

flow reduction to the our marks flow have cash share afternoon, more $X goal years. in primarily returns. near-term share free of we The already billion quicker program our surpassing significant have near-term shareholder we achieved The $X.X of Thank debt you, year brought of established billion to completed everyone. activated the before target goal initiated in debt to the than over billion, Jeff further and the meaningful billion near-term $X debt, we originally a We beginning priorities the of the completed shares. a quarter repaid in repurchased at year, of our pace quarter of debt repurchase this allocated and to milestone as debt of this debt With increasing we May had an $X progression amount we our few reduction allocation program. our cash a total second At anticipated. we reduction our cash shareholders and last repaying good a over repurchase than additional good as second accomplished, additional cash allocated goal or morning

return has afternoon, will reached deleveraging a remain to the phase additional This focus next Our is expanding the ongoing, in Rob to financial stage and Starting our shareholder balance guidance go increase as results which I improve but an our framework our cover our shareholder quarter cover return operational sheet OxyChem. priorities. our full-year will efforts where updated process as includes our of with for framework. our second to flow cash guidance, well performance.

to to operational by and Our the of gross billion amount billion results, shares price the repurchase sheet, shareholders. commodity focus program consistently combined position in the we $XX improve high well teens, at an returning continue progress we capital making as The through XXXX intend as WTI a that shareholders active common dividend the this our $X to expect current to repurchase program. sustainable repurchase returned completed share are to outstanding us through a is of to total of the outstanding, and ability deliver increase high common the debt of of our positioned reduce with in year. of debt our with to Considering to lowering through we to share appropriate reduced $X us debt teens the Once time. the combined and end interest shares have to our reduction, at capital have will balance managing our dividend we enhance sustainability expectations, number dividend payments increase

returning meaningful, to do its While we dividend prior to peak. not the gradual we future anticipate and expect be increases dividend

trailing concurrently shareholders I returns cash over their two shareholders, to maintaining - to clear things. reach to this a threshold redeeming on be above returning may common capital it equity shareholders. year to additional with common to will and shareholders about $X possible Reaching per share us point period. we to focus begin that want require is common returning next preferred to our XX-month over Given turn a

outcome potential the is a threshold share per target. shareholder of $X return framework, specific not our the reaching First,

Second, common per working free mean above would if flow returns generated $X.X as quarterly there not cash billion a is second the continue capital, preferred flow cash of cap this share. to free In to-date. we on begin shareholders we to our cash shareholders $X common redeeming quarter, equity, to does the highest be returned before

energy continue an minute. It record to EBIT business to management. incorporating quarter, tons with Facility in that for Better chlorine to a the well, and we Council. modernization OxyChem this process energy business benefit detail Award of X,XXX guidance day, the development consecutive X.X recognition Responsible of companies PVC delivered with Last Our caustic, of one expansion plants, company-wide accomplishments as and is received announce OxyChem’s fourth spending emissions BOE reduced million, demand with be and the OxyChem has XX COX OxyChem the we the program changes, Department to operations performed Energy resulting U.S. from million in all will that our me capital key savings the production markets. make Practice of accomplishments like $XXX annually. highlighted received achievements acknowledged. pricing and of engineering, from million. for the industry-leading per and just by continuing that which which In that Awards from we in quarter of total metric of so approximately earnings a OxyChem American proud continued the honored innovative midpoint and May, reported and for led in-line training in Care winner, of $XXX robust recognizes Chemistry as and Safety the

field Mountain oil the Al supported high Horn leverage barrels eventually new production budget production production is team would jewel Hosn full bring flow exploration in daily and Oman and after production production our in celebrated at congratulate months the the of of part turnaround XX,XXX record a expected Gulf teams. of a Mountain manner. Even shutdown West following since to Turning to ability and recent strong tied approximately a quarter. came technical to program. in Hosn development day Block Horn an team expertise on oil congratulate tieback with has base our West. celebrating first breaking more The is Oman and X.X-mile X Oman example North ledge XX-years, I is excellent project back record of assets Oxy’s ahead to X, which The X and our like gas. was in to Mountain and using records capital-efficient a Oxy successful by Al operated field, schedule. oil Block XXXX. online plant to been new new add performance, of would successfully planned new first The a I per achieved Horn than the by a to like as almost first still also line. discovery from the the Mexico

with of We our Basin one The investment. strongest have When exceptionally JV in Oxy Midland assets. with worked with partners, strategic Basin longest-standing onshore I excited has we well opportunities in the active be with mentioned flow production both our JV also minimal partners. to benefiting been from our Midland for capturing announced to we and how and U.S. incremental working XXXX, cash of leverage from inventory Ecopetrol deep were

partner that to FEED expand to Oxy’s intensity by increase and record Algeria through and In our Texas Park, whom to opportunity JV future high-quality and XX,XXX customer earn we in out we expand of project XXXX, soda Ecopetrol providing partnership vision. we diaphram-to-membrane and will that and the product This to Midland enhance unique to a international acres modernization expected bring this chlorine to and that new spread as to the a undertaken will we the volumes, domestic modernize. of XXXX. energy modernization while study capital in demand certain a channel the of interest Ecopetrol Delaware being with benefiting caustic in equally long-standing we Delaware investment It Huston with up is collaborate this agreed billion, with from in will Midland exchange our why quarter XX,XXX to carried both we Oxy Oxy to the mentioned and benefit I’m has in cash our the explore plant, percentage OxyChem, morning cash chlor-alkali in our continue opportunity up infrastructure. adjacent production net The And to of produced. asset. will Ship Coast carry a high-return to flow agreement. approximately for generating pleased $X.X one is in of Delaware which will and part sites roll renews the respond while the long-term is existing and Battleground in with to we and XX%. single month, announce Basin, three-years. ready XX-year a a technology. Sonatrach, have working agreement with opportunity of see capabilities into can to the project will and licenses low-decline produce while and utilize plans, will reserves margins extension Dear call, is agreement acres our to continue a of asset project flow developing chlorine, production-sharing with a agreement JV access This partners. Basin. caustic further technology. in Oxy first the is end and opportunity improved Basin, into over lowering who also for XXXX our from Texas earnings with products development the production-sharing Even commence the share I’m The have enter the an of of to assets grades carry that Battleground Oxy’s the On includes certain excited acreage largest capacities the capital a markets. fortunate with an development increased capital, Sonatrach to are capital a The of extensive Last with Gulf expected in higher reached that Basin We partnership generating chlorine derivatives soda we project. that the agreement the for year The expertise result facilities both be add the in with products. with to with announce in cash In quarter investing development an newer additional fourth forward deepens expansion to the the to to for OxyChem’s was through cover new

in build incremental with will consume operations be chlorine realized derivative cash we During volume, made contracted ethylene have online. since expected and to production were to comes we XCPe This normal, prospective contracts as OxyChem represents several project improvements sizable construction, to be The to are The a completed capacity expansion expected plant internal by the first have we the cracker as one volumes flow the and new and the the have of is grow caustic of the existing XXXX. continue OxyChem’s not high-return Battleground project is the that opportunities the few over next years. advanced XXXX. while structurally in time construction investment completion just in

We over walk to Rob, studies I results and chlor-alkali additional second complete. guidance. and are communicate turn our for similar will who assets to will through the call when conducting now you quarter FEED results plan the

Robert Peterson

million warrants over of allocate price as second purchased per share. million $XX XXX.X in the the with be $X.XX were gains bringing Thank purchases strong, We free the two per profit generated per and adjusted flow. for In the exercised, to X.X in have positive million diluted billion to cash our difference Monday, share shares by quarter. a extinguishment traded Also, XX approximately driven adjustments. share, approximately a weighted quarter, of exercised level outstanding. an you, X.X Vicki, of almost average To-date, $X.XX were $X.X afternoon. debt we primarily profitability announced category second numbers million diluted during pleased and good number August and able and between We the to of with early reported quarter, record the or total profit Xst, below remained we publicly mark-to-market remaining

the be towards repurchases applied were shareholders. common proceeds XXXX, As mitigate will to warrants cash to received we issued said, when the in potential share dilution

expect Similarly, in next Ecopetrol Basin. intended activity our year. with support closed year. Vicki are will add date Delaware JV Basin. not development is the an is impact additional January budget an X, our XXXX, as activity have on late the AB With the until online The production mentioned, amendment expected As any the of to to excited even we quarter enhance Permian Delaware additional not opportunity, come not add the year to JV maximizes the until effective with XXXX. relationship we to JV The in to rig meaningful and first expand wells in second any the in this capital

enhanced allow XXXX We the intensity to expect JV or the capital and industry-leading maintain Midland the Delaware lower JV onwards. and us Permian even in to in

provide further when production guidance. will XXXX We details we provide

X, spending will our quality the delivering XXXX West of to XXXX, while cost Permian provide effective January Reallocating half and our reallocating the working production we guidance Separately, delivery capital date transferred for assets. returns to this capital the year second that and XXXX slightly. of start also activity our full-year adjusted our JV operated Basin, are have Midland a in partner Given interest the OBO given for related control. Permian we in inventory more our we earmarked and certainty portion superior of operating down the

a change. interruptions JV slight timing second the to Appendix production as disruptions as well with operate the half to issues, or of to in going The combined relocation other in primarily as The working transfer this related production, reflects slightly impacts even third-party activity shift XXXX parties. EOR various matters, operability all downstream short-term that third on benefit Permian interest OBO due are and processing in full-year capital, the this gas operability in guidance. impact lowering a year, While assets result to the of presentation such unplanned developing we at stronger our slide in contributed The update our is has the expected change performance earnings forward. activity financial resources the of

as For unchanged, XXXX, production Permian high adjustment the company-wide and offset by the Rockies production guidance is Gulf the remains full-year Mexico. fully in of

XXXX. very delivery approximately a growth Finally, fourth with production comparing BOE quarter XXXX of the for fourth quarter we day implied per note remains of guidance our Permian production through of that the our strong, when XXX,XXX

the given a result in set in growth a always production been to the the guidance to due is downtime notably expected in lower production of tropical which in activity We third plan, part half year. ramp-up half Higher considers quarter continued approximately higher of decline in turnarounds the in of first second the has expect X.X our of activities million XXXX than production day, per year average BOE second the an Permian, quarter. Company-wide XXXX first and in half Mexico, to production for includes the weather the Gulf the potential of and combined the scheduled rig impacts third-party but relocating Rockies our Permian. with as outcome of

in our To expect the that capital as pressures budget in others. mentioned Permian, in full-year call, high to experience spending of to previous Our remains in, the to $X.X range But especially Certain to have of than of to inflationary of we plan, execute billion our we assets XXXX $X.X and Permian. XXXX than address from capital for capital to I appropriately generate capital billion. inflation, been areas budget end unchanged. support higher the the million additional come activity our be continue reallocated is near operate capital capital reallocating the the other believe will impact regional $XXX that We able Permian higher expected our company-wide savings. are sized we as

pressure in upward are well on due historical the EOR conditions COX raising are than potential $X.XX as continues primarily from to though see expected expense to which than our continue exceptional third full-year index well, labor the We market for full-year we purchase continued our We the costs, by to guidance expected reflect raised to well supportive energy pricing inflationary operating have to domestic quarters contracts remain fundamentals better our we as the year. previously long-term dampen today second and the of to as guidance and pressures, where fourth performance still be a accounts Permian, OxyChem perform higher for the in and WTI per as to standards. half business. we slightly quarter and second expect strong BOE,

billion expect WTI to Federal prices be to barrel taxes. cash taxes. continue settle possibility cash of $XXX average The million financial to approximately as to $XXX Oil of rate settle net in around interest unit in that mentioned items. WTI higher would million remain outflow the Federal $XX or to pay averages $XXX swaps we cash year. $XXX we notional interest may swaps. rate in will strong, increasing XXXX, expect Last we approximately million the the Turning for September, quarter, averaged required I curve. U.S. that WTI per these intend price back pay liability $X.X in XXXX, If current to U.S. would In

of repaid in debt, near-term for exceeding we in $X.X year-to-date, paying $X.X second the approximately goals mentioned, including principal quarter, billion billion year. our Vicki $X As billion this

our shareholder made part the We of shares return program. towards of began further $X We continue commitment as also towards more to allocating to the shareholders. in our our the return repurchasing debt gross to free progress share we flow current second We medium-term teens. have meaningful quarter, intend cash high goal billion reducing until cash to our repurchase framework advancing complete

to investment to period, value we share debt likely program is debt Once we free opportunistically repurchases. continue complete, this repurchase view allocate During to the of cash the concurrently retirement and with our reducing will face towards debt flow reduce debt will share intend retire cash initial the free by allocation cash grade. we high intend items our teens, emphasis When reducing accelerate return initial priorities. in we believe including which this from flow of our will of stage, we flow our to reach primarily to

credit levered of turn to time commodity we the our outlooks. enhance with intend as cycle. one Overtime, our I ratings. the rate of of maintain approximately progress debt-to-EBITDA or will to and our over major now Fitch call, level make we billion. We - below ability capital our for a agencies investment returning below structure capital achieving to rating believe our grade, Moody’s leverage positive assigned this throughout our Since to while having call notch grade. will mid-cycle at our All just will shareholders earnings as credit we $XX last investment one to to the strengthening returns, appropriate towards debt goal be to incremental positive We return continue equity signed three back Vicki.

Vicki Hollub

now are to your calls. We prepared take

Operator

from [Operator question John ahead. JPMorgan. Please comes first The Royall Instructions] go from

John Royall

question. for good my afternoon taking Hey guys. Thanks

in talk but that you the pieces total I can moving So Permian same. various the the kept raised about CapEx number, the you the know guidance.

what areas for then the raise? And next FID structure the in change be takes would are you year give funds with the for pieces into then Ecopetrol? for and source us Chems the So Anything of of into going some on puts and that helpful. were year kind of this early that new any with moving look the next can

Vicki Hollub

the I additional will then follow-up will and of the cover the let part in with CapEx that Richard changes I question.

Richard Jackson

is couple as this Richard. as moving the during John, things of we pieces across a we U.S. few Hey occurred so look at And look the it, Yes, a year. onshore.

OBO And plan. of in assumed first, early in delivery. wedge bit our from production think, slower that I perspective, a a terms we had an the became in year,

year. of us which wedge went give One, to and for it some continuity but we few things. the to reallocate added back that also the production into on like We that our operated, the some ahead of move did did the of we so And back capital that half for half that. year resources secured it us, the a made

are As these projects Rob that good. are comments, mentioned in high-return his very

early the hit inflation has year the out was then and of in frac this securing that of timing And improve as and some core terms back rigs the in to of performance we a of for half good those year. terms ramp-up move. our manage played well resources in So

other piece step that, reallocation really is two The a of so from Oxy.

we half we that if year, But of the is to. really carbon some for to LCV. air hub low just That coming back really hit part in development so got capture to We in CCUS around in talk the - of direct midpoint have can of need be detail look coming the we certainty closer on that place. more the in ventures. that from And that work as is is more we

Oxy the to And plus, so think, of that rest some contributed I savings other balance. around really that

So that extra if you that say activity XXX, of is I XX% really would adds. think about around

were And really rigs, capital That is keep the front-end year. a take us allows the which inflation. we as XXXX. our across piece then us that So other for bit drilling in continuity, to go we especially loaded optionality around and will plan give into

We on that seen pressure that. have

a additional outlook of We X% that. an piece outlooked we But to have of large to the been compared to able mitigate plan XX% on have year. sort

start to so see come incremental been We able that. operation to up. savings, the in of X% again some an we that progress make with up have against pleased But inflationary pressures did

helps And uncertainty, of address for call the it, capital so I rest would that year. that the

Vicki Hollub

the it fit way too I would will that allocation, say would the and with still on program. early XXXX, But capital what that Ecopetrol compete is JV for determine to within be. into would the for us capital we resources

John Royall

to Okay. over then switching Great. And chemicals.

could you that fundamentals down in a little a a bit in coming for the guys just strong XQ, off business, half. guidance step the about big second very If but talk

and second source the could strength what in color you you if in of give the XQ half? changing on some So see just the

Robert Peterson

Sure, both caustic that the are quarter. favorable how earnings determine points, and they vinyls businesses And to the see business have and performance we - overall. quarter. had John. I we leading the the second in very record soda when both would In in say the largely you that the perform obviously were both significant conditions Chemicals, favorable ones conditions we second impact in

a have conditions the are we some quite time to the Vinyls experiencing supply I the strong softer trading indicative housing soda half GDP, look continue about domestic unfavorably, the we and rates, unpredictable third in into become they more way. part of the of extreme and time of of manageable. certainly in talked some upset can the But to the terms macroeconomic latter remain that also very market, business second kind are are to from a that’s is or here demand quarter very in in why relative say, weather, when still while caustic first improved which which I entering conditions supply say go improve. you softening the business interest has for And year being the the that really we quarter, half. you If at been third either would tightness would

is And the of And of so very thing to this the - say far beginning are hurricane is other season. has enter the difficult it bit impacted we I very very out trying as look would that peak season backing to that business into or Chinese is hurricane the other chemicals a their of the pushing sort tolerance including to terms in Asian the for of the shutdowns the of other incorporate world, parts into impacting needs no-COVID demand policies U.S. exports the from the COVID, chemicals outlook related up is we and

this again, have been But historically by seasonal softer bit is are year half PVC And are are up again, of the year-over-year. X% lot for the and in is through the the et second a onto alone many we strong. coming a All all year. our projecting last quarter. now decent can basis all guidance where rates, be would disposable demand effect. let about in durable trends up there those standards. quarter of see in a can the the total market But in macro U.S., are including business, remain normal it what when goods, growth is business strong seeing The business, demand, inflation, quite of of the would that seeing to third areas PVC, off from growth the half if from sectors still short are are years. things can year But in the either modified X.X%. softening exports Even the is of at two There business, because Overall, X% still cetera, look those. pent-up we side Chemicals almost for still the of of projecting to years X% imagine, that, quarter were we a we year. a we of a so first And Domestic in income, June. as the is historical these we of fourth as a see impact something you chlorine et But interest on you there declines cetera. relatively demand demand, is change

of a is part But doing potential right overall, now, same like, to is to else demand. favorable the it they in of depth not favorable doing that the again, trying second So recession what just on impact a quarter. just forecast the and conditions the but as as the gauge very look might trying still in business, were

Operator

from DuBois Generale. The from Raphael next question go is Please Societe ahead.

Raphael DuBois

for Thank you taking my questions.

The to first one is related Algeria.

what for you is mix the in expecting? Now whether between us some a give be gas that change you potential production better Algeria should there have and could if on wondering the signed color we is this that XX-year contract was extension, maybe liquids I and

Vicki Hollub

oil signed, developing that just gas. already we agreement Currently, those under basically we have the been the out. And from primarily production producing will we with associated fields, expanding be

be say it little from a the production But bit of going next cash I because that to same. lower flow our currently, outlook approximately the structure going looks So would to standpoint of of it the is contract. look the this year our is than year

those So it the to develop have to is existing a of in the lot we on we just potential, continue And believe, fields out. terms. based

is of add able we of that, remaining will be the as be reserves than contract Other lot that potential a extension result a for So just will about further the to XXX there barrels. evaluation. million

a not other that part a decline yet, that our the with what relatively find us survey as part seismic gas can is conventional be commercially from there to an over and internally. injection opportunity we should there we evaluation, supported better low of Gas with for they injection. we it we developing increase So COX ultimately are projects XD included to have some could have because but be competitive the of the the all future, are in sales, so those potentially recoveries and start

Raphael DuBois

modernized you feel of This more follow-on Battleground be announced, that Great, hear forward that could you be of next we would thank would the have a you the for chemicals. plans you. could of could be for to and so intensity capacity other my one have what the us have that question for that And you When consider project modernization. maybe can said remind we project expecting such we CapEx earlier you about about going Battleground CapEx will projects. and

Robert Peterson

Raphael. Sure,

So talked we the about beyond project. have Battleground potential conversions

So point, conversion decision we in the the move as at this forward with remarks. the made have to indicated Battleground

We will very process or facility. short short construction periods to operate and some the important continue between for and facility outages existing maybe connections think or throughout the infrastructure I

confident are impact build that continue inventory and process, customers. no with to We lower can product we throughout own

Battleground should And the project so assume loss itself. of sales actual any you the about or process, not as you during margin think

diaphram to conversion facilities. So when our is and are now Wichita facilities, you process type a And membrane once already the at at which technology look at non-asbestos facility, right change we the and technology, have the our polyramics. a Battleground TAS of facility making other Geismar we convert polyramics, we in

not only convert project, increase will So the but capacity Battleground its by X%. that announced

the Ingleside the Battleground Convent as We asbestos And facilities further our on conversion. leave will begin we will those actual get underway diaphram. with studies only utilizing we conversion

to as for series sort make with we them together. what of Battleground but one be together. to right on stagger do to facilities do them obviously, We the completed project we those going are other, wait will pertinent now. the We a sort will moving won’t as But of to forward isn’t decision in

we standpoint, in them. a all necessarily They capacities limits. say amount capital from facilities as would inside all facilities, from sizes different two that battery they associated other the They different only for and are not the individually have is what outside our different capacities that The will we unique. are a the in go on and - don’t have the $X.X with conversions cost that so facilities. facilities. that But provide of but equipment intensity I though I use individual would have And slide of included not proxy deck, billion

determined stage, mentioned, the project. of addition the is into side derivative of we for business facility business, existing we obligations this contractual that side the In with the the secured expansion Battleground have the also chlorine moving at as

project, get those expanding in facility. Ingleside are don’t additional the to At we or this future. expand not We for the sold to time, Convent are facility our demand needs already either hoping molecules have

stage, one conversion simply So proceed be would this FID it to process an change. if of a at on decision we of those, with were

three included would with up and And those take so two that certainly in times multiply wouldn’t be a to that. difficult other come to number that projects be for and number it

But forward And to with so in is move actually time, sharing future. changes subsequent as we start made the one. on the with ideas get further this Battleground Battleground we decision will the along project, only we

Jeff Alvarez

current conditions. mid-cycle this provided Raphael, Rob way marketing add more one thing have that look we be pricing is Jeff. current EBITDA, at to what number the of not The I would a would said. or EBITDA as I at

can your you use estimates. So for that

Operator

question from from Stanley. ahead. Devin Morgan next The comes Please McDermott go

Devin McDermott

taking Good afternoon. Thanks questions. my for

ventures. So low carbon ask I on wanted to

you there if were Can the talk and some few the about part cadence Act a set forward, next guidance of that that as year. moving this impact bit earlier Reduction just over midpoint. wondering you have direct cap One toward of year the investment you forth And recently pieces of was might was air in years? of the more the capture towards coming little the that broadly been that about progress has this is making carbon how also if LCV the to could introduced in talk that, for some supportive you language move the capture. spend been Inflation I milestones in

Vicki Hollub

increasing, gas sequestration. and EVs, the federal reduction methane will of the one is reinstates in [X.XX] and leases, which And the increasing royalty ranges bid right whatever use And requires little that of played of It sale some impact carbon it (Ph) then a start, on bond it interesting Richard. key capture offshore one of about there. sales what about for over requirements, bit some that not safety it land, we in of oil lot Mexico of the There produced, and But from increases Inflation lease. reasons and for, pass rates or used things I ahead in it wind royalties I ways annual for Devin, excessively are the Act, to good rate while gotten had things to increased in is cover gas a granting royalty also act on the there, lease oil rates, is we fuels require just to increases. oil lease us energy, for it gas from of and want hydrogen, But and things but things is that the Reduction are unless benefit to Gulf more does the renewable of rental is solar. minimum rates alternative leases. the in is emission, used and

company. really is us that as so And for a important

thing other - at sort should the are thing, to us, passed. impactful into most to reductions is get this Gulf of methane doing, probably bill look at a and turning for lot you scheduled things emissions it is of around And the carbon and a enhancement benefit Mexico the capture, XXXX the emission look requires the which XX-Q. to to us The that positive from net sales it XXXX. were us that we and the of for already when the requirements of things very are resumption respect is is lease to the for with you there And which

are. so to So little give he you more on Richard, turn I what CCUS the will can it color enhancements over a

Richard Jackson

both specifics with Vicki development then direct just of can and of couple potentially plans. a Devin, points me like our this few a how and progress said, on, on Yes. CCUS air start our help Hi get kind let capture

capture, critical the I direct air well. think from to pieces continuing are move

I and finish from technology FEED. we were able a to think standpoint, engineering

And packages bid track begin being chain working and very construction the specific go end that We putting we end together this plan and the of supply into really the FEED year. as on and we are by hard are to taking that behind of year. on the thoughtful about

continue offtakes. from removal we the that. dioxide sequestered market terms are support with From time in the So to COX very a strong carbon spending have of support,

terms to that see will our in about with to partnerships support development movement meaningful. good to plan. on continue that. to couples see backstop One, capitalization be continue how and Obviously, for know of policy beyond those and think continue not Plant derisk, that And so really on but we then And only as we capitalization, to the help are thoughtful

on end for looking detailed work then to again, work the finish the of really, that And streams. innovation so piece, year, engineering and construction, start our

the picked pieces for We you there, reduce have good center progress I capture about innovation a think to our really Again, X. But seeing plant. thinking Plant got of lots we in is with continue life engineering of that facility four in really of learning. how going, cost things the carbon the to up do one

a And so of it lot opportunity that. for provides

the briefly on on Coast. Just the Gulf on focused continue our CCUS hubs, really we three areas

partnerships last to lots announcements, And efficiently the hubs. development. pleased think that, picked think of that moving for poor then able with have be on about retrofit secure I great now with been with to we our had space COX Very or the our able target XXX,XXX-acre quarter engagement midstream to emitters. We we those within up over

dynamics, say, over updates quarter. as So the last into of more go goes we the year. both would Expect well. that those on I Lots of

that into And plans will so communicate. we we for that will and put XXXX beyond

plays terms some So in the lastly, of that our way. just policy of

we important this us, to It us. on that, revenue to really is part certainty the the work think in an for think allow LCV our us we is build Because of really it is business gives It about development, acceleration communicated making good. capability this in some us. which update. I for of

to improve We the have got technology.

the got success. to cost have lower manufacturing have project and and got we our to development develop We

having able that and so to costs believe, sustainable certainty to business to And plan, those development be quicker us allows accelerate we a sooner. it reduce creates

around when the that contemplated very could next several of lot CCUS what happen a create to a in develop there. to final with all value emissions you recognition both then needs done the scale so we to sources. Longer collectively years, the look and thoughtful increased think able be support the and is, alignment so meaningful. complete that for this obviously, language, work thing to think, of I very aligns be catalyst kind business And runway world importantly, And this at to pick is over reduction

I or power removals the sources collective recognized. direct then emissions, carbon but for capture small industrial And and community, is point sector So and large of important. air recognition specifically CCUS from think source

capture And that are and we us both the that large. is so doing, to and for And inclusive very they were small other what but good for good is developers.

hope it does plan so that And economies think create I for make scale to really we the of this successful. and commercially

Vicki Hollub

onshore/offshore methane capture. would emission I that that, carbon on conclude to Just the the federal say in leasing reductions

country industry. good is of companies from it we It meet our set what benefit does the has will President for will Lots the out this While help emission will talked this. for and Oxy, jobs about reduction. for very provide the it our that goals

Devin McDermott

of there. and the question just My second on to inflation. a is positives all for look to lot detail Thanks forward

you to pressure. if some that inflationary inflationary You able initiatives been have wondering I could mentioned that little have underlying on more you you remarks to trends in was bit in a the the offset prepared also the steps take and place? talk offset

Vicki Hollub

Yes. $XXX incremental had originally - XXXX assumed that based XXXX our year. We $XXX on our for million actual, this million of

Our million with him I to they to pass will give well. And area. it you Richard, current very $XXX falling details. assessment dealing this is But unfortunately, $XXX to million. all in the it for is are

Richard Jackson

up assumed offset a X% we and couple to that, XX% mean, to us incrementally just Yes. X%. through now I had But Perfect. Thanks, Yes, this have to of our Certainly, year. we walk X% are plan, seen a that things. Vicki. base we for in

part resources. the production our thing whole I is get will half on pieces performance into strategy, couple that so of for of this securing And the If cadence delivery a was quality we and schedule year, second of the and talk very there important.

Like of supplier that. a But right sort that We most distributor has been us. for me with off the with vendors some work one one to pressures. and few. the people, let key just rattle secure OCTG seen highest important working so inflationary for has of And

and year, hard lot supply The so really of what like about worked then of that that. supply secure do and this over a what six-months. think gives think when areas us In pricing, out pricing. a is the developing feel to do we inflation, out we in the year we about And the we about have you sort security is security, good core ability

mentioned the going good allowed those right that core, earlier, of of that feel we into Rigs so resources. fairly dollars well of operated that. timing OBO for looks. in that the then we and and I cores us securing to in some frac get front and end again, the And how are of into Shifting the that as rigs and XXXX, terms year get, frac

we look We with out. And over our are our rigs cores a little through next XX% year. of of as similar contracted first the part frac

really the again, performance. a have lot on worked frac providers narrowed And but that finally sand, have rig we good feel we and core so about like to that, can secure And then we feel that. again

more they frac that. to and us sand to and to then supply. sand logistics facility integrated providers, continue our gone help supplier, on allowed logistics in But has get have on we Aventine our one, think, ahead I us

in secured secured of most through is half supply like feel we the year. our so of second the And prices

up seen less areas definitely a big the been drilling have us. lot well. It and have been completion focused - has X% has that for a those as So less facilities moved lot OpEx,

in So hopefully, detail provides we have some doing. that of been what terms

Operator

go ahead. question comes Please Doug Bank of America. next from The from Leggate

Douglas Leggate

where continuing and could is, guess, how the trade-off Thanks. the to to than would burden, share to versus much aggressive cash I flexibility I $X and trying in Good to guess to back bit I more go I pay more around you understand if down see debt? go. for afternoon I’m pay guess, $XX trying could preference wonder you than two, - you be guess prepared XXXX $X billion, or being question down Vicki my is the return the potentially What a it the a everybody. if regarding do I I us. try between those per the frame Rob, discussion

Vicki Hollub

the the be. depends prices one trying to it going even Doug, what to or even Right from next now, really forecast the - next minute to are we on minutes, hour really can’t are macro. we one to

challenging So the planned that the of of a of a because the out on if of preferred depend not strategy lot macro advantage you take the point. to deal in our around trigger are - as know, would the you terms enables way

decision, what the priority reduce assess the to trying is that to along and macro that with the really prepared going are to a had we look But always is reality best from to whether make currently, are preferred continued right value our So along reduction will now, with debt. common. and we be like, capital we debt framework, have

how other if may at that. what And know it on the respect is depends this perspective, inflation long depend the don’t the continue a be, of do end that getting maturities. see next like year the the what recession, be will the debt will we a really opportunities looking and will into pace or year just what to we will We that will and And we through deep and than whether with from do do faster preferred, short fast or look what does. We there one, macro it. to could on

Douglas Leggate

stay And Vicki. answer, with quick if the appreciate to as I you, a may, follow-up. I’m I going

balance crazy low the got couple priorities about with single-digit years, all you the And last over talked had sheet. things in before growth of So of changed production. the course,

I you and want prioritize terms the of you back as thinking capital? balance to Thanks. the where are it will it sight to you where what growth happens of sheet terms what be, to you there. of line get of perhaps to relatively kind now in element prioritizing of And in So leave

Vicki Hollub

proposition have we of have is right part great we and key value that a is a opportunity Well, don’t thing grow of flow because we that evaluation now right an to going our the that stock opportunity make cash our we of that the now. to have is And good what our see forward. today to continue

little dividend do will bit increase. a We of

mature than years. own next don’t current beyond is the grow our few stock. of we least to to we the in because certainly the investment like shares, accelerate schedule feel get until volume over faster feel back We best hope, significant also maturities need terms at point, right And production debt in that of to But we now we the one because will that. of will we what or values we our want is buy a

Operator

from comes Neal next from Dingmann Please Truist. ahead. go question The

Neal Dingmann

be on anything stand current really best the midstream coming you the follow say Vicki, don’t you money saying on in of M&A maybe given either M&A, with just OxyChem, and that sort you need livestock, to the it obviously on fair the will last still would are that upstream one. from to area? might divest pat to be biggest the spend low carbon in likely

Vicki Hollub

Yes, for the bigger and would I in doing, us we areas think that that we the that we are. only M&A have that is sense just get see that’s been make what to

EOR where in So we increasing the the to our business are and resources working interest for trading right now business. acres in and/or bolt-ons

to We So offshore. opportunities we little picked up do bit that. a have

M&A. the So of those - are kind that’s

But we carbon low of there. that fit is different and not technologies our with is to looking because story big something like ventures, there are talking is here. strategy growing we for feel are are strategy. And what that we business need a bit That do. So that support respect M&A within not a that doing a our we we to

XXX where to tech are companies. approach, not different shotgun are We the little small putting take we going dollars into

find looking we And what technologies are going ultimately. investments for make are want to we equity better. We that to when where we build our a of it’s strategy we part make feel those,

million, spent fairly us have One than I carbon has team into a are technologies, at just gotten capture. $XXX generates a with revolutionary. electricity think gas low the they is plant which traditional lower NetPower, two think about I really with cost,

technology power but also that captures So the generates electricity, emissions.

no So organics volatile that. or and emissions no anything there are like

it for industry I going is And be believe, to the around important NetPower, Back generation capture. really for revolutionary, is direct electric then world. the NetPower to So power air us.

has is real that is air is the at the other important that to. technologies. technology that kind and at are things carbon few we those So is money of - that business. And improve a There our believe are opportunities. are into we And we investments to we to look chance looking critically a capture putting direct are that some way

Neal Dingmann

wondering for preferred, Okay. any on just just there just find of one company. one And that all. firm direct you Jeff. given just then same of the as countered your a and - last is is the Obviously, is lot Maybe obviously this, back to Robert either there mind. conversation would by or in about going debt equity those maybe repurchase or the be I’m

Vicki Hollub

going evaluation part we really a of is as comprehensive It to forward. go more a be

framework with proceed what updated. do is and So we the and will will to intend the you best time decision capital we as passes, have we look at value that certainly keep guys But laid that we make out.

Operator

Next from Wai question Please ahead. from Jeanine comes Barclays. go

Jeanine Wai

Hi Thanks for good everyone. questions. our taking afternoon

now I guess, back the is on a XXXX-plus due. cash questions. and they follow-up maturities to retire come debt for as first heading other Our question, maybe couple returns of The plan a and

really We nothing there any are billion due one-year. in looking at debt your like schedule, than coming and is more $X

XXXX. So super manageable until

$XX call billion end year. You building like to, have cash got by strip the the on our of on it, model

So lots of options.

updated helpful on the year over is or reserve that, going lot there realize a the is You hold capital to us. you comments a have above macro helpful had allocate reasons cash your to We two. you that always on how view are level? next on but Do some of an number for governors cash

Vicki Hollub

Yes.

about I Before that you the just for say I Rob to want to answer that debt to that are right pass our question, maturities.

would macro we the down So billion billion. be we Then $XX we what that down want all to those close have able script us the to would $X.X of get billion. debt that August, which XXXX. maturities $XX $X based three-years don’t to to end our before billion would get August expect from to billion, them, our to this his wait mentioned to by of - come to lower We $XX get Rob year us debt to on is due, of in another see

So $XX we assuming We that rather to, the later. than to considerably. allows the get do macro would cut to expect sooner billion to want

us. we is So to pass in. for will will that that question. other still for the a I it now And fit priority Rob

Robert Peterson

Jeanine. Yes,

to on macro the for do And so part consistent the debt opportunistically should to or share been prices and And be we targeting on Vicki the relative the repurchase what certainly But balance listed the you $X.X have the maturities now. fact able for of is left be able billion program, will balance said we some strip right that to based well the we of long-term target, between have assuming just and maturities. beyond year short- of off.

later the decade, move it on year-to-date, the -. In in about XX%. As XX% about is we current

including interest And down ones they opportunistic bonds. coupon achieving maturities, ones interest of because so come out that now on near-term the higher we continue rates, to way knocking have discount also longer-dated but rate are between be

that So you to stay expect can mix together.

higher very billion. manageable Historically, we cash debt a last about as ended reserves, As been with profile, we $X.X holding maturity certainly have year far cash levels.

I just reserves. year the this certainly think comfortable $X cash on of something X.X with this of billion we with from year, the would another reduction by to providing to closer work be end

Jeanine Wai

to that Okay. the is Permian. Great. could operations thank very Maybe helpful. turn you we and if

in QX really of sounds deck Thank that would favor the But I in stuff midpoint. year come to any how some people the in end of which XX% the there probably the on comments of think Permian be think your lot And QX, because year. is that are the guidance out execution at prepared back I you some just for, that it at hit And You implications calculated help. around looking to the comments, color stack implied third-party helpful for we provided in going you XQ the from quarter-on-quarter QX on in Permian remarks. Permian try calls are on guide a trying have may figure Permian increase like your online will really helpful the your you. kind that and next to

Richard Jackson

Well, are pieces. it. there few appreciate Yes. I a

half You entered There are for of exactly where we that several was about thought we even security important If the our right to this in pieces the delivery were production I - and started sort count if XXXX. year. we are about have XXXX, year back rig to added you building go us. this XX.X we of year, of go first a of from to perspective, half from rigs second the the at went back over year half XXXX second to

the to secure operated those was And being early important so able rigs really to get performance us. to

wells I at So If second half we first online compared to look versus half, XX same this thing first of half to add half. the look in the back more year. about

So in activity. a tremendous step-up

put We efficiently to frac cores have are able utilize more our we plans with together. the development that

Most operationally online back getting capital production year with with half the performance. XX% done that have are I Third in are operations but A. wells much has creating of guess second capital. adding and Bone the to deliveries are We more in second half have been pieces would really Wolfcamp coming what what of those year, transition on Springs important to, we this the Delaware, and us for of the And we point is smooth of to additional the I the the OBO that we are about to

a derisks terms in it delivery. that So production of lot

lateral added have We length.

when year. to second this We longer compared they look to of last are half year the X,XXX-foot at

is first of XX-hour about half year. better Our than last the IP XX%

efficiencies second added the has the Drilling half derisking that of terms in all of year. improved. so And completion of

up quarter-to-quarter is day XX%. feet Our per about

in time nonproductive Delaware. Our the reduced is about X%

have have And been is team. improve. year, a continues work The And we half expecting XX% added of time-to-market improvement an these second able to have we what at the performance seen looking we as rigs, operations. operational so we to the those with are about

year, has to now and well built we really, So put to production this on half of you the go place first in we noted, a growth execute. are achieve in the lot that But pieces our just been need way. plan of

Operator

question final Goldman from Neil Sachs. The comes Mehta go from Please ahead.

Neil Mehta

Yes team. good afternoon

terms out any And you that? timing community think the of recognizing question is you milestones to first The going your to to business? your control? investment grade. are into get in should investment mean just achieve Can that order How about the provide color path the of to would in what investment grade

Robert Peterson

Yes, Neil, sure.

our target for XX% would occurring that, zero annual mentioned, risk we paid So billion quarter, beyond year. of debt, the in $X established associated included And coupon call certainly that year-to-date, as the $X.X was the second October. with far we out bonds we initial knocked in of we what I billion the every

of debt. of look retired you last almost year $XX of we July - to year, If back or last June billion

reduction progress to meaningful debt other So IG. it. I reduction, the three agencies their side addition very will But own metrics, debt all in call of have return the on them, the

below. sitting, And one discussed, as so are they all notch we

internally again, comfortable, high-yield slip to look at adjusted to exclusive that But comfortable be last us we long-term oil oil many the not than the and greater being prices into does on suggest, conversation of the of end to environment the include said, like dividends. a been half the flow all criteria that oil cases, they have ahead before the actually corn are they want the that debt I would preferred majority below Berkshire. But essentially I year we that price in for just retained forecast retained the type back we cash agencies well Moody’s, But of we of with of have flow example, a having prices different get adjusted now be cash or, you the and would in like have want to basis. agencies XX-month more exceeding the would Our these credit. XX% debt have

that. the Berkshire does factor into So

Fitch, expense. - covered ours. are at I from for included are relative funds preferred but we example. ahead mid-cycle in flow, it to And we also excluded that from so give adjusting our of just And price well They sort it And the you is is funds look the times. Moody’s in forecast case The even X.X of an operation forecast. will interest of

are going this We times to well certainly by be year X.X year-end. over

probably are agencies very on more I the or of think so we much And passing statistics, in than lot rapidly suspected we a these rapidly these through suspected.

that them the very having making making are towards sure that. constructive are we and We conversations are decisions with contributing

shown said, of those but metrics various year. be that have confident policy and have all I in that the control looking with toward over our that end relative stead comfortably of would you we don’t feel financial in As to the occurs, ultimate metrics. good the we they all when at us

expectations a the going but that confidence two those of terms that agencies end the thus have gap I’m Moody’s, only metrics out that the meet at We a have that on year. we for debt, us with S&P’s significant in in we laid to gap reported certainly with of explicitly now. is what and Fitch they can one But on are really right far

Operator

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

Vicki Hollub

want your Thanks. call to Just our and day. thank a you all in participation have today, good for

Operator

Thank for This presentation. attending today’s concluded. now has you conference

disconnect. may You now

Occidental Petroleum Corporatio (OXY) 3 Aug 222022 Q2 Earnings call transcript