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Occidental Petroleum (OXY)

Participants
Neil Backhouse Director, IR
Vicki Hollub President and CEO
Rob Peterson SVP and CFO
Ken Dillon President, International Oil and Gas Operations
Devin McDermott Morgan Stanley
Jeanine Wai Barclays
Paul Cheng Scotiabank
Doug Leggate Bank of America
Brian Singer Goldman Sachs
Phil Gresh JP Morgan
Roger Read Wells Fargo
Call transcript
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Operator

Good morning and welcome to the Occidental Third Quarter 2020 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Neil Backhouse, Director of Investor Relations. ahead. go Please

Neil Backhouse

Good in Grant. and you thank Thank third morning, quarter participating Occidental’s XXXX for you, everyone, conference call.

with on Officer; available Vice This morning, On and President, International on that Officer; call our Vicki, us will Gas Investors Vicki The Dillon, are the presentation over Operations. and Hollub, made and statement section Chief will cautionary statements Ken forward-looking of Executive call website. call and refer I’ll Rob President Senior slide we the Oil please morning. Peterson, regarding on Chief a X the Financial this now the be today includes President to slides go turn ahead. Vicki. to

Vicki Hollub

Thank you, and morning, Neil, good everyone.

completion and operational are our synergies, Our operations, the bear our cost quarter. accomplishments by and to synergies sheet. and room earlier with excellence, expect the forward. as reduction extension and strengthen evidenced early benefiting maturities, executing generated previously debt we billion continued almost in cash third provided year, OpEx of $X.X overhead running fruit, the in of measures balance combined we going in continue our of successful divestitures to from us the in third The financial to continued necessary notably our our now free our embedded progress detailed improved structure savings and have flow a position enhanced this cost with we quarter ongoing The our implemented including

our progress, on created groundwork will activity, lay de-leveraging. benefits the of morning, production. uplift. our have results while we any potential crises the positioned guidance and to as I’ll our being for to as plans This equipped adapt financial for increased leverage of to We our divestiture current as future quickly and Rob provide updates well are runway cover future we commodity stabilize

and diligent strong by continuing preservation, attention on cash to businesses of generation to focus was reflect performance free our quarter third driven our margin flow the Our excellence. operational

guidance BOE of demonstrate of reduction costs year. our of were operational performance Our oil domestic costs downtime our Production by per our businesses an gas original per of guidance from for quarter. operating X.XX exceeded operating BOE unusual $X.XX our our in exceeded as this below expectations We BOE domestic day in the costs costs named and the All production operating operating resulting measures day, in per and Gulf per with for significantly third the BOE continuing delivered the of despite production storms, lasting capital operations cost number strong impact higher-than-expected $X.XX lower-than-expected midpoint million Mexico. the and of XX,XXX of quarter.

storm, would the have we impact production Excluding incremental from high our achieved guidance. of end the the

performance in was and well by outperformance Resources. operational strong Permian improvements driven operability in primarily Our continued

to our bringing talk want macro with position the This opportunity low-cost While being than applying retain completion of our a we leveraging Company’s as success, up plans have to teams development ourselves continued Permian our for set constantly a how and a of examples improve. is acquired will abilities improve to to advantage. in allowing understanding of Anadarko are best-in-class Texas reiterate latest operator Silvertip ran is plans, third which Delaware, designs. the leadership changing best are area, This -- macro on another flexibility a we activity combined by high flexibility of our as I’ll combined but former of degree well competitive their conditions moment, results us to a with our a the one continue to adapt activity, subsurface environment. our broke on lower that and normal this capital operational the take in to In quarter, team acreage. our to assets record the just we a well strengths and to our will Oxy in better knowledge line and advance a newly ramp In the touch

closing of sell that set and With onshore on exceed X-plus-billion-dollar the and surface Colombia, the in Wyoming, assets mineral an reaching in track agreement to acreage XXXX. for the and we Utah, are to Colorado our target we

close of closed later, of the We asset the on in divestiture of being we completed worst despite billion a be of established within acquisition. net months At target since divestitures asset close taxes, asset almost announced after XX $X have time the the the billion $XX to for XX months or closing of lower to our target, end our now acquisition, possibly market divestitures, XXXX the of billion Anadarko $XX to in the acquisition. of industry. history XX we are original the

announced We XXXX, XXXX. of half in billion are the in an $X targeting additional billion sales to or be assets of to first $X

completion divestitures, the close. have our additional With will from of than divestiture less we in acquisition months targets these met XX

divestiture realization we close As and we’ve not sacrifice value quickly. said balance timing transactions will with to will before, value

scale decline, sheet. on review debt reducing sales additional portfolio will and by primarily divestitures we recognize the be target is free of of ensure $XX The be flow meeting to least our billion scale. debt. the completion debt to large driven continuously further flow impactful reduction. we cash our our a proceeds free reducing will These meet in mark go debt program optimal generation and asset sales efficiency have maturities. asset utilization including expected be must our the towards capital cash our attributes, will applied and at reduction from original balance to of continue we mix strengthening debt While We complete, do in of will low large divestiture divestiture Once asset

another team Permian record-setting Resources Our quarter. delivered

day. and three-well Silvertip a reductions set pad, Midland new settings over our Mexico, Silvertip a implemented. for a XX-hour hours team wells single mentioned, an brought record for in where Delaware record record per over in of total broken pumping hit with a on Delaware In time the record rate well Texas our cost the drilled section bringing peak completed new that while reduction. Texas before The quarter, a on Permian-wide New the the well our line well despite set feet drilling our our I’ve were target average XX over by of per As being team Permian completion team X,XXX full in wells These were Oxy X,XXX Basin BOE wells by day synergy achieved cost achieved third in cost were day.

costs, current performance drilling savings future our on to continue hookups. lowering based and expect on We

means are Our than define operability through operational results, also our costs just well efficiency improvements, consistently down excellence. delivering delivering strong what driving design philosophy, business well and consistently and lowering are other improving while units operating with of Operational superior results with operating D&C our excellence collaboration the vendors. safely as costs along we bedrock more optimization, then

to Basin continuously to XXXX increase and is budget After we by the the in the quarter instilled running per in JV XXXX. fourth of team’s quarter. the $X teams, to returned impressive Mexico lower modest third progress October. more drillships is operating within two billion. BOE. are early Ecopetrol third of New the our improvement. year in downtime DJ $X.X of restarted each $X.X a partner, activity Texas, activity The operating has by billion the more two continuously of quarter Mexico, meaningfully our add Basin Midland the set Basin normalized in from to Basin. in This the full for Delaware, now Midland in plan be striving our reducing in resumption of rigs We in XXXX quarter below And achieved third third rigs commitment activity the costs and work evidenced to which we of made with team XX% activity to Our philosophy DJ a return Gulf in will by the our our capital quarter, And

remains Although year, proven activity we expertise reduced this drastically development earlier intact. our

efficiencies walk production through current and As maintain financial sustain over to maximize now who call we our runway you the results and industry-leading and we activity, hand guidance to Rob, intensity. deleveraging. capital to will increase operating I’ll our will

Rob Peterson

Vicki. Thanks,

assets slide results is reported loss adjusted $X.X for loss and divested per of billion quarter, of third book of accounting price reported to $X.XX the In adjusted the during due an our $X.XX the the the of of after-tax and eight. losses, fair a and declines we between unit quarter. primarily the value Turning WES announced value diluted related carrying to to to in value share. compared Difference

acquisition-related sizable across on the the quarter de now related is cash expected be last to charter mentioned last are earnings minimis. third the And of call, acquisitions million $XXX payment As payment.

of repositioned generating excellence, potential, before cash discipline structure, This $X.X cash highest balance enabled the free level capital on flow represents to price unrestricted sheet. with operational of September working reflects in and Oxy’s environment. generate free lower XXXX capital cash in quarter our since exit commodity Our cash the even $X.X and us flow a of cost billion billion

Our approximately $XXX overhead costs in million remained low, and the were quarter.

million quarter, to We in spending our the continue more of guidance. commitment to less CapEx than our XX% capital first $XXX demonstrate than discipline, below

be how normalized this we to more activity capital dynamic forward and do level to at spending. set, expect not return going our we with flexible development with remain pleased levels can capital As we are and

to generate cash and profile, in debt have our leveling ability Our maturity improved success enhanced position, resulted position. financial liquidity our in

in profile to the decision to dividend preferred we a XXth. made debt cash pay been has maturity result, the on October our a derisked that As point

preferred a basis. continue Directors the to Our dividend Board on will of payment review method quarterly

XXXX. cash review value to preserve profile, our to gas basis. XXX the almost flow our the we position XX% necessary dividend options Further at debt cubic view to only hedging of if level and shareholders’ of collar a payment costless We our preferred but pay As is implemented pulling, in with the cash, want have had to a profile, a of day, when dividend we per floor natural preferred for of holdings. maturity preferred liquidity a $X.XX, continue representing we feet derisk gas program our domestic our to on our that production. know the option million temporary shareholders and hedged We non-cash we we possible, manage

for later as guidance to associated future and our Colombia transaction XX,XXX we operation approach the In hedges oil this assets may closes, years. BOEs will the setting approximately continue hedging we have until with quarter. production expect excluded report We additional and fourth continuing which per for gas an and quarter, a basis opportunistic consider day on the

scheduled expect Mexico of Gulf base We as sequentially due combination assets. production the production and than many of quarter maintenance, as in the well additional lower to wedge the fourth impacts be of third quarter will across weather our declining

to begun off. has base asset our across level decline the Although

a average As we at production stabilize XXXX fourth to require quarter increasing fourth at spending the we our return quarter through restore activity, rigs our development will XXXX we minimum, add as and across in frac capital This intend highest assets. levels.

Our $X.X billion, we’ll approximately that fourth production sustain recent of capital assumption the and options we price evaluate quarter at level base our of volatility. considering current our case to commodity XXXX spending is production continue

We marginally and will costs in support will operating low continued operating our fourth expect remain costs our the conditions. to of increase normal overhead operating in return quarter. Domestic

divestiture necessary are room conditions. XXXX program, our current a Our maturities to XX in smooth our original debt years. began guidance basis. out to BOE more XXXX we the our $X X from by us at on have maturity billion running extended costs we operating a date, lower reflects market to to pace maximize in due than still XXXX with full year process than To that be expected XX% value The July profile, domestic to provides XXXX

transaction and million of of We in proceeds with million to us leaves have sales note October, This allocate with units deleveraging repaid floating the early retirement have billion remaining debt Accounting we the we more and XXXX which of of asset efforts, $XXX repayments XXXX early million term debt. million maturities percentage the billion for LP XXXX note. from a the year starting a of moved will remain for rate maturities. subsequent non-callable August of our In retiring only $X.X billion of maturities, to by $X.X $XXX XX $XXX $X.X third next including of as than proceeds we return balance our called during the of September receive resumed XXth, it WES also In exchange Colombia at billion debt the XXXX approximately the still was loan. loan fourth lower to than quarter. end quarter, term $X expect the maturities, and is we the from up our summary, $XX repayment,

additional Our new will entered improve. securitization liquidity facility to us million of financial position remains robust, approximately position receivable profile a $XXX and provide with recently that continues our into We liquidity.

had credit of billion unrestricted facility combined to back have succeed in turn confident that’s $X.X billion into success over am expect to XXth. steps our this I on $X remains outstanding, with will with the we letter will no we I current our Our the drive credit available approximately and low-carbon I undrawn September cash differentiators, the call environment. And future. now sustainably strategy, Vicki. long taken

Vicki Hollub

operational much skills We’ll changed knowledge, continuously our of into and XXXX excellence. for to quality as the has our pandemic success support improve and and teams industry, the our While will asset this Company track our of during of move build our beyond. base apply our and our continue record we

low-carbon worked in development this challenge, we We has to us further but still will slowed has stronger further before. as the work improve into our our activity have operations combined ingenuity diligently have future. been and than success and foundation our of balance laid development differentiated our with drive strategy from our technologies to to technical workforce, to teams recent the sheet we and our ensure months, long sustainability our our The of advance assets. for emerge world-class While innovation do, portfolio down exploit

the our section net-zero by our our available climate the the to we we carbon XXXX to Low call, expect intend I’d reach we a own to well by now which others technologies XXXX. our before detailed our be of products in for with services Before our footprint. call Q&A extending end developing impact open Ventures, the information use an also achieve announce with in and operations emissions emissions will sequestration Through I’ll target innovative release we associated to capture for work that and month. questions. and will of net-zero to our associated of have leadership net-zero beyond More Oxy help the achieve their turn ambition report, emissions Carbon your the like set goals,

Operator

first with ahead. Our question Stanley. Instructions] [Operator from will McDermott Please Devin Morgan go come

Devin McDermott

morning. for question. Good Thanks the taking Hey.

here are the improved about and question of where can closing Anadarko the transaction. So, near-term the base should or Resources. the that’s within I to And you portfolio, between terms you legacy strength the the of your is, I of out that I you portfolio -- some increased opportunity an really one should the the on about ask the guess, wanted improvement of Oxy is think some the production, the legacy in in about difference Permian of And is how strength the in across of kind uptime specifically production onshore is the what Anadarko, U.S. further size versus in say, more uptime of first know, called particularly all talked opportunity your I for there. onshore quarter, from you in since talk one U.S. we uptime? drivers

Vicki Hollub

also things that further number Basin, some that could they of some to where our done and Permian number Okay. then to of get that to of do associated just lower in that the system uptime issues done them we We’ve given try improve onshore that so occur was operability, and that and working which infrastructure the we easily organization. to so in get infrastructure scenario, and the the WES have improve the part could one, to of WES as electrical as start when they any the sooner. start with the occur such storms particular, issues things to of frequently electrical operations, them ultimately address the to was besides wells was ensure them up occur one we the isolate with some us production identify or issue of volume that -- increase our for opportunity On working wells to isolation that’s and impacted could, we

So, down optimized the to down reliability the sure more and secondly, just facilities around prioritization of that’s working facilities thing. infrastructure. It’s wells and it’s And operability been terms our reaction that was the have and in we’re the it really to one making out the we was Then, were that in when most. third efficient the getting possible. the way on that wells most on things ensuring the matter doing we’re that thing focusing that

onshore, significant Anadarko that too. the the Permian think made areas the we also made And I So, made progress called And progress. in they’ve out we Basin legacy where within tremendous DJ progress. has been

a have didn’t we side, Oxy downtime. the high On

downtime the Anadarko, have that more I say time have know upside, great a we don’t get every that, a I of teams worked job associated on with So, and been we’ve kind that but done has address mostly to the fooled that. I lot it. legacy

But, had scheduling significantly, is we uptime Our team for more areas the right in can on focused has time to we get the that over in we’re increased work. areas some out I the like electrical and responds. the and to think, the those the remaining ensure just It’s way. in hardening, done that we’ve system, where do done

be But, will I little bit probably there we’ve more. of seen think, the a that. So, bulk

Devin McDermott

detail deck, some recovery talk of And and in investments, could That able the for of it, remarks, capture was in the the second on my a now. Got to if able you’re been of Basin. little enhanced the this you business. leader planning cost time some Vicki. you’re it’s offset some you the question front in amount that guess some air sense. have given direct your well on detail even on through And Permian great. advance plant savings there’s Oxy within while low-carbon as need goals. this I over see slide And a oil types has the business, the a of profile building your And for to and more low-carbon think your bit return to the additional you within COX U.S. makes about wondering you’ve then that I good of see capital been downturn these that you spend; scalability strategy the of really industry there; this closing the And I importantly that on within is

Vicki Hollub

Thanks for Devin. question, the

have this. As you in mentioned, a leader been we

other reducing help as Permian thirdly, We’re by us and oil this And beyond too footprint, carbon shareholders our very partner it. atmosphere, for give because this lower in not committed only is our places that world to will the this by our lowering in about excited it us a opportunities be to otherwise helps of win-win-win. out it because we’re to help can we This cost of going and us able to own to this advance out. industries helps the others they the expand recovery COX those to do operations with their can’t to enhanced

infrastructure. the going an and that of for that’s invested infrastructure have the floor the done way And of Low the what and a deploy capture we partnership So, space. that sequestration ultimate carbon that is to to invest, XPointFive the engineering spend bring we’ve And of do in formed Nobody the we the formed minimizes it provided technology, between space in what far. actual to a Capital. Permian. And using floor size we large-scale we formed the We is, the the bring possible called that and have has Carbon we and table the thus bring air of for infrastructure required others to but we is project be dollars direct Ventures ensure company kind this we Rusheen subsidiary best way because to the XPointFive. what a opportunity that to we’ve Oxy COX,

this to So, to be be a develop and do delivers it’s it’s the and other extensive, investors Oxy, come to to a going helping key it at Rusheen for part and want in cost who of that and this. us returns

of it. the air the direct in about to Permian. beginning point currently But largest out I’ll excited use facility expect world. build we’re this anywhere in the very our we very, that’s that this, Permian, we’re capture we’ll beyond the go where So,

the and We expect River, the DJ go internationally. Powder to from Permian, ultimately

going XX from a business get could needs XX we us So, for years. we world it’s on expect is this, it, business. is And flow without of type more from next warming that over pushing a the that that something the or few could to cap of This there’s doing the business significant than no world what years, degrees. chemicals and or become, we earnings without in cash be others to believe, this that way X.X a the global X something the similar Oxy achieve

make So, unless it’s can it’s has business, happen. it profitable, you needs But, a not you something that to make it to to happen, can unless likely happen.

way have innovative to this with the And in the to us step just that cost passage us teams XXQ a improve in technology, happen profitable certainly, so big has was the past. be incentives, ultimately without been that of so over approached tax they’ve make our and efficiency, done way wind and operating So, it. like the for and able very lower and to this the will enable solar strategic this becomes a in time

it excited off. we So, about expect it to and take are

investment would And from us, XXXX the capital be minimal. of terms so Oxy for in

Operator

Wai Barclays. with comes Our next Jeanine Please ahead. go from question

Jeanine Wai

Jeanine Rob working is the capital, and My the call. everyone. morning, my question Thanks for Wai. is Good me is This Hi. first for on Permian. second having on on question

about So, trending of of during million the working capital through walk quarter. a in working And of Rob, how you some see on the draw pieces XQ? is capital $XXX there that? noticed Can meaningful we you that the front, us moving

Rob Peterson

the Number quarter. question. first the our of the cash for and is is working come Majority Thanks Jeanine. significant interest draw really the drove payments. in cash third interest There capital quarters. big of one payments combination pieces three Sure, the that due

a big it. piece of that was So,

was our acquisition-related processed. then, finally were was marketing piece sales Another in business. And the international timing payments crude that just of

towards we the year, to reduce of payments associated inventories So, the amount expect cash be the we as of fourth a do in significant quarter. certainly marketing we in the end interest will as the And have happen a forward, would QX. lower a we improve move QX. in capital working that associated we direction piece big in that the acquisition-related won’t change expect payments drove on Directionally,

Jeanine Wai

you. you flexibility the on follow-up prepared or Okay, very the to retaining environment, remarks, in nice to on great. getting That’s heading mentioned Thank head respond the my In the into second DJ My and activity year-end. helpful. Permian. question and you’re a start the Permian macro

So, how flatten I can you the QX? see and then production getting between Thank QX to just guess on throughout trajectory you as in things comment online, Permian XXXX? complete could Given completions lag the you. growth and early time out and return drilling as the

Vicki Hollub

our It’s at because really deliverability improve wells. from teams continuing point to hard to are the tell this

So, the on can got wells now, lot so. we frac get of And crews actually already We’ve it working when a with setting will us on. records some depend actually. we’re

tell up I’d a I as is too now early whether flat we in be higher levels. QX, think, us or it’s activity to currently, But, going better So, we’ll expected. little than right for say resume

Operator

Our will Cheng from come next question ahead. go with Please Scotiabank. Paul

Paul Cheng

oil the or oil the Vicki, what about -- is is that level, oil much different, $X.X CapEx curious look price market is is you And along guess, to use talking us Good In the the only that and what going is going a higher the sustaining CapEx you’re on of you. that importantly the maximum that cash. if ceiling other that accrue in your the really of and conditions. are say investment, fourth consideration? to the price words take bad? frame be based And the and like, other price that billion is is whether the the going Thank to that prices XXXX. if this much in it for morning. over to CapEx, actual is line, factor you that be to more just at, net going Can is in that there capital at minimum I year, your look than the only you How strip is into fact that budget? that Rob, going for lower capital million are or quarter is trend $XXX that that the

Vicki Hollub

we than what’s strip $X.X the Yes. Paul, prices is driving what question and at on with to would take more the view if oil we higher oil account than our even sustainability. capital, for a XXXX, capital sustaining prices prices. into expect. capital to We respect just your the And, maximum we are be look billion,

thought For very demand quarter some than time -- with by the -- so that be that. at higher would ago happening higher $XX. prices have we looking inventories like may talking because We a fundamentals that. example, world what’s while heard things that about the around were this than believe never or people by and I much and closely the and

basing and/or just about say cautious program strip prices. near-term very we’re on our So prices what might some about they believe

allow coming We’ll Board balance a the conservatively. flows in. us capital to XXXX into would cash recommend that go will we to So,

activity a can in we’ll discuss that’s the we things to we resulting one were we on way rigs efficient they And to Board. the way decrease safe, do And as of And we down. XXXX. almost us then that the bringing major we talking to way, that flex our they’re to important efficiency it our that’s and and achieved last and activity start billion way and about the minute of that we’ll having can -- you we’re we a was them foremost, process. be the teams a lower in be capital back work kind teams allow in to a the to rigs to we so, brought ensure to had And they lose our if certainly, up and than teams been. in planned efficiencies that as of it’s it’s that did this Board, in And have and activity. we’re if up, sustaining down, magnitude seeing have to They’ve back a it plan down. secondly, is be scenario increase ramp necessary, from the easier to saw of been, to But that, ramp now. where shutdown can cap. view if do and that in bringing going something ends gives way efficiency that. same they do to successful the on recommend unheard and to don’t as in have not, you If where then scenario as when if in a need that’s of And the the with safely; to always $X.X flexibility a our how the as they chance than activity credit and doing first try we flex flexing And industry just a line up they the

really we’ll is with But, the year we we’re reality in happy So, will $X.X activity, increased cap of spend XXXX. really, we within budget with X.X reach that this this X.X see then to and billion the can our that. if

Paul Cheng

Some the think best the can that your I to competitors asset? gas Is is to that or follow-up still will Vicki, from that? the the that your CapEx on well of Permian of is shift something gas consider, just have you that because oil. outlook, decided natural that you more

Vicki Hollub

gas us point. oil best and to in don’t gas the new East any Well, -- and Permian need is investments in have And Al the important in investment but this point those very investment other we the We wouldn’t world. our intention still value, do are gas our assets much we pure make U.S. build our any assets we to that asset Dolphin Hosn nothing there to and build at that around is this and Middle at -- do

So oil. go certainly, dollars will our investment to

Rob Peterson

capital just close question. your accrual out to on Paul, And

in slightly quarter, accrual which your in can think on, third question capital the actually is I so, in intuition you and Your spot the see is positive.

levels accrual reverse the of activity when the pick itself As it up, capital will sharply activity coming we from out first quarter. reduced what did

is intuition your So, that. correct on

Operator

come with America. question next Doug Leggate Bank Our of Please will go ahead. from

Doug Leggate

It’s morning, -- a Vicki. to guess, I Thanks. question. follow-up good Paul’s

you is And just my or guess for I a viable issue the a lot coming it is get the at in want industry by most of because year-over-year confidence what capital-efficient a spent. it’s significant that production, million leave you with $XXX your your of still can portfolio confidence is it’s market issue, of obviously understanding facing $X.X margin. some about midpoint some that. So, that there’s capital level when as to is, does is momentum how decline. that in But, fact the to the and timing the some a in just -- give very level being questions billion QX, capital you feedback you’re your in

Vicki Hollub

well efficiencies that high teams are that achieving have side also efficiency we’ll and our capital looking because We the the deliverability. that at confidence on we’re the achieve

point, at confidence So, this we with do billion. high we’ll sustaining production our that $X.X have the meet

Doug Leggate

from some clarification, the of just in downtime Mexico So, got you’ve Gulf for QX.

So, with that along is goes that? oil what the number sustaining

Vicki Hollub

that taken average volume So, XXXX. try going the the downtime We’ve number account maintenance. is production for the we QX to we that into to into be for sustain

Doug Leggate

Right.

So, what that number? is

Vicki Hollub

that Are we guiding to number?

Rob Peterson

No.

Vicki Hollub

No.

Doug Leggate

sustaining used and together, you price what it the is in And, do me there. to I’ll one $XX for leave so Last It’s synergies Thanks. be with What think a worth billion, then. oil dividend. It $X.X breakeven Okay. your on sustaining price? you $X.X all oil capital? today the net breakeven billion When is a capital try.

Vicki Hollub

Today, But, a well below $XX. looking below breakeven our we’re or at about our you’re talk if the on capital, is sustaining. because in sustaining is in our -- $XX level below breakeven basis, of $XX well of which current you well below it’s it quarterly capital. CapEx, When

would into before of high-XXs of payment terms the expect going the breakeven we to XXXX, in price in preferred. the So, be

Operator

from will Our question Singer... Brian next come

Vicki Hollub

again And thing him should told on know talk a those our are depends I other Doug, is chance when Thursday, you The I’ll get I just also I would yes. to breakevens talking we’re before assumptions up that critical have for -- be hold second? -- that to to a could I but Brian, your about considered can. And will and Oxy be. what midstream on say

Brian? Okay.

Operator

Goldman Brian Please ahead. from Singer go come with next will Sachs. Our question

Brian Singer

Is be down, to that fourth this and keep be coming fully your flat? that on production capital? production capital, follow $X.X you life that ‘XX do as would will you, or Thank you reserve see would replacement billion. even reserves, do up morning. solely the that to expect production capital a good a the XXXX flat maintenance your or wanted levels, replace quarter i.e., sustainable I XXX%, further maintenance at as And, maintenance stays

Vicki Hollub

is capital, the in sustaining build developing. XXXX XXXX. that we’re and at to efficiencies look the deliverability there. this get have the The program We’ll XXXX that But, of XXXX a capital dependent for sustaining when we will be we on

more midpoint that And starting in XXXX. look so, of at we’ll

to then, the for So, more to for record-setting more we to get that we -- a really is delivering Anadarko incredible program. now as there you area something record Basin. and it we’ll of for learn it broke example, And exciting the results bit but a is an the record was What’s about able be well on the assets, the us. both, Silvertip Oxy’s little Permian the XXXX closer happening what’s creates uncertainty provide

And so, now that is our record.

forward. deliverability, at continue just we our well And sustaining capital it so, to means going we’ll what as look improve have for to

Brian Singer

follow-up Great, thanks. And regards ventures. a carbon then, my to about with new three-part the question is

business first The you a is makes potential call think business to the less compared I greater earlier petrochemical sale. whether and strategic in now. wondered that delivering is, the I asset petrochemical the candidate or contribution what And for the

sense further incentives, here start that reduction, looking like you when in think mentioned you XXXX is of the that direct extent investing goal? And cost what be you that you’re one the others? Is to which the the You and makes considering a of capture. main in timing plant for that’s a technology key that can absence government the planning air that returns-enhancing or the deploy, were are scale to then,

Vicki Hollub

air of makes about Because the things the it the direct of development two are of which would uses this And uses comment OxyChem one, Okay. we make. what I’ll do the wouldn’t begin fact, because OxyChem with that, to PVC, OxyChem. replace trying facility It the of really in lot a with provides one -- associated want is OxyChem. or Oxy synergistic business to products something we’re that the capture. low-carbon in this would not with employees about OxyChem very OxyChem the ventures. is some make No, to direct our divest capture share

process, Second in and used chemical thing is we���re direct capture that’s potassium that the… a hydroxide is the air

Rob Peterson

in Largest the country.

Vicki Hollub

country. the in Largest

Rob Peterson

world. the largest Second in

Vicki Hollub

the Second with potassium largest in to world respect hydroxide.

a And on lot on capitalize future of to there for and So, believe that. we more into will OxyChem we’ve synergies. there us want We this. even is be known this the with synergies all along,

So, important. that’s

question. there -- and so second was a was question second third The

to question lowering with respect third even The costs further. was

is safety it the build money we’re subsidies? was to the the work the we gas how billion XX% at And Bcf that major teams combining a plant. feasible, we’re largest we’ve now, now they any capacity OxyChem second partnered the running And $XX investment, We the to glitches from Oxy with make they’ve to our that’s oh, with where the came that We And projects say build The -- a a expanded it seeing I’m question the That desert it have here I’ll put of We to at -- a impressive. no the a of capacity without day. team. on-site people with to gas this in Ken to people the can And and build by city million X XX,XXX on that on whatsoever. capacity, -- firstly X that to incredibly house expanded incidents. construction. be built to plant. had had of about peak only third oil glitches, of is in sour plant the processing was facility. remember team people ultra where and what get can the now, ADNOC technologies middle world without government them are quickly strength point no

capture it they expertise with continue but plant And who the that will direct we facility and air of the be XX% I well I with the will this ultra that and combine sour at curve -- along engineering. we expertise I what expanding the from And something plant wind. to we’ve Ken, don’t that And largest solar in optimize. guarantee the and world, first for very exactly process carbon yet first plant add? by pace very, that OxyChem you gas than expect the it, cost, faster skill, so, to again, in while that that. will experts seen the innovation what are So, our combined have would do improvement understand and plant, of know think,

Ken Dillon

terms of together, these bolted in we four Yes. One technologies world of chemical. observation DACs existing consist is, where the are are leaders -- the

opportunities In simply in value and terms opportunities and far. densification, densification, work see already the process massive and on teams so of scale-up the we the process based the engineering done have

remember one of not only up required So, the get that can go results we them. optimistic is, anywhere. But, are opportunities process these can incredibly thing also. densification and beauties but that’s And scale of we the one to

Rob Peterson

I that value is infrastructure. that the of and compression molecule not think imagine, portability COX inexpensive is transportation you of the DAC the can as

emission a way neutral, I think, through fossil it has capture is portfolio firmly COX this molecule. or We of So, X.X the fuel carbon simply footprint to is, infrastructure the in approach underlying the now energy keep long be make even And goal commercially this viable that the I role also fossil it reality. negative goal, of the can’t to capturing to term to believe order long achieve portfolio and of low, those a you the reduction. generate it carbon is because air. fossil believe through the degree usage reservoir them think, still collect fuel we of done and And and a believe Oxy’s that to will move And from sequestration take fuels, to have part what the done term. differentiates will it, be be can the why it world we a in

Vicki Hollub

at you look alternatives, to that’s Rob, Europeans the are renewables. what what from others if footprint, into they the carbon into intensity, And getting Exactly. carbon because are doing differentiates us their lower

to huge to than believe And Rob’s And used. going XX sequestered fact, to you new a per what’s approach COX be there’s from what is globally, model are be this using needed, if go, learn it’s the business. needed now, and contrarian a is and about recovery much what’s metric to IEA COX only core way be tons in at right oil of X.X we needed to point metric why And is tons. anywhere metric tons so, industry that we billion is XX.X a look of the that or going competence doing to to in rather expertise forward going enhanced trying how go world that about going our year says in that’s best million the billion

is that’s to times needed future. the that’s in So, than today doing what XXX going be be to to -- more going we’re up

warming model a And X able business capture not going for carbon the at important. calling to only this carbon I IEA us have that model X.X that to degrees. -- fact, is didn’t required. that’s say significant so, seen going incredibly global make be to to sequestration not be of The one this Almost cap capture in to was that’s and level for

this much at planet about it smaller when trees, the It’s look the is smaller. same earth. as footprint too requires much thing equipment thing it but that on other -- The The it, it’s you a carbon capture same the thing. does does

So, love need and important. trees is carbon while capture trees, we I

ago, previously about is I think is that And a that can when And captured capture Permian kind industrial facilities to put that’s of we getting in this the up -- was years huge first our on put thought Rob’s started we site was XX to sites. this have us thinking point from we anywhere. challenge. first COX holding industrial we’d carbon the what the

of out that. do figure pipeline to or build do going do how we to how that. we so, were And we’re we do some trying And the

their other happen somewhere emissions, hubs either and that Gulf COX direct industries air a put need on or facilities. along to Coast of the of because lot they where there the Some or will capture capture there’s

technologies carbon we about, an Wide thinking on we are So, plant. to other what Energy to already with signed ethanol agreement with capture had respect an

air because So, help you put Gulf the balance the them. over that Coast if thing it’s But, capture that’s emissions in the Permian, world going still generally, to be out will direct one to help doing the time. the we in around emissions

initial done in it we it put put can Algeria. with So, the the it as in Abu DJ Oman; put it when the said, we the Rob Powder, in put can can we we we’re can Permian, Dhabi; and installations in

it can we we do and/or So anywhere at partners’ are, facilities.

Rob Peterson

address caught Hey we Brian, we sure think that answer there. I part we and I of the last your make it question. just don’t to want

Brian Singer

that. know don’t I me? hear Can you still

Rob Peterson

Yes.

Brian Singer

Okay, great.

or beyond capture. I some think other considering putting were that pursuing COX you other you you just direct technologies like whether ethanol said air when in you opportunities It mentioned ethanol. was were

Rob Peterson

obviously in Energy We the which have Yes. Wide project, Texas. capture ethanol is an

the into the capture facilities. emissions COX We’re that from we’ll we’ll doing And Energy’s use from take Permian the already those Wide EOR. ethanol for in

Operator

Our next ahead. question will Morgan. JP go Please come from with Gresh Phil

Phil Gresh

Good morning. Hi. Yes.

out then additional you point mentioned Vicki, would the looking in about, your flow time. you to? billion $X major beyond fourth ultimately that probably we in that something presume you will want question, do where And once broadly, relative and more you should XXXX. achieve think with the the like you be to just talking had chemicals be I table quarter early you’re having cash where First that $X XXXX, at off the this in billion generate expect sales leverage asset to it asset guess, to sales to not those to get

Vicki Hollub

XXXX. XXXX the with than reduction. cash will reduction flow have intend do facilities; it at happening QX divestitures getting into is said XXXX, healthier base we’ve least, what than priority our from to well with We and to off to the to more and to see our we’ll year, start I now that’s meet of second pay take that where -- -- be. to flow we’ll where and ensure cash much early get going it’s we’ll on will using prices in same, our it’s to that focus advance early balance where maturities where maturity maintain is we to flow more us first that’s at our where think, down. for And maturities debt time. have are is cash at where can. I time, respect next believe remain priorities leverage respect be just still we the cash need prices our to and to But, flow our our is And that -- to that to

will for reduction debt good second the the while now, priority So, a be I think.

Phil Gresh

sustaining breakeven Okay. question, glue maybe WTI was CapEx. And together quick. high-XXs just your clarification to real second two a then, on I’ll One cover

there? that both quarter and to midstream about be would actual your comment using assume my of And businesses for and production Is or you the just you Permian Thanks. that oil mix Was rate provide quarter to play it how gassier could you’re general? those the a driver question chemicals. that as bit then, lower the assumption in fourth to made So, You mix in of anything in as out? the DJ. second here, expect perhaps fair a run there

Vicki Hollub

this oil that continuing due fact we weren’t gas the decline that ratio more -- expect the the is partly development the I’d with adding slight in gas increase increase new program This would production. be stable. to --

what During this be. much than time, our wedge it so production lower would was normally

business the ongoing haven’t we With going year, to don’t assumption guided about is will the OxyChem be, next for we be to respect Midstream that look issue an situation. on to that. and of the us. optimistic depending But, to going this So, what chemicals we’re COVID is how expect

timing is this. don’t be. business And, that now. right that will back to anything be going believe we to not is happens, when know what We that going do we’re guiding there do progress well so, pretty the But, chemicals we And made. believe just from the

Operator

Read Fargo. will Roger from Wells ahead. next Our question with come Please go

Roger Read

Good top I far the I thinking And And specifically good taking out, start extending maturities on of XX. question a we at on look to debt the wall of and the smaller of and face done of in ‘XX in the of terms there you I simply page attacking left about of you on follow-up as Phil’s maturities billion opportunities expect that’s Hello. that extend not so just kind on morning. so ‘XX? you’ve ‘XX dates some guess, curious, forth. was there $X debt job should a there, to Yes. to deleveraging in chart and some the maturities wanted the

Rob Peterson

between think, And attacking of the we’ll Yes. divestitures timing good very balance absolutely, those. debt a and to question. take towards Roger, the proceeds from of approach continue and sheet thoughtful management I

surprising in $X And we with start so, us again to similar those quarter certainly a the billion market moving it at third did. and be way the the for point some that wouldn’t in that out raises did access in we

so, opportunistic We’re very trying to our and done those to value we’ve to that that now be us for about for a approach for And, when the Company so where thoughtful to so at that have best job runway can we the as then best value we the get a occur. -- we’re that the and market looking for leeway, they do frame. a we continuing position to divestitures that sure access Company make not the divestitures. And do also, it’s can good to divestitures, time the give as specific continue in we get under we’ll

the So, ‘XX address until absolutely, waiting to maturities. we’ll be the not last moment

Roger Read

I administration, just in in curious, that. drilling visibility wells not in for ‘XX relative holdings you in what’s permit your I like permits change anyone Okay. I how of as availability? I potential drilling and ‘XX know appreciate your say exploration at was out there, question, I a look that’s since hand, to think think is. largest But exposure, you’re federal Follow-up Mexico, don’t mode hardly the Gulf

Vicki Hollub

first happening with the or respect to Roger, we environment all, is So, going and there’s priority President of happen the to for will it’s other don’t soon-to-be things plans. are that what’s believe what our belief be highest urgent administration regulatory around as they much on. to of the executing more going their Biden, take take over President, that to start be I -- think that

expect EPA and any to start Gulf we So, working BLM, believe Mexico his or the onshore. this them. impact anything staff. great don’t near-term relationships the we’ve have gives with we and on stayed And, of engaged us with with permitting always either I We -- time don’t

a environment. need more do that we solution to I do And the happening, permits we us so, collaborative, this want the what opportunity permitting to the part a needs are, what be is I know safety know want constituency. want for focus going what’s of are. to is and what’s to going an what’s to to what deeper And to we on going to on be And the meet they’re the of to they’re of impact always want and I where regulations; think, is, they’re happening the like their is

this I some to been has hate really developed as people. I names, They’ve and here, a that around use a of some And both think, look in has we’ve great that’s we’ll very but the of the competence had BLM persistence and we’re patience thing. is our through U.S. the get worked of very, required the operated challenging know gone areas reasonable back, point that but Company I’ll countries as where collaboration, same wherever core if helpful our mention help developments, for to operating. you we that the because of hold very both onshore country offshore lot Company the to We lots we’ve it, so in world, previously

And we of the we be the that address competency so, just know people in the way there. aggressive change. it. And We’ll of it won’t part

Rob Peterson

in as we’re company administrations different add in different even the And I holding a from -- relationships federal with built the with also would pure in to over what shape, addition too, XXX very that of a history approach. good we’ve a that on the years is, I is think, working standpoint,

APC Mexico. we are onshore, within million stuff have land, that to the have on have the largest -- and X.X is federal respect acres With We’re Delaware the none leaseholder the Gulf federal of onshore of the is that which Gulf in in since in And Powder biggest exposures have purchased; case the already New permits we hundred a Basin, permits very XXX well the we of the that have works. where and hand in of we little in lands River onshore couple in over the activity. from on Mexico,

significant so, have drilling we in inventory already. New Mexico And a

Ken Dillon

carried that operational permits, seeking you One record. GoM installation million $XX times. having want We’ve remanning have XX%. earlier, the managed in year, by government to thing out excellence any you’re demanning COVID And the in and results really teams with uptime while like is one country platforms about in the safety year, the lead and improved have helps I’d of managing work multiple process it. to Vicki so should And And like our to nothing add active on spent improve world. again, cash discussions to almost the worth when flow domestically, most storm season this to in exceptional engineers really operations said do next

top-class which win-wins significantly to rates, I’d have helped reduce for teams, us alliances, achievement. thing the contractors which So, are the forward. is a like And using spread really supply to and last mention we chain the think going

Operator

will time. back remarks. our the to question-and-answer for the interest any This conclude conference over session, of in to Vicki closing I would like Hollub turn

Vicki Hollub

appreciate all great a thanks call it. have to to want today. of joining And our say I you for We just day.

Operator

you The now attending today’s concluded. for conference Thank has presentation.

disconnect. now may You