Occidental Petroleum Reports Fourth-Quarter Loss

Occidental Petroleum (OXY) reported a net loss of $297 million, or $0.32 per diluted share, for the fourth quarter of 2024, compared to a net income of $1.2 billion in the same period last year. The company attributed the loss to a long-term environmental liability increase based on a recent federal court ruling. Despite the loss, Occidental's adjusted income attributable to common stockholders was $792 million, or $0.80 per diluted share, reflecting strong operational performance across all three segments.

The company's oil and gas pre-tax income for the fourth quarter of 2024 was $1.2 billion, compared to $1.2 billion in the third quarter of 2024. Occidental's average worldwide realized crude oil prices decreased by 7% from the prior quarter to $69.73 per barrel, while average worldwide realized natural gas liquids prices increased by 6% to $21.80 per barrel. Average domestic realized gas prices increased by 215% to $1.26 per thousand cubic feet (Mcf).

Occidental's total average global production of 1,463 thousand barrels of oil equivalent per day (Mboed) for the fourth quarter of 2024 exceeded the mid-point of guidance by 13 Mboed, led by Permian and Rockies Other Domestic, while Gulf of America and International average daily production both came within guidance.

As of December 31, 2024, Occidental's worldwide proved reserves totaled 4.6 billion barrels of oil equivalent (BOE), compared to 4.0 billion BOE for the same period in the prior year. Proved reserve additions were mainly driven by purchases of 623 million BOE, primarily from the CrownRock Acquisition, extensions and discoveries of 326 million BOE, mostly in the Permian Basin, and positive revisions associated with infill development projects of 112 million BOE, primarily in the DJ and Permian Basins. The 2024 Reserves Replacement - All-In was 230% and the three-year average Reserves Replacement - All-In was 181%. The 2024 Reserves Replacement - Organic was 112% and the three-year average Reserves Replacement - Organic was 137%.

Occidental's OxyChem pre-tax income exceeded guidance at $270 million for the fourth quarter of 2024. The decrease in fourth quarter OxyChem income, compared to third quarter of 2024 income, resulted primarily from lower realized polyvinyl chloride (PVC) pricing and lower seasonal fourth quarter demand across most product lines. This decrease was partially offset by advantageous commercial thresholds triggered in the fourth quarter.

Midstream and marketing pre-tax results for the fourth quarter of 2024 reflected a loss of $134 million, which included net derivative losses of $88 million. WES equity method investment income for the fourth quarter was $142 million.

Occidental's strong operational performance drove operating cash flow of $3.6 billion and operating cash flow before working capital of $3.1 billion. Capital spending of $1.8 billion and contributions from noncontrolling interest of $54 million resulted in quarterly free cash flow before working capital of $1.4 billion.

In conclusion, Occidental Petroleum's fourth-quarter results reflect a challenging environment, with a net loss driven by a long-term environmental liability increase. However, the company's strong operational performance and reserve replacement rates indicate its long-term sustainability. As Occidental continues to manage its debt levels and invest in growth opportunities, it is well-positioned to capitalize on future growth in the oil and gas industry.