• Free Cash Flow: $4.9 billion generated in 2024.
• Common Dividends: Approximately $800 million paid, with a 22% increase in quarterly dividends.
• Debt Repayment: Achieved $4.5 billion debt repayment target seven months ahead of schedule.
• Capital Spend: $6.8 billion, at the low end of guidance.
• US Oil Production: Record annual production of 1.33 million BOE per day in 2024.
• Lease Operating Expenses: Reduced by approximately 9% per barrel.
• Well Costs: Lowered by roughly 12% across all unconventional basins.
• Proved Reserves: Increased to 4.6 billion BOE, highest in Oxy's history.
• Reserves Replacement Ratio: 230% all-in and 112% organic for 2024.
• OxyChem Pre-Tax Income: Over $1.1 billion in 2024.
• Fourth Quarter Free Cash Flow: $1.4 billion generated.
• Fourth Quarter Adjusted Income: $280 million for OxyChem.
• Global Production: 1.46 million BOE per day in Q4, setting a record for US quarterly production.
• Adjusted Profit: $0.80 per diluted share in Q4.
• Reported Loss: $0.32 per diluted share in Q4 due to environmental remediation liability.
• Unrestricted Cash: Over $2.1 billion at the end of Q4.
• 2025 Capital Plan: $7.4 billion to $7.6 billion, with a focus on short-cycle, high-return assets.
• 2025 Production Guidance: Approximately 1.42 million BOE per day.
• OxyChem 2025 Pre-Tax Income Guidance: Midpoint of $1 billion.
• Midstream Segment 2024 Performance: Surpassed guidance by approximately $600 million.

• Warning! GuruFocus has detected 2 Warning Sign with OXY.

Release Date: February 19, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Occidental Petroleum Corp (NYSE:OXY) generated $4.9 billion of free cash flow in 2024, enabling significant dividend payments and a 22% increase in quarterly dividends.
• The company achieved its near-term debt repayment target of $4.5 billion seven months ahead of schedule, improving its balance sheet.
• OXY achieved record total company production of 1.33 million BOE per day in 2024, exceeding the upper end of full-year guidance.
• The company increased its year-end proved reserve balance to 4.6 billion BOE, the highest in its history, with an all-in reserves replacement ratio of 230%.
• OxyChem outperformed expectations, achieving over $1.1 billion in pre-tax income in 2024, and the midstream segment also performed exceptionally well.

Negative Points

• Occidental Petroleum Corp (NYSE:OXY) reported a loss of $0.32 per diluted share in Q4 2024 due to an increase in long-term environmental remediation liability.
• The company's 2025 capital plan is front-weighted, which may pose risks if market conditions change unfavorably.
• OxyChem's earnings are expected to decrease slightly in 2025 due to higher raw material costs and an oversupplied market in the first half of the year.
• Midstream earnings are expected to be slightly lower in 2025 due to reduced opportunities for gas transportation optimization.
• The company faces challenges in ramping up its STRATOS project, with minimal contribution expected in 2025 due to the timing and ramp-up period.

Q & A Highlights

Q: Can you provide an outlook for the Gulf of Mexico in 2025, including any maintenance activities and projects contributing to growth? A: Kenneth Dillon, Senior Vice President and President, International Oil and Gas Operations, explained that the Gulf of Mexico will have a busy year with maintenance and life extension activities scheduled to avoid hurricane season. Two platforms will undergo turnaround, adding about 16,000 barrels per day when back online. Six wells are planned for drilling, expected to add 18,000 to 22,000 barrels per day. Production engineering activities should add another 4,000 to 7,000 BOEs per day. Overall, production is expected to range from 141,000 to 150,000 barrels per day for the year.

Q: What are the terms of the extended JV with Ecopetrol in the Midland Basin, and is it included in the 2025 guidance? A: Vicki Hollub, President and CEO, stated that the terms are similar to the previous agreement. The project will involve drilling about 23 wells and is included in the 2025 guidance.

Q: How do you see the Rockies program evolving over the next few years, given the lower activity level and flat CapEx? A: Richard Jackson, President Operations, U.S. Onshore Resources and Carbon Management, noted that the Rockies program benefits from improved efficiency, with drilling and completion costs down by about $100 million. Infrastructure investments in the DJ Basin will provide 140 locations with sub-$50 breakevens over the next three years. The Powder River Basin will resume activity in the second half of the year, offering competitive program opportunities for the future.

Q: What are your thoughts on reaching the $15 billion net debt target by late 2026 or early 2027? A: Vicki Hollub expressed confidence in reaching the target, likely by early 2027, with opportunities to supplement cash flow from operations to achieve this goal.

Q: What are the key challenges and milestones for the STRATOS start-up, given its new-at-scale commercial system? A: Kenneth Dillon outlined the start-up sequence, including pumping water, running fans, injecting water, and starting pellet production. The goal is to capture CO2, with milestones associated with each step. Richard Jackson added that the focus is on reducing operating expenses and increasing capacity during the commissioning process.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.