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Occidental Petroleum Corporation (OXY) is a multinational energy company engaged in the exploration, development, and production of oil, natural gas liquids (NGL), and natural gas, with operations in the United States, the Middle East, and North Africa . The company also manufactures and markets basic chemicals and vinyls through its chemical segment, Occidental Chemical Corporation (OxyChem) . Additionally, Occidental is involved in midstream and marketing activities, which include optimizing transportation and storage capacity and advancing low-carbon ventures .
- Oil and Gas - Engages in the exploration, development, and production of oil, natural gas liquids (NGL), and natural gas, with significant operations in the United States, the Middle East, and North Africa .
- Chemical - Manufactures and markets basic chemicals and vinyls, including chlorine, caustic soda, and polyvinyl chloride (PVC), through Occidental Chemical Corporation (OxyChem) .
- Midstream and Marketing - Supports the oil and gas and chemical businesses by optimizing transportation and storage capacity, and includes low-carbon ventures focused on carbon capture, utilization, and storage (CCUS) projects .
- Low-Carbon Ventures - Focuses on reducing greenhouse gas emissions and developing new low-carbon technologies .
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Given the current volatility in oil prices and a macro environment where oil demand may not increase significantly, how do you justify maintaining or increasing capital expenditure in your U.S. onshore portfolio, particularly with the integration of CrownRock assets?
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Can you provide more details on your deleveraging strategy, specifically how you plan to achieve your medium-term principal debt target of $15 billion while also investing heavily in projects like STRATOS and the OxyChem expansion?
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With the increased capital budget of approximately $900 million in 2025 for OxyChem, up from $200 million this year, what assurances can you offer that the expected $325 million uplift in earnings will materialize, especially given potential market uncertainties?
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The integration of CrownRock assets is expected to bring synergies and operational efficiencies; can you quantify these synergies and explain how they will impact your cost structure and production targets in the near term?
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Considering the substantial investment in your Direct Air Capture (DAC) projects like STRATOS, can you elaborate on the risks associated with the technological advancements and the phased construction approach, and how these might affect your timelines and returns?
Recent developments and announcements about OXY.
Financial Reporting
- Average Diluted Shares Outstanding: 983.9 million shares for Q4 2024.
- Oil:
- United States: $69.27 per barrel
- International: $72.55 per barrel
- Total Worldwide: $69.73 per barrel
- Natural Gas Liquids (NGL):
- United States: $21.14 per barrel
- International: $27.11 per barrel
- Total Worldwide: $21.80 per barrel
- Natural Gas:
- United States: $1.26 per Mcf
- International: $1.88 per Mcf
- Total Worldwide: $1.41 per Mcf.
- Worldwide Oil:
- Realized prices were 99% of WTI and 94% of Brent.
- Worldwide NGL:
- Realized prices were 31% of WTI.
- Domestic Natural Gas:
- Realized prices were 47% of NYMEX.
- The report highlights that the earnings considerations are preliminary and subject to finalization. It does not provide a comprehensive view of all results or adjustments for Q4 2024.
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Net Income: The company reported a net income attributable to common stockholders of $964 million, or $0.98 per diluted share. Adjusted income was $977 million, or $1.00 per diluted share .
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Operating Cash Flow: Occidental generated an operating cash flow of $3.8 billion, with operating cash flow before working capital adjustments at $3.1 billion .
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Free Cash Flow: The company achieved a free cash flow before working capital of $1.5 billion, supported by capital spending of $1.7 billion and contributions from noncontrolling interests .
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Production: Total company production was 1,412 thousand barrels of oil equivalent per day (Mboed), exceeding the mid-point of guidance by 22 Mboed. The Permian Basin led this performance with an average production of 729 Mboed .
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Debt Reduction: Occidental repaid $4.0 billion of debt, reaching nearly 90% of its short-term debt reduction target .
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Segment Performance:
- Oil and Gas: Pre-tax income for this segment was $1.2 billion, with adjusted income increasing from the previous quarter due to higher sales volumes, despite lower realized commodity prices .
- OxyChem: The chemical segment exceeded guidance with a pre-tax income of $304 million, maintaining flat income compared to the second quarter .
- Midstream and Marketing: This segment reported a pre-tax income of $631 million, including significant gains from the sale of common units in Western Midstream Partners, LP .
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Commodity Prices: The average worldwide realized crude oil price was $75.33 per barrel, a decrease of 6% from the prior quarter. Natural gas liquids prices also saw a decrease, while domestic gas prices fell significantly by 26% to $0.40 per Mcf .
Earnings Report
Occidental Petroleum Corporation (OXY) has released its Fourth Quarter 2024 Earnings Considerations as of January 10, 2025. Below are the key highlights from the report:
Earnings Considerations
Realized Prices
Comparison to Index Prices
Significant Trends
This information provides a snapshot of Occidental's financial performance and market realizations for the fourth quarter of 2024. For further details, refer to the full earnings considerations document.
Earnings Report
Occidental Petroleum Corporation (OXY) Third Quarter 2024 Earnings Results
Occidental Petroleum Corporation has released its financial results for the third quarter of 2024, showcasing strong operational performance across its segments. Here are the key highlights:
These results reflect Occidental's robust operational capabilities and strategic focus on debt reduction and efficient capital management, positioning the company well for future growth and stability in the energy sector.
Financial Actions
- Cash Consideration: Approximately $9.4 billion, inclusive of working capital and other customary purchase price adjustments.
- Stock Consideration: 29,560,619 shares of Occidental's common stock were issued to the sellers.
- Debt Assumption: Occidental assumed $1.2 billion of existing debt from CrownRock and its subsidiaries .
- Strengthened Portfolio: The acquisition is expected to enhance Occidental's asset portfolio, making it more robust and differentiated, according to Vicki Hollub, President and CEO of Occidental .
- Operational Synergies: The integration of CrownRock's assets and team members is anticipated to create a high-performing employee base focused on developing low-emission, low-cost energy .
- Financial Impact: The transaction involves a significant cash outlay and stock issuance, which may affect Occidental's cash reserves and shareholder equity. The assumption of debt could also impact the company's leverage ratios .
Strategic Assets
Occidental Petroleum Corporation Completes Acquisition of CrownRock
On August 1, 2024, Occidental Petroleum Corporation (NYSE: OXY) announced the completion of its acquisition of CrownRock, L.P. The transaction was valued at approximately $12.4 billion, which included $9.4 billion in cash, 29,560,619 shares of Occidental's common stock, and the assumption of $1.2 billion of CrownRock's existing debt .
Details of the Transaction
Potential Effects on Occidental's Financials and Operations
This acquisition aligns with Occidental's strategy to expand its presence in the energy sector, particularly in the U.S., and to advance its low-carbon initiatives .
Dividend Policy
Occidental Petroleum Corporation (OXY) has announced an increase in its quarterly common stock dividend per share by $0.04, raising it to $0.22. This change will take effect beginning with the February 2024 declaration. This decision aligns with the company's shareholder return priorities and follows the acquisition of CrownRock's assets, which is expected to generate immediate free cash flow accretion and support the dividend increase .