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OXY Occidental Petroleum

Participants
Jeff Alvarez VP, IR
Vicki Hollub President and CEO
Rob Peterson SVP and CFO
Doug Leggate Bank of America
Brian Singer Goldman Sachs
Paul Cheng Scotiabank
Dan Boyd Mizuho Securities
Jeanine Wai Barclays
Raphaël DuBois Societe Generale
Phil Gresh JP Morgan
Call transcript
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Operator

Good morning, and welcome to the Occidental’s Fourth 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 Jeff Alvarez, Vice President of Investor Relations. ahead. go Please

Jeff Alvarez

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

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

Vicki Hollub

and a Jeff, industry volatility you, and good of our Thank morning, everyone. was for year XXXX the world. extreme

the ahead. on well our as and operating our our our quarter our technical divestiture results activity provide entered We quarter of maintains well in navigate teams and the with Throughout details employees With base on plan XXXX, of of started overhead the challenges integrity year storm particularly of key year to XXXX deleveraging an balance The of modest capital as lowering reviewing challenges capability consistently guidance proud our full maintaining support presented as XXXX our we’ll plan. and provide activity us, by position mitigate and of asset improved the the I’m our steps returned our ability relentlessly as to XXXX. This at with as costs. the results focused This morning, the we to our necessary last operations an last production level asset was the our as by the behind taking well progress our also while intensity, fourth fourth in protect update a the the normalized costs. year remarkable week. We’ll we increase winter deliver our financial rate. to XXXX decline expertise stabilizing now to financial production of have even year sheet. lowering derisk our safely full base for outstanding leveraged best-in-class to and who production year

have achievements operational the us for In this as our to our momentum our production year. businesses gains to and stabilize we quarter. the while to of continuing lower-than-expected track excellence outperform XXXX. for efficiency and record exceeded in fourth positioned start operating to on a Our quarter, build costs We production guidance continued deliver strong generate

costs continued of domestic oil operating original gas to our operating $X.XX per BOE measures the year. impact our below as domestic of Our and demonstrate BOE significantly costs cost were the and of for reduction operating lasting our $X.XX expectations per cost

the and the normalized as our quarter. third in Although a activity second in activity teams quarters, miss we step not did slowed our fourth

completion records. XX from deliver the onshore and outperform quarter Our second to drilling in rigs the of drilling Operationally, in to down end with the XX assets and went and new our returning improvements by domestic the first zero rigs continue efficiency expectations quarter, running we year. to then

respectively. efficiency billion of. proud XXXX We our $X.X and COVID. demonstrated No XXXX. teams minimize exceeding transitioned cost achievement Texas improved for quarter, or original Delaware of closed Our consistent performance records we approximately position, teams We we fourth we’re matter as achieved strengthen ever our simultaneously reducing our $XXX we and from DJ to in the balance sheet sales, liabilities the worked billion closed drive targets into quarter. by million, off risk having favorable Basin which which our the In financial debt how the by our operate, set very Company-wide for billion an synergy well of an proceeds take the or $X.X Many in while challenging our was tied divestiture last environment in with utilized best XXXX, year, to our of never divestiture target our safety asset eye safety. we and new by $X.X approximately

a debt and will base. place progress our cost majority of operating maturities. our reducing maximizing of into ahead, our our last program, ongoing focus synergies value in costs unmatched operations. We so we refinancing these embedded extending made are while and The a as These place. debt approximately year successful in position $X completed continue us remain year additional in we in savings delivered the reducing asset also the on the billion XXXX achievements savings business now for we vast the can strong Together, of improving

We billion, forward. synergies and represents which our a seek we cost of full new expect to all and as deliver lower reductions. of to portion costs expand We’ll move retention overhead opportunities significant continuously margins of additional $X.X

$X.X spend billion quarter at to capital sustain rate. of production expect We to our fourth our in XXXX production

prepared support that and on If are flex based growth. The year, spending if base provide increase our prices this production in WTI environment, of often and oil improve price are to to and asset underappreciated. $XX flexibility will are not continue capital a Our plans necessary. we scale we lower, optionality

Leveraging being and wells, flat of coupled barrel spending every environment. existing hold us $X.X future relentless positioned adapt equipped degree the drill of to spending continue our The a in lower leverage deliver our Likewise, sustain production. plans base of allowing uplift. commodity future flexibility, even our enables and the not with pursue level retain changes capital of capital billion new we high we in XXXX. development, to where our a capital with to in growing costs the us to best-in-class of are We our adjust characterization, price ability less our pursuit to capital goal with decline are our ways required while to from low spending allows particularly maximizing XXXX changing dips to more to macro produce or price production to of to wells capital demonstrates to period a production barrels. intensity potential regulatory The subsurface benefits us our best of our in to while technical expertise, efficiency

by with the progress closing in the billion market reducing pleased surface asset We acreage in with of Wyoming, as of Colombia. well our and to challenging Colorado divestitures mineral targeting especially and our Colombia, and divestiture in Utah $X be in XXXX. billion the are assets target the given to additional onshore are we closing as $X $X achieved date billion Post announced exceeded mid-XXXX. sales to We debt, an

towards have and this target are closed million approximately progress We already $XXX new of making transactions.

to divestiture realization. price will value our timing continue transactions of not with program, quickly. we balance scale transaction end the near we As We’ll sacrifice close large to

to assets accordingly. prices strengthen, commodity continue that to As expect buyers place the value we adjust on

always will a our for over prioritize target, which We ourselves. meeting or deadline value upon shareholders we’ve obtaining divestiture imposed

in asset reduction in ability will efforts, decline our to combined a we low billion speak and refinance you our review a and We have occasion, on value we of ensure We the opportunities We mix history, that acquisition. moment, the with this portfolios Rob pursue continuously our stopped core complete base. mean favorable optimal over have but to bolt-on our may up in where of capital have frequently efficiency trades $X places to cash flow assets. improve XXX-year acreage to free one see now generation, maturities looking year, a position. in we us and portfolio near-term debt Oxy’s operatorship, outstanding to opportunities for As last best doesn’t of the positions

Lucius in exercised right of increase the recently project, which interest our working to we example, in the Gulf preferential a we operate For Mexico.

in back environment. over investment We a pay oil expect that a our $XX year in slightly will price

completion oil during delivered a we the few the many continue Gulf period spud and of Mexico quarter. improve and times. to This our days. record operations, by drilling includes Even lowering time three slide just includes Our of to production of highlights increasing their first gas our fourth who by to uptime achievements business market previous reduce in beat a activity, and

Texas X Additionally, where conducting almost envelope onshore to Delaware driving of adjacent well continue schedule. have pleased on we onshore and a been year been is cost are exploration original our Abu Basin, work. the X DJ and which capital to the new Block in concession synergies one And Block out we’ve push to savings awarded Dhabi, for cost ahead we’ll in achieved

still Following We cash and exploration our the complete, but Block sheet. the base, award Block prioritizes results appraisal year, of which low-cost flow, production to balance work for in strengthening have X, debt excess we X. more a to Last multi-reservoir revised maintaining we made encouraged framework highly discovery by reducing communicated a our date. and are

least do cash flow not anticipate growing priorities year. as unchanged production this we remain for at Our

return capital you our our results I’ll a the to for continue year first the way to Our quarter call support the with meaningful of who strengthened hand through sheet, debt, reducing guidance common immediate and full balance walk the and will ahead. is and Rob, to more shareholders. now over financial goal in

Rob Peterson

In fourth The per primarily and share. during loss sales $XXX quarter. share adjusted reported value per difference is of to to you, $X.XX -- due adjusted related approximate the a Thank of million loss our and an assets the of $X.XX we announced on quarter, Vicki. an loss reported carrying diluted per share the between divested results

We XXXX in Colombia. In and considering more This maturities billion outstanding XXXX, of debt reducing than the our million maturity. [ph] billion mentioned, over last refinancing financial today. $X.X billion relevant maturities especially over position of billion divestitures than XX XXXX by additional we that lowered to near-term million to $XXX we repaid months, $X $X an the targeting us of $X billion. our significantly is maturities we principal approximately year $X.X repaid post $XX improved maturity. financial our XXXX XXXX, are XXXX we of Vicki derisked less $XXX with profile. to remaining have And contributed extended of billion to leaves achievements As billion have almost of $X or last billion of debt and This $X

in balance focus environment, the remains cycle. level reduction While we throughout able a our sheet provide the to were and debt on debt manage stability adequately mid-cycle this to of strengthen

As capital the from we quarter, to of XXXX. fourth third support increased quarter levels spending activity ahead guided normalized our

strong and margins. levels activity million $XXX increased cash, unrestricted as still free businesses and flow with the our cash $X performance Even dividend quarter by XXXX driven of paying on and fourth our approximately deferred We we of we on generated returned billion improving of focus entered in cash operational hand. the to

call. our pleased earnings since price with progress are our our in increasing share last We

trade Our to OXY strike exercise shares shares the warrant have those for right the shares traded last issued not of obligation strike but gain price the And the $XX. the purchase holders above price, and we warrant year. above $XX warrants the warrant

XXst, in As about approximately of new January shares. been have resulting exercised, XX,XXX XX,XXX listed warrants

the allocate reduction. proceeds cash we exercised, resulting As to are additional warrants debt

beginning are fourth added the the We to quarter. in benefit activity

quarter fourth often sequentially impact be of lag and activity As compared in production our first expect in at to a production expected is activity first production, slightly of the -- we change recent on lag when between and Hosn The our decline the the as operations in and to turnaround lower the adding as our there’s Al on quarter the activity Dolphin. resulting timing to impact XXXX well due XXXX. storm quarter

Our event a per in XX,XXX due week. weather guidance Texas first quarter production last to impact includes day BOE unprecedented

on Although impact the our quickly. be a recovered operations Permian our expect to impact the we as storm meaningful temporary had production,

full able barrels full our to to excluding storm fourth were recover production to equivalent be guidance, lost winter we Colombia. year the While during anticipate our the will year we essentially our ability rate, determine quarter will reach precisely ultimate if

reporting Permian Going into forward, have it and results. Permian relates as entity we Resources providing EOR to and guidance single combined

operations integrate we oil low-carbon Permian further sharing gas, of opportunities and increased strategy we anticipate As resources. our and in in

by are Mexico [ph] Gulf provide get variances also asset. to seasonal We clarity we separately on this as production the guiding of additional encountered

On commodity influence items Our as lowering end to influence, the we during When we lower decreased disclose are lower would forecasted we at increase through items higher less operational basis, during forecast the had per XXXX. and growing expect margin issue we improving a price certain cash than improvement be due as level DD&A in and have we non-cap completion rise significantly over year. expenses. that continues reserve We XXXX barrel this the rates environment reserve will lower of we to noncash focus such expenses an can position, there and our our activity year. XX-K, recognize reflecting

as capital asset plan we provides the it provided understand investment. XXXX and environment slide first and take into account today. and The full production Our guidance details for regulatory quarter capital year by the we

flexibility us regulatory will adjust to guidance our provides the occurs, activity significant to environment the an provide as to asset a high-quality may change. as and environment update we Our base capital change allocation If warranted.

remain in year, rigs X expected in our in the last the last to drillship Rockies. Mexico, full in the X to Basin our the combined capital embedded Texas, includes return The Occidental X financial running X for For years in Midland is New improvements Delaware, a in Gulf Mexico plan and ahead. the of active throughout year with The stronger position late capital XXXX. the placed year, have much made plan, flexibility and

still call position. we have performance our improving continue will our over back while the strengthen to turn to runway sheet, work now have assets While optimizing to Vicki. to do necessary of financial the now we the balance I our

Vicki Hollub

engaged industry, methane the have and carbon of our …to actions being the part and have important recent become we regulatory cost increasingly active social for in been of solution. the that and

a Occidental our play limiting emissions our removing low-carbon and enables leading the businesses amplifying Our from shareholders. methane COX role atmosphere in while benefiting strategy existing to and

our expect emissions improve other recovery intensity We the to oil we regions of and carbon own reduce in and of products. the as the in profitability Permian enhanced

to As to under regulators we commitment we with continue cohesively safety strategy, the new demonstrating while our working low-carbon environment. administration and expect the implement our

We our and XXX in approved New XXX many of continue any experienced In Basin on our Mexico, have operations. pending. the than not operations land more impact to Gulf more permits Mexico to approximately in have River and Powder we the with expect federal

zero, we use call, report of emissions reaching by climate operations XXXX, earnings our zero with our XXXX accomplish and our be to an ambition our an detailing our net own last by ambition products including of XXXX released target Following by from the XXXX. this to

As to an which and part a we have well, can alternative Those of lower other industries means industries partners not solution as airlines provide for their and utilities. our low-carbon may significantly footprint. is carbon strategy,

portfolio of the best-in-class, and ready our before, to said opportunity lens before with can challenge. incredible through a immense, being for us of in call tandem is to plan our emissions executing I’ve Thanks operator the As world. the exceptional with in employees, we reducing now greenhouse we low-carbon assets the goal are low-cost an your strategy for gas a and a lead our We’ll of questions. open

Operator

go ahead. Leggate [Operator of Bank Instructions] America. The from comes of first Doug question Please

Doug Leggate

for Maybe, Thank taking appreciate everybody. I first on you. midstream. you. Vicki, actually Good It’s you afternoon, questions. my one is

couple some I quite I months, of stands blend for today. that through of can think, the last And talked us got you midstream where of you a your the of wonder about Rob. possibility kind potential over maybe a not and I’ve follow-up tariff. if but renegotiation extend, walk a

Vicki Hollub

standpoint. a add going us this partners, across Rob I’m alternatives had we that We’ve come we let have to start to some was at and Yes. value this. not options. a other to acceptable potential and conversations and out, then have from solution companies with looked But, and

to to to to deal but brought value do options us a future. negatively continuing that the still in us, that’s willing not to we’re consider going sacrifice We’re being impact are

still it that. around there could the what we’re on be that time, is today, we have strategy be believe ways that not the us place could to So, in for now. execute just to we working We option over but able adjust

Rob Peterson

we’ve as to actually indicated Doug, to to value point, Yes. super in finding those a Vicki’s a simply way off [Technical before. I roll Vicki. XXXX, Difficulty] would that, economic contracts second And find

Doug Leggate

echo voice from Your in drifting somewhere. is the

this looks me you further follow-up the sheet out realized know the lineup you balance I But the on I to else in side that, you’ve that on is for to it someone target, guess, anyway, don’t and here. My pushed disposal, anyway the Vicki. and maturities tapped that. talk I even for disposal continue So, thank if is the about year. disposals

towards realize to laid range oil And of billion I $XX I bottom you if wonder that your end environment, can So, while through year confidence you would that wonder so in confidence. billion that behind the I you a what to ago? that target, of in walk or level you achieving $XX end and higher the still that if lies Thanks. original of target a price gets out just your us upper look

Vicki Hollub

the and us Well, thing proposition. script, important stated options, my the we I for as can And for in have various value you, most things. I consider we is as tell incoming offers

could the we’re So, proposition what coming if in. we weighing achieve achieve to billion simply that. wanted divestiture target, the $X we is that offers billion $X value of But the to are

making say going for have some we to fact to on. that committed value that will because But, so, there whatever get very execute I confidence best we’re we And the of sure have get we we’ll that stay multiple that opportunities. the I

one divestitures. We’re not on depending two possible or just

our large, portfolio, in have so We so diverse.

to options choose from. multiple have We

the again, that the offers place it’s So, likely lower more believe to of we to and we get target And in the that the depends of have how quickly now, the upper processes need right I really end to And on things where then -- the do would some couple we timing end. we could be. lower can get end, on them hold. but a we

So, target, make number. our And price, us the that. of oil value the can to we is want it’s we there, about to execution we believe getting all and get $X for to regardless to if and the that value billion still divestitures do

Operator

ahead. of from Brian Please comes Singer question Goldman next go The Sachs.

Brian Singer

Low is parter. oil recovery, My might couple to it and Carbon tie-in regards the the be enhance a with first to the question Ventures and

and the remind EOR and us to net a and decarbonization how First your oil arguably capital is, and to factors of and you your I into your petrochemicals a could recovery. international that enhanced with to budget regards goals. U.S. slide and And goals, second bench. to meet from your Can pathway much in side, that about talk opportunities low-carbon investments XXXX? of XX, more need, on zero you onshore on then, ability if in your focuses upstream largely expand see is aid need ability And part very you wondered with production think maybe about the the talk I

Vicki Hollub

not the our Well, anchors say, in of they’re Permian way Low projects our the one we’re oil the Carbon I our not Permian, recovery doing the COX for in to enhanced association believe do proposition strategy. way would we in Ventures but are a that have the -- we and enhanced recovery it for -- it we with oil shareholders. best our projects strategy do necessity our value that that’s is best it’s the

what And vision. original place. on before that enhanced tax initially. the in where reason a the you I well point you and credit We time production we our it our shows I to up, we focus that’s ago. vision COX And you established. the about to talk as timeline So the line was oil see credit the were it started vision years was was helping just XXQ if this part recovery They XXXX, part that this was government -- -- the tax XXQ brought get started how group more point we XX on could to cycle, the in the were Permian. originally started idea approved put projects than of where a We

had conventional reservoirs was then, oil at back already that conducive looking resources to that in we And were what so, COX vast maximize enhanced to we how recovery. started the

a and no process to up wanted with that supply way up long why we do cost, is, lower term, came back to COX COX, What we the that’s the a option. anthropogenic started of wanted to have with decline we come So, then.

see when is XXXX, COX Century in XXXX. capturing So, our Century delivering in one in came of on, approved see, it’s COX, And projects. and plant our Denver The COX it’s -- got can largest unit it the Texas. you Denver Denver MRV unit units to you our West plan, we

It’s We are massive. even today. reserves to continuing to it add

the note that so, XXXX, it’s company by COX It’s the of ensures we addition And have reservoir. the capture that were a two monitoring, in Hobbs permits the plan in means and put that And that when the issued properly sequestered reporting MRV in MRV first plan and COX the important it. it for the the you you ever and you EPA on to got to sequestration the got -- that that put just ground, verification. is, we

to turned that helping test our be ability in to create technology, reduces It’s others air capture of operational but to more to helps you business. our add first And the now make getting reservoirs in more the advantage -- current the time, try two us got vast, for be whole X question, -- as process, and so a to the holdings left ability that. provide that and but we in we we leaders that started as have Permian billion And And conventional of didn’t we do for place, the it expand extend business take in turned vision was new cost world. to And way to this it will So, and the over what have beyond lots put direct an It’s and barrels the into world. to commercial, that. technology, we’ll more talk an EOR the improve into those. only business, that that know resources develop expand value of than our Permian. to is not a resources to done, the as ask even emissions I know, develop you additional about started for opportunity shareholders in our rest will the it new in I in than of want will structure a of it ability

the another to look expanded that part carbon In you it And recovery us oil that XXXX, a of commercial, capture thing air are it was doing. so, and this at Congress, And enhanced the first us was XXQ when to by and does that enabled things our -- Permian, we some what when to what in approved industry was direct capture for of moving have beyond the expanded. we’re make when from commercial. was critical

a that is of that White in project. And foundation have important see And as Initiative. We to that pull really finish read will of the Climate has other our we the that and so some been other all plant Power won’t Energy XXXX. we in from things where in discussions air air oil is emissions, and do Carbon those, place capture today. lot a we around that’s that step. group. And COX Oil then invested the reservoirs. Engineering. is Ventures the Goldsmith has through We benefits a have NET things Power in we sequester some NET So, the oil to world. Engineering technology was our been We a technology -- the an generate electricity set and planned up two there, invested time us did the teamed a that’s And very Carbon is part too. we then, to typical of to three to the it there the We XXXX, point process led Carbon now for us The foundation processes use solar becomes has business -- start we and can the capture joined will at over our opportunity at that continue you of in today a as and there’s with their but this announced where a other us and we ways the Gas COX in can sequester benefiting and part that that that are we Then reservoirs. are cost COX power Low things a it direct of get lower to our process to established through to from There our done. of go in and capture to we project. did meticulously staged, we I with

reading so, And stop that, without the and follow-up. through and or of answer go you and let your here going ahead I’ll ask rest

Brian Singer

of these actually direct are My a that follow-up emission-free scale? maybe as about to relates is your technology, Do or line the Great. capture. for out for least technologies the can where meet FEED and talk they’re air to similar about, are the you to you in to on. The two talked looking just scaled whatever want get half that you the two study Thanks. technologies to have you power for of of half get kind first kind in capture, train capacity are of cost the if get air full What of going wondered direct thresholds to you I for and is it XXXX? can or the what confidence milestones milestones at looking you that confidence

Vicki Hollub

to an need for capture neutral. first things us is passion carbon want and and also and create that do was that’s have or the world. with who doing around our of and -- Worley operations to incredible point out, our been and -- in but the developed the to our shareholders, the has our so people become is the for for milestone we’ve also selection that and our Worley. all engineering thing I far, -- maybe right carbon to they the it’s announced for this partnerships they commitment that share was real construction a do And and partnerships the today, also that They’re that company, vision around was they’re company. all have value to yesterday, Well, the --

air to They’re guys these same with share us same partnering we thing. too carbon who that is of the vision All the to committed Airlines, they become this capture, share United neutral. build direct do.

work years. have to some milestone XX lot air XXXX. key call, and the used beyond that’s -- use capture But as done, part to they hydroxide, So, which board take having construction the And the part one that the way a we’re get a two significant is I and being get Worley I months then, we that on earnings because that the the technology selecting And done that’s confident every in of of of the anyway. last to be study it the would hoping by FEED direct that somewhere. to said on going in commitment very is about that And things potassium them us. with for of a as will there in think needed we’re

with we And need use. to we’re what familiar so,

facility pieces it anywhere of took Al we And of able a this expand in to built kind build sulfur the an details. middle I impressive are with are Worley world. the units any different. make belabored at with and think with off of in work, it it it. a million partners, familiar billion that desk bat We’ll with incremental complex were And that to just not that that the But, right of part to team facility in by recovery was ADNOC, off $XX but been there working XX% I only where that and same the the to incredibly working that work I made $XX glitch. We’re Hosn do build without and was our large that work much, And the to thing to our we and able the very huge parts. a Hosn else don’t were but And the that very, any confidence very we able know were do that that out unique I Al have we’ve there. that too out probably are the

things. and projects Worley very, major knows experienced team So, our is very build to knowledgeable. how

think efficient a lot then a from it to get make and the a to with first the between always learn lot learn is build I first one. next come think we efficient. I as this and than how it. you online, because as learning even team have one believe we this first the building it from But, them, And as we great costly more we’ll be of chance our two ones and us, we I can -- to it making more one

Rob Peterson

order tons magnitude, X% would EOR today. X for in what DAC about of that which annually, of sequester add we Yes. million train, capture And the think first Brian, I I would annually is you just described business

Operator

comes Cheng ahead. from Please of question go next Scotiabank. Paul The

Paul Cheng

Two questions.

is actually Rob. flow put preferred the of actually First that looking the priority, at equity presentation, the your surprised in when terms at I’m it’s you I X.X%. high think Rob, retiring cash pretty given for I’m bottom,

the So, coupon I just debt. priority equity higher though degree, no even our a be for from some a deferred mean, that why different to not debt you would retire wondering such high to standpoint, than it’s start you that

elaborate you thinking. little maybe bit can So, of the that a

or variable down, that’s Secondly, yield data and it that break back since Permian, think, the now, or terms the come and some is terms you And that going can your stream? bottom, the Thank in you’re heavy to the number of number you. steady that to to is of throughout year, the that about a I page the And program? you including the run is is XX, that rigs of the you’re is program, related in or bottom of early heavy rigs on the wells. more that on number unconventional so wells gave XX going heavy out that pretty of trajectory,

Jeff Alvarez

Paul, this more that is second I’ll because your probably is a first I Jeff. think one one straightforward. little answer

little EOR, except we’re it’s trajectory. answer -- do coming businesses -- any EOR wells it’s together. the it’s in just this say, two ramp-up conceptually flat of include can you but Permian your would QX’s that fewer drilling for in a -- relatively because and than that’s rigs aren’t trajectory, a year. X And But guiding to those So, you, there QX, few Permian for a not plan I now does tell question, X, as on and difference, I bit, huge got it

if to quarter XX of ‘XX, So, back, then averaged quarter now of in we’re about going look ‘XX, third two rigs you rigs X rigs QX. and the in fourth we the average in

a lag online makes that, between that sense you Rob I’ll and it the huge lighter, So, about QX not little to just let for take And think there’s when trajectory first bit wells those. but one. be it’s your -- a difference how

Rob Peterson

Hey Paul.

see right Frankly, on list obviously, the the So, equity slides, the yes, do of of the two we’re project at the now. bottom the at you slide. is looking preferred top focused that pieces so

retire As it period common in preferred agreement would least open we a to Berkshire principal, the have at one-for-one Berkshire, XX-month the relates is that share a so to per the works a on to to over order way and principal. $X the distribution have down up basis on

in near-term do with the in would outside it to that we’re that today, ability actual reduction force principal as in is but that we the so near foresee a the source well have situation that not of up. not distribution today. type To in don’t aware sit to the our require Berkshire ability that don’t we we term. order open coupon fact future anything And an below the rate agreement of the upon the to the of to on make capital common It’s certainly,

Operator

Dan question next Please Securities. from The of Mizuho ahead. Boyd comes go

Dan Boyd

up So, questions on carbon capture I just follow few and with want a to the the targets mission business.

business matching how think you’ve big big a from role Vicki, update couple can you in your oil and a we ability directly of using I does the How versus tax us now. existing your capture an just about your sort capture revenue -- of maybe And infrastructure give your is review decades first, your credits just as to from comments, carbon? or made So, a pipeline our about, carbon from and infrastructure? think of business sequestering existing revenue XXQ of

Vicki Hollub

both. use to is plan Our

infrastructure any As in you enhanced oil COX the in have the the of Permian. we may know, world largest recovery

COX wherever around it to for to we our need We fields. we go the the that need and to have move own pipelines

those infrastructure processing have pipelines. the also the for We and supporting plants the gas and plants

we our White So, and preference. the to company. deal think about they’re the through the to line, develop how EOR Energy, when why that’s we going -- maximize time reserves, made that ethanol I’ve that’s continue was with I an in mentioned when as And

and I’m the Basin, -- far Permian that Texas. to our in their in have Permian too not Basin, plants in in two a infrastructure Permian. plants So not COX are they’re get they And pipeline the will plants the that sorry. They from two have

deal that with there also same plant we We’ve to do from in the Colorado with that and did tie way Southern a Permian. the teamed them. thing, Colorado the we have the will to all down cement why plant up that’s pipeline into a coming So,

operations So, our we’ll Permian. be getting COX and from that EOR plant pipeline into in the to the

we’re thing COX But, is the that air the good you is capture concentration don’t winds have missed where to some capture to So, of the the and infrastructure it’s can about you balance that definitely anywhere put air direct take world. advantage put need thing the really the people pollution direct the that trying of. because it around because

So, why right what the possible air facility capture it and the capture and the to us reservoir can too. Oman it direct the River, have to the Powder want in do we and that direct we into. put in to DJ, with close makes put or the air is it ultimately, Permian That’s Algeria hopefully

in the put wanted up the almost prove best The we We to because of Permian. beyond world there. for want. is the that is COX oil recovery. And we the opportunities way the best utilization place anywhere -- in can So, enhanced it for this it creates Permian

infrastructure. we’ve and size the else the got opportunity Nobody opportunity a we And good that good and that option, that do do has the our to maximize we we so, scale have.

benefits chemical then, the going our XX do does. about business as So, and next gas years our to to be you we business. business deliver we’re oil our And believe And as that it’s it. as low much said, carbon ultimately, and profitable as over very, very excited will that of X the equal

Dan Boyd

talk that as My Okay. want that a from in be, ties as facility talking as in direct that comes capture? can as get how to carbon and How those getting partner? companies in share cost? air carbon That’s come United those at follow-up such to carbon-neutral, with like of goal of the Amazon you’re you companies about helpful. footprint. and their like reduction very do And fund look lower others being of we you to credits the would And your presumably, how much come to you

Vicki Hollub

Yes.

huge a is future I capture our do think be it’s going to -- of direct the part this. air to

capture the consider We’re I’m direct the going with to that most air their put from we tech industry, other the we’re industry. them facilities, from of continue -- where send industry. airline maritime their to help a services But to excited their about plants agreements and carbon have the because place we industry, or others can partnerships it, the the

going industry full will for we should capture do on these investment have air or we direct ensure all either what do. a conversations that And of what be bigger while from we too to it’s have working place with have be take and really a with capture. We’re be industries. provide going companies that process all build ensure use. as them from partnerships what to to is there able the COX the that that of having to to reservoir to believe, a we partners thing But, their the anthropogenic need we those we’re is certified in to to and And we associated direct -- be able molecule air as time, the then the from way And credit same. percentage that that over its end I track matures, will we’re

Dan Boyd

you but be from these to call still and the I pushback hate to conference about my you, last cost you on be years this get greedy on on direct lot three talk capture, to just just my the curve -- days. is with five think for But, where high you tax just curve cost economic. need credits facilities? cost the one cost make early build now of But, competitiveness can the a start it’s the first to I as of and can recognizing air of very

Vicki Hollub

very Because plants a couple and that long very are direct solar us I to say get don’t the oil -- capture and to pipeline have need a take think, far, where most the us get there not component we close been commercial fact need the bill the it for that We away, to to in capture be the of going reservoir somewhere. are point wind initial you’ve tax you with first the the just there’s you hear point build said make tell believe many I have to and place capture to wind. credit, do we’re take build And this very never is air every I if be. be -- can economical from negative the don’t an is, ability go it those the to it will air but never operate. most going expensive, not to get I direct like air for and does a being the in plant built going cost to comments but credits can take process Reality to who plant the credits. believe. to position it’s it I to the it’s already that the we to It’s earlier, and optimize we’re of solar necessary. do. going we’re optimized that -- the you to where as is you expect a the for like direct reason where working today, credits profitable and Initially, will to it a -- do in very to

and commitment just will down. putting we team. to tell to they’re cost them because in I like have on work, you it any as getting more clearly will our How it think and definitely by believe, come to how that Worley, make drive and they is working vision be committed a be reason experience, new the I of matter a this quickly I it’s components come can going expertise, driven them efficient. of it. the the our team selected technology, to those is the on So, together down

within the we that too third or very and That’s a areas other can not not And to so, going why over this needed. long to internationally. the second confidence I we’re time it where we’re expand be have have confident going to high level unit, are down to that credits time

Operator

go The of next Barclays. ahead. question Please Jeanine comes Wai from

Jeanine Wai

significant plan what able Leverage or the or for -- do is said plan next and have plan weren’t, an both? I back to first of just is question, think, base first to get XXXX early the meaningful peak year instead Our ‘XX. our question is year mean is this that improvement event a and might might to Paul’s corporate more for on completions in you kind pretty modest that in have. we’re but ready a amount to there were ramp into maybe corporate XXXX, or oil the year-end trajectory TILs ratable it for growth ‘XX get Does prices completion a you if maybe include ready to trying the in for XQ, get any kind just little Permian in CapEx the there’s XQ. to out bit ‘XX. of figure if on

Jeff Alvarez

the jump me and end. Jeanine, start, and Vicki in Rob on can then Let back

for production QX the average is obviously, year. lower than So, the

partly than how -- is But, higher little XXXX. late But heading of be X, wouldn’t partly X, started than of and are think every in QX, how three and X up going It’s program the of a I because It flows necessarily our that into doesn’t the development quarters look different. first increasing -- through. quarter, year is continually the be there then we it will it just to the because storm back higher that. trajectory like definitely, some as one. So,

I driving growth think, not as towards we’re XXXX. Vicki said, for

intact. remain priorities flow cash Our

free as continue forward from generating focused cash as move pace use the very that We’re fast we on we business can can. that that to deleveraging and -- flow

Jeanine Wai

That’s very great. Okay, helpful.

mix the can few a how time five-year guidance this runs issues being the how $X.X will years? Midland billion the as anticipate $X.X that I do CapEx, some the of can gross to For CapEx, but Permian net period the in there’s you flat some hold sustaining JV do over, out? Permian And TIL carry that know that sustainable? that next the with change over billion three year, you area say, like anticipate on

Jeff Alvarez

hit them. of points on I a couple Yes. mentioned you there, let me and mean,

it’s standpoint. a Midland So, from very intensity helpful the capital like Basin JV,

still a more little left XXX where If on the carry at look that, you XXX or than through, that. got we’ve

at another least through a get that So from standpoint. years will of efficiency capital us couple

as ramping that capital, intensity to asked a difficult this up were as three you just was And And to teams the I have where way. as our works years we opposite expected going continue we to this that’s example, when better. year the the it year as of resources today where ago. business we’re so because do capital be ago get in guess would to If low business half years usually wouldn’t doing that in us an what will be it’s be, where are we’re two

better. continue our teams to get and So, better

four me years it while now, to that’s I guess than what So, bit change to our from meaningful would a from hate Permian on going higher it surprise a billion wouldn’t be see I hold three expect or little to $X.X that be, to but Basin number a wouldn’t flat.

takes. puts I think, and you’ll get

That’s coming going as Our resources both from XX to XX. about down to decline continues down, driven you by come unconventional the to businesses, decline Permian going saw that’s Rockies, to in our our improvements XX. largely the XX% Also corporate from in XX%. in

bit. going intensity teams to So, forward. that better, also capital to expect get with as improve better and help that that the continue a should And I

I the years. over a So, I answer is, few next it short guess, go expect up but a the huge could wouldn’t little bit, change

Operator

question. with of The go your next DuBois Societe Raphaël question comes ahead Generale. Please from

Raphaël DuBois

was your take confirm new Could Thank is your bit hedging this is presentation you on surprised one can position further see remind I slide your you that in position us And QX? on oil. first hedging? about you not what crude in The package. for please to a didn’t a you.

Rob Peterson

Raphaël. Thanks,

So, is regularly leverage, in over it provision prices cycle, we XXXX, but had an increased one preferring did, to realize with also But on the that to in hedging, a our the hedge collar point, take XXXX just then the your call that’s shareholders. Company the oil a in delivers not most to that historically, XXXX. engaged in had

So, that the in oil is the only thing XXXX. remaining provision hedge from call

of hedges call a basis, as value per XX/XX as between shows, oil though cubic million on on costless to similar the gas standard have option XXX side. we costless with year. on basis deck gas the $X.XX for day extending on slide no the We hedge $X.XX a put and XX, last in a There’s slide place, natural had

We regular of cost side on doing We evaluate on additional doing so. continue to not a oil evaluate so hedges, the the versus particularly basis.

do collar in pure require current despite and price, in put. is you the can hedge year addition we improvement extending the As in have costless imagine, going cap fairly expensive, a into still to today a the one XXXX. type the hanging one year’s last hedge, both It’s to others we

at look we -- the maturities somewhat against near bit the downturns when term. in a business debt which the so, the moved is quite in term, of we near down the in a hedge And

price. also We leverage heavy know to exposure, appreciate oil our that shareholders

be going of future. And now, we’re so, and something the in we of if them as evaluate but put have to place going to not continue in kind see they’re to constructive

Raphaël DuBois

one-off any, clinical your if you financial after same quantify cost for the this division? helpful. Texas quantified, Did you wave any very restarting My question in That’s And Thank wave? for question second the is, wells you. of division. your have about implications cold cold

Vicki Hollub

restart one, We of have the or oil not quantified either chemicals. and the the cost yet gas

up And of good I to looking the -- we take as oil some but The think see But, still going starting get quantify the to We’re of to damage cost. with and end the got chemicals good. to the very thing are chemicals still put we the no in this it’s their back a We’ve production XX% us in starting the the little and wells out. facilities, gas. is our is permanent while anything. business of back on,

Operator

today will ahead. Morgan. And questioner Phil with the Please go last be JP Gresh

Phil Gresh

budget one is year. this for on here just the First capital

every uses in guidance you’ve the inflation talked risk. barrel, $XX And be about XX% that the Jeff, know think, WTI potentially price. CapEx a for I $XX past, there could I the

the curious, what the seeing bit is in to to CapEx you if production requires priority be stick I’m or Thank to budget? the a are hard the maintain on pick inclined So, you. something And would to year, the it for the raising later times more were inflation? inflation, if you X up

Jeff Alvarez

the for true. mean raised, the change Phil, mean and time, seen little at you with We I and both generally Yes. with that the that in looking different down a flexing in past, a guys I time see changes as oil most in us guide we’ve this pretty of are it commodity is type good really that inflation, of deflation. changes What’s closely, point price. up in $XX you activity. correlated price

And you so, strong this seen time, price pretty know, in lately. run-up commodity a we’ve as

we We see historically haven’t that seen the that. correlative activity with change

so, really, you kind come layer And pressures of where of inflationary and for need and a the from down in when so from, lot activity on. changes the it’s resources

this time, a looks different. So, bit little

not huge pressures We’re inflationary seeing yet.

that. crews course, Of they number driven there’s are, of by parts are housing a market and more starts, that like running the of than frac things

And so, we have we into puts little And what and the built and you do we budget. know see, what get takes.

But change. in it year. that don’t now, absent we a at we inflationary on right to don’t environment. with at a was what with seen largely what right So, little But, expect early expect materially but we we’ve wasn’t poured of number of to reasons, see it least least change have for the to price that any lower that, now,

Phil Gresh

got Jeanine’s my follow-up along Okay, of lines it. was the question. And just

But, because DJ of to the what low some implication was curious Mexico, the You touched history. for businesses also, areas, of CapEx other relative is sustaining upon Permian. Gulf the are of those I quite

you. I wanted had just go would but capital ‘XX. yet, be could share those know be haven’t additional much XXXX really lines past on business and comment Thank else if to was anything I color sustaining what curious the you you interesting. on beyond So, any you for there forward other beyond just implication too calls, would of

Jeff Alvarez

I’d the same mean, I say Yes. thing.

the I is GoM mean, So, interesting.

is And see one that mean, so, its capital first. what hit this me year. let I you on

period and --if its one we that because million that. Permian time, to doesn’t the of or in comes things it know, than looked just a that that, There’s it’s chunks lumpy. in think does I and over DJ a bigger more dollars. as tends few well there’s tieback little long more be It goes costs you capital like cost much a with at

strategy than in if cost XX% Oxy doing. with the is I Drilling Dynamics generally mean in I I Vicki less think the So, to hit know, they’ve super they wells going XXXX. high-return where teams that The tiebacks. was have you at been been drilled, GoM, the coming are our around characterize what as were successful on first they And two

when So, that’s to we’re platforms. really sustaining having good new help you going at delineating and our look success reservoirs capital, around

a a So, not five-year what we question, all at over higher your we there. know our sustaining we the doing. a if than of period, looked the things to answer explicitly happening a But at good are we this higher I expect we on to about year let’s in this I number than this Permian. would probably -- they’re huge look lot a a be It lot, capital the you given million from it’s, the where making that this year, and the of period. have look five-year are similar may Rockies. to it’s When have difference year. what be a a improvements at hundred couple again, year. am Again, performance over but probably DJ, said And talk the higher astonished I businesses you but what bit But

You the days. it restart ran, was X.X XX% in two fourth than was rig in a to it XXXX, time release period. for that’s quarter, and they That look what rigs in better rig at release the their was

is our And really on pulled last of million OpEx So, EOR out over again, this don’t Same sustainable we that talk business, they’re lot about, a thing they largely doing well. really, $XXX year. their year. one

are to things of through kind benefits So, flow going all sustaining you capital look look of years a as we at the those few those and to out.

going DJ, for bit I’d be what give huge we’re just seeing So, similar it’s but a number to of be change. the because we very DUCs not year, higher than material this in could and a it year of a answer, little brought this

about confident a much higher period that pretty of a next thing. a XX%, with a that we pretty longer commodity see confident time, maybe our in feel world if for higher, XX%, for We we you’re change few the price So, of bit feel little X.X%, but don’t in kind years.

Operator

In would session. to back Hollub Vicki like conference the the any over for interest turn concludes closing of question-and-answer time, our this I remarks. to

Vicki Hollub

I’d thank questions say just a like Have day. and to you for your all for joining great call. our

Operator

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

disconnect. You may now