OCCIDENTAL PETROLEUM CORP /DE/ (OXY) Q4 2024 Earnings Summary

Executive Summary

• Adjusted EPS of $0.80 contrasted with a GAAP diluted EPS loss of $0.32, driven by $1.1B after-tax environmental liability increase from a federal court ruling; management appealed and expects remediation cash outlays over 10–20+ years .
• Strong operations: total production 1,463 Mboe/d, exceeding guidance midpoint by 13 Mboe/d, with record U.S. quarterly production and all three segments outperforming guidance; operating cash flow reached $3.556B in Q4 .
• Balance sheet de-risking and capital returns: near-term debt repayment target of $4.5B achieved; announced $1.2B divestitures to reduce 2025 maturities; quarterly dividend raised 9% to $0.24 per share (payable Apr 15, 2025) .
• 2025 outlook: full-year production ~1.42 Mboe/d with oil cut rising to ~52%, total capital $7.4–$7.6B (front-weighted), OxyChem pretax midpoint ~$1.0B, and $200M crude transport cost savings in 2025 ($400M in 2026) .
• Estimate comparison: S&P Global consensus data was unavailable at query time; no EPS/Revenue consensus used. Values from S&P Global could not be retrieved due to API limits.

What Went Well and What Went Wrong

What Went Well

• Outperformed guidance across all segments; “record U.S. production while improving our capital efficiency… fourth quarter operating cash flow enabling us to achieve our near-term debt repayment target” — CEO Vicki Hollub .
• Reserves sustainability: year-end proved reserves of 4.6B BOE; all-in reserves replacement 230% and organic 112%, supporting long-term durability .
• Capital efficiency and deleveraging: Q4 operating cash flow of $3.556B and free cash flow before working capital of $1.350B; completed $4.5B near-term debt repayment; announced $1.2B divestitures to further reduce debt .

What Went Wrong

• GAAP loss: Q4 reported net loss attributable to common shareholders of $297MM (−$0.32 diluted EPS) due to $1.1B after-tax environmental liability increase from a court ruling, despite adjusted EPS of $0.80 .
• Price headwinds: average worldwide realized crude fell 7% QoQ to $69.73/bbl; midstream reported a pre-tax loss of $134MM including net derivative losses of $88MM .
• OxyChem sequential decline vs Q3: pretax income $270MM in Q4 (down from $304MM), primarily lower PVC pricing and seasonal demand, partly offset by favorable commercial thresholds .

Financial Results

Revenue, EPS, Production Trend vs Estimates (S&P unavailable)

Note: S&P Global consensus values were unavailable at query time; no estimate comparison included.

Q4 YoY (Q4 2023 vs Q4 2024)

Segment Breakdown (Reported Income, Before Tax Allocations)

KPIs and Realizations

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “Outperforming guidance across all three segments and delivering record U.S. production while improving our capital efficiency” — Vicki Hollub .
• “We achieved our near-term debt repayment target of $4.5 billion… additional differentiators are our 2024 all-in reserve replacement of 230% and organic reserves replacement of 112%” — Vicki Hollub .
• “Total capital for the year is expected to be between $7.4 billion and $7.6 billion… front weighted to the first half” — CFO Sunil Mathew .
• STRATOS commissioning sequence and milestone path to initial CO2 capture were outlined (fans, bays, pelletization, calciner start-up, compression/injection) — Ken Dillon and team .

Q&A Highlights

• Gulf of America 2025 plan: platform turnarounds add ~16kbd, six wells add ~18–22kbd, production engineering adds ~4–7 Mboe/d; long-term aim to keep GoM flat, with “Gulf of America 2.0” low-decline, low F&D projects .
• Midland Basin JV with Ecopetrol extended; ~23 wells planned; “terms similar to before” and included in 2025 guide .
• Rockies: ethane rejection to improve margins/revenues; infrastructure spend (Bronco) unlocks ~140 locations at <$50 breakeven; PRB activity resumes H2 .
• Drilling & completion: 2024 achieved ~12% cost improvement vs 2023; 2025 targets ~7%; ~$1MM per well savings in Midland already embedded .
• Oil mix: company oil cut expected to rise to ~52% in 2025, driven by Permian growth and U.S. offshore uplift .

Estimates Context

• S&P Global consensus EPS and revenue for Q4 2024 were unavailable at query time due to API limits. No beat/miss versus consensus is included.
• Implication: Analysts may revisit models for 2025 given production trajectory (~1.42 Mboe/d), midstream transport savings ($200MM in 2025; $400MM in 2026), OxyChem midpoint ~$1.0B, and higher oil cut (~52%) .

Key Takeaways for Investors

• Non-GAAP strength vs GAAP headline: Adjusted EPS $0.80 with robust cash generation, but GAAP loss from environmental liability — expect limited near-term cash impact with multi-decade remediation .
• Operational momentum: sustained production outperformance and improved well costs underpin FY25 volume stability with modest oil growth and higher oil mix .
• Balance sheet trajectory: deleveraging ahead of plan; $1.2B divestitures applied to 2025 maturities; dividend raised 9% — supports capital return narrative as interest costs fall .
• Midstream normalization offset by structural savings: narrower gas optimization opportunities countered by crude transport contract revisions (~$200MM 2025; ~$400MM 2026) .
• OxyChem: near-term headwinds (weather/outage/raw materials) temper Q1; FY25 midpoint ~$1.0B pretax with rationalization expected to rebalance pricing in H2 .
• Strategic projects: STRATOS commissioning in 2025; DAC optionality for EOR and sequestration positions OXY for low-decline, low-F&D barrels longer term .
• Trading lens: Near-term stock reaction likely hinges on reconciling GAAP loss headline vs strong adjusted results and dividend raise; medium-term thesis supported by deleveraging, oil-weighted mix, and structural cost savings .

Sources

• Q4 2024 Form 8-K and Exhibit 99.1 press release and schedules .
• Q4 2024 earnings call transcript (Feb 19, 2025) .
• Press releases: Fourth Quarter 2024 Results (Feb 18, 2025) ; Further Progress on Debt Reduction (Feb 18, 2025) ; Offer to Exercise Warrants (Mar 3, 2025) .

S&P Global consensus data was unavailable at query time; no estimates are included.