Occidental Petroleum (OXY) Q3 Earnings call transcript Nov 13, 2024

In their latest earnings call, Occidental Petroleum showcased a robust and dynamic business strategy that has propelled the company to new heights. The third quarter of 2024 witnessed exceptional operational performance, with the company generating $1.5 billion in free cash flow, exceeding guidance in all three segments, and setting a new record for U.S. production.

Strategic Acquisitions and Integration

Occidental's strategic acquisition of CrownRock has proven to be a game-changer, bolstering the company's Permian footprint and unlocking operational efficiencies. The integration of CrownRock's assets has led to significant synergies, including improved recovery per dollar spent and enhanced supply chain utilization. The combined teams are now sharing best practices and constructing a 2025 development plan, envisioning a consistent level of investment in the premier Permian asset next year.

Financial Performance and Debt Reduction

Occidental's financial performance in the third quarter was marked by a $1 per diluted share adjusted profit and a reported profit of $0.98 per diluted share. The company's strong operational performance, coupled with a disciplined approach to capital expenditures, has allowed for a $4 billion repayment of debt within just two months of the CrownRock acquisition. Occidental remains dedicated to achieving its medium-term principal debt target of $15 billion, with no remaining 2024 debt maturities and sufficient cash to cover the remaining 2025 maturities.

Looking Ahead

The company's outlook for 2025 is promising, with a focus on low carbon ventures and operational excellence. The construction of STRATOS, the largest direct air capture facility in the world, is progressing smoothly, and the company anticipates bringing the initial 250,000 tonnes per annum capacity online in mid-2025. Additionally, Occidental is advancing its South Texas DAC project, which has recently received significant support from the U.S. Department of Energy. These initiatives underscore Occidental's commitment to innovation and sustainable growth, positioning the company as a leader in the energy transition.

Conclusion

Occidental Petroleum's exceptional third quarter performance, strategic acquisitions, and focus on low carbon ventures highlight the company's resilience and strategic vision. With a strong financial position and a clear path to debt reduction, Occidental is well-positioned to navigate the evolving energy landscape and capitalize on opportunities in the Permian Basin and beyond. As the company continues to innovate and invest in its future, it is poised to deliver value to shareholders and contribute to the global energy transition.