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OXY Occidental Petroleum

Participants
Vicki Hollub President and CEO
Jeff Alvarez Vice President of Investor Relations
Rob Peterson Senior Vice-President and CFO
Neil Mehta Goldman Sachs
Doug Leggate Bank of America
Roger Read Wells Fargo
Phil Gresh J.P. Morgan
Paul Cheng Scotiabank
Neal Dingmann Truist
Leo Mariani KeyBanK
Call transcript
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Operator

Good afternoon, and welcome to Occidental's Second Quarter 2021 Earnings Conference Call. All participants will be in a 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 Chad. And you thank Thank Second afternoon Quarter participating Occidental's XXXX for you, everyone. Conference Call.

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

Vicki Hollub

Jeff, and you, Thank afternoon good everyone.

highest second performance in flow of a strong performance our free decade. quarter marked over Our to the drive consecutive quarter as in level we robust financial the cash second operational generating continued of

to generation was for provide As were solid free leadership cost at proceeds case to have continue our as were to and billion generated as of operations, debt to flow quarter, process divestitures. the the capital using end position over of for retire a structure intensity and from the a especially a tender pleased quarter excess launch last in well second cash our foundation future. results We strong the from in catalysts been cash $X

business efforts. Rob completion to in and deleveraging we XXXX divestiture all midstream for of businesses progress. this guidance, sheet our balance our our full-year tender and reducing and progress our the our an the sizeable will Second morning, debt OxyChem our -- the improvement, increase as forward and Quarter guidance updated in financial cover rate of which cover and In Quarter, improvement made our includes an DD&A well outperformed. Second in our XXXX, earnings. production of performance incremental for results as first represents While throughout I And XXXX half operational and step will a This

flow after combined $XXX the to Quarter a commodity-price capital. level and before with environment, a efficiency, discipline capital cash a supportive of positioned WTI improving barrel. us That's highest working hit the free generate and Our when and XXXX, Third of

used I'd of improve little Rob are execution $X.X efficiencies we which balance on for We recently in cash exited reducing making strengthening closed like our approximately capital teams does margins. tender, accomplishment, cash, and that to progress but to July the continuing July. from in be, proud our the sheet. touch and the which for once quarter they cash include reiterate more will our detail, further appreciate how to divestiture unrestricted notable a again, our operating debt in we and billion tender are expand this not or received in We of closed to pleased the with debt the are

our and almost to X.X our day. operations delivered oil per of million. continuing operational spending Turning The of over gas million Company-wide results, capital business total from second-quarter production XXX BOE

demonstrate their to continued in guidance pricing, gradual below to gas second been XXXX. over operations efficiencies will while benefit business challenges while XX% original markets. well midpoint supportive from ways representing caustic of increase are In overcome remain operations. to oil in half soda our Our the strengthening $X transformational. we innovative full-year guidance fundamentals confident almost to in believe the domestic gas to operating the of safely the BOE robust of markets demand $X.XX And quarter, oil an substantially for the our our increasing has The increasing of guidance through teams We second in costs year. new our a billion, our our ability as for reduce these and per expertise, and PVC OxyChem finding full-year as costs came field continue and as

asset. Looking a able of divested months major operations million a day. the weather increased event our for full-year X producing lost to year, back and make impacts X.XX in guidance of this the overcame were divested and have We continuing production over we BOE and to the production per first up

We be our performance highly Portfolio. continue to well encouraged by across

prior a example, For we this more recently bought Delaware, compared Texas, the in is to area. [Indiscernible] XX% oil producing online development that new approximately in a development

rates brought area an per X,XXX BOE [Indiscernible], miles a we average roughly XX-day in Additionally, development online of day. XX peak Southeast with of X-well of almost

mentioned, operationally, efficiency Portfolio in day. new a records Basin, and records set over our as eight set release drilling a feet the the only In new to to set record to pumped pumping Drilling XX spud in In on a drilling record, record while We foot well with across feet OxyPermian pursuing XX,XXX Oxy duration, for the of XX I drilled drilled lower the we a Utilizing less over XXXX. single contributing Midland our we day. a rig in costs Basins, than new Dynamics hours, new As have XXXX wells drilled quarterly frac average in XX% hours improve. hours drilling days. X,XXX horizontal teams cost constantly in set single continue opportunities of Mexico, the new Company-wide in to and Gulf DJ we significantly have a

results leveraging mentioned had excellent call, remote I operations. on As we've last quarter's

innovative breakthroughs to capital envelope ability best-in-class and will efficiency our allowed technological performance have the us to continue confidence me continue. leverage Our that mindset giving pushing

recent in plan the sale advanced Permian closing non-core divestiture with acreage Our for of million. quarter a approximately $XXX second the

price at have to in the that this we acreage industry-leading monetize would our assets an welcome near unlikely future. the Given developed Inventory depth, is opportunity attractive as it we these

as macro value $X over its and how we've at to our want of of even business, flow generation. Carbon spoke divestitures to earnings how is Post also to with recovery deliver adjusting approach Low results. been we to I a to about financial to strengthen key multiple we'll this The prioritize environment as and Last business. least margins. for has low said to ventures develop carbon XXXX shareholders cash past profit And business deadline. our a We the between optimize Colombia. with OxyChem OxyChem to billion minutes integration production the generator consistent OxyChem's a expect into record during flow integration in is may meeting consistent Ventures improving, plan to business. to track surpassing cash mix our year, its by close few ability Chemical moderate our while one track and quarter, obtaining expertise the OxyChem take soda provides years on previously, demonstrated a always continue across and of There free talk the apply maximize of downturns. soda, free opportunities we only drivers leadership derivatives leverage I for OxyChem same business success caustic about record for And us price has date. as experienced production chlorine many opportunities opportunistically us performance our to the caustic our are future

potash, customization, low of is oil major utilized producer Direct will also producers process PVC, or operation largest Air of dioxide a which the the capability as a PVC the As the the world in caustic technology the business. engineering, caustic OxyChem key carbon as and a to of construction be build of Air to in process major and production leading the handling carbon-neutral R&D, our carbon ongoing expertise, potash, necessary component of Direct world's the separate for Capture has in and enhanced leader well chemical one sequestration usage Capture and facility. We're OxyChem recovery.

handling caustic Our Capture facilities. equipment quickly key design best experience to potash Direct optimize of with will our be and knowledge of and helping operating us our Air

a walk OxyChem efficiency. remarkable consistent flow the contribute safety, of are achievements U.S. tomorrow. OxyChem reduction, to In award-winning and The energy Awards. and to recycling, Responsible It's our business chemical integral leading Chemistry guidance in today industry's awards to focused XX and that will will safety, is improving reuse, to the These waste performance. is addition waste also a performance free American leader the a from initiatives up leader financial on awards. year. being market of environmental energy sustainability and efficiency, the noting Care second and worth market generator, which for OxyChem call health, XXXX cash and are Several the hand earned in Council, manufacturing our quarter, our results who now the for of OxyChem over goal. the remainder all I'll minimization, recognized through and you 's Rob, recently

Rob Peterson

Vicki. you, Thank

potential in billion. our for in generate to change performance to quarter. ability balance price of of perform our well a quarter, the call, generation to On and reversal in first capital confidence Our last the mentioned second free contributed cash the cash working I the Strong $X.X environment. affirmed healthy incurred as businesses our flow a unrestricted cash partial quarter-end Oxy's continue

quarter million, change we As benefited expected, this the our to of capital from approximately positive a further $XXX build quarter. cash during contributing working

profit Quarter, partially in late acreage, Subsequent announced July. Permian of quarter As adjusted early diluted $X.XX of of successful over debt position launched an in execution we $X.XX Vicki a our the in received non-strategic the In enabling we billion us the for quarter. debt per and to the loss $X in proceeds our reported July, share. of mentioned, we Second refreshing post-tender repay a tender tender cash

to we be our are generation, focused importance income generating to on a greater basis, that a view an placed pleased financial continues on especially deleveraging, and we While position this flow are indication positive on as improve. adjusted we as cash

of having reported half billion. deployed were less full-year capital year-to-date Our primarily results our results, delivered less to We adjusted our $X.X than of budget production mark-to-market outstanding impact than while due of results derivatives.

inventory even remain working capital the quarter due receivable cash discipline our the that accrued year. water, higher change higher capital The increase and and half throughout We than half capital from payments expect accounts offset spending of by as realized of second items in year the the crude our pretty of demonstrating in the capital lower positive should barrels budget, -- on intensity for partially by was the spending commitment within the leadership, lower balance in commodity capital to first is driven fewer the prices.

As payments than semi-annually, are bonds lower in made first the third our fourth quarters. second quarters on significant they and payments our are interest interest in the cash and the are

our and from additional flow received approximately cost an a a of oil with $XX During the of strike we a downturn hedges. year, obtain day, of price last structure, XXX,XXX of position rent. XXXX To call billion average XX% $X barrels cash sold we

in to worth received settlements and minimal been commodity date under in certainly the on sold Cash we July. hedges we year. benefit our are payments position, rose and gas prices As the the under of have paid call hedges made $X.X million quarter, $X the second million last the

In providing hedging. more end believe the solution [Indiscernible] the towards long-term We with reducing was the our debt to of approach Midstream and year. year. to profile guidance earnings balance but maintain our gains. this fourth continue have debt while to hedges maturity effective, any added manageable a second a is following Quarter de-risking OxyChem the guidance time raised supportive, shareholders Second commodity our past our opportunistic for increased not and We strong sheet production this full-year results, exposure for price and creating

performance strong improved and first-half market conditions. Looking

We be year as Third that sulfur even in prices a from sales. the up acceptably well continued soda to related Midstream year part XXXX. middle the higher risen, XXXX second benefit our expect of in that the will half from earnings as in of list prices surpassing to of OxyChem, timing in strong We the is export year. for Quarter caustic benefit that are record expected

result more prices reserve commodity trailing This XXXX, mid-year our a lowered year-end recent as we success lower is supportive increase our in which takes DD&A our DD&A XXXX guidance at well a to operating plans also account update The rate in to update. lowering proved midyear to compared costs. in XX-month activity and expected We reserves, combination going forward. for in like expect as

a Rockies and average to day. expected conditions the from lower-than-expected Our Production production. time-to-market schedules quarter production in per half to XXXX better expected is resulted Permian. higher million maintenance in sequence in planned Favorable of second BOE weather activities X.XX of Gulf second optimization in contributing of downtime the and acceleration the shut-down Mexico, in benefited

our XX,XXX in seasonal million expected front-loaded production of the of Rockies third-quarter in day maintenance divestiture for includes a XXXX, which the due per in approximately timing and Our of Gulf the program, as allowance of an X.XXX day Permian, price. as per Mexico, weather BOE capital impact PSC well impact to BOE was

in impressive enter the we lower Even pattern year XXXX a similar remain second production our of as XXXX. results, as to we confident the we than in production trajectory the second-quarter out production is anticipate where half production pretty leveling

We include additional New our two have rigs. activities Mexico to updated slide

be we'll and projects position budget. activity Mexico assets our New will activity efficiency capital fully through change not XXXX. us transition to of funded savings the place strong gained our capital increase of to our one cost will optimization we through Adding into highest as improvements, but in a return

With over the billion And our $X XXXX the in through tender, runway next successful a of have maturities. we few of I completion years. paid debt clear XXXX

prior of to As we executing exercising we generate for may to we debt profile, cases, our maturities cash which they we're calling flow, The seek cash due. and to to we'll single retire left organic additional reduction we amount not the available include choose, some -- may and a further evaluate build notes pursuing available to in than maturity us be make-whole debt or to for significant options attractive debt the free over provisions, cash reduction, maturity, so continue any rate market year. XXXX tenders, maturity as options floating towards initial any applied repurchases, that debt position, exposed potentially come

and retire the of swaps rate of annum improve will over a to preserving focused And current XXXX deleveraging and amount, back the strong the the look end position best $XX Third cash I in in at per discipline. interest We $XXX value metrics in regain in turn notional flow plan curve. year. capital fair Quarter almost for also strong call half million on We we Vicki. policies or of the investment-grade now the priorities forward, beginning cash million which financial position, a second by liquidity as maintaining flow remain the to will

Vicki Hollub

Thank you, Rob.

of priorities. progress We delivering proud in near-term substantial cash our are the flow

work and our marks our and further lower balance completion next significantly the the breakeven. our this of effort we recent to have of tenders, our reduce de-risked deleveraging debt with stage We successful sheet debt as to

priorities, continue we still work our that to stage to the to we're call that of And do to returning capital the the have performance next your we questions. have additional we including operational date open accelerate flow deliver steps progress. strong completed the cash While and transitioning before to to I'll shareholders, now confident our will

Operator

Thank you.

one follow Instructions] We question-and-answer Please your will primary questions one question now [Operator and limit the to begin session. up.

you time, to from Goldman assemble queue. further this momentarily we Sachs. And Please have roster. will If questions, question you first pause ahead. may re-enter will the our the At question with be Neil go Mehta

Neil Mehta

really out to year, of And that on and see talk and to Thanks views your of next much. so PVC soda where want sustainability year pricing here the results on margins the and I and we that's you caustic remainder for there? the Can chemicals the strong start.

Rob Peterson

Yeah, Neil.

business, vinyl We caustic very see soda our in continue Vicki to in steady conditions strong indicated. with business improvements as and

for both it's conditions, as unusual, major in our is usually we conditions have businesses drivers profit when do can you businesses X, business. market seeing, on favorable are the impact, but chemical that As the two earnings these see Slide significant. you're are And

in tight XXXX the for to business, strong on On But XX% So importantly, seeing industry XX% as year-to-date XXXX. balance. was where - higher in it's period. the extremely in PVC demand the due it compared period non supply-demand basis, to up remains same business more COVID we're a an a domestic a about

tends construction attributed construction of of start remodeling. also remain investment really combined low, And materials. which and rates housing to supply lot and strong mortgage seeing which the a Inventory is train outlook, drive lot in business demand a strong very also you're so And to obviously to of a with levels sector historically remaining low we and the with expect their demand favorable

seeing favorable we're us. tends -- improvement PVC production. shouldn't which last thing is it And are straw soft, so there's say of of those indicative we're pointing that a would to all of only business enough towards sustained when to year-to-date the when where allocation not The margins of now, product we exports and kind go like export remain XX%, factors I be for down are is is see market, That's around, the PVC business?

very Portfolio producers side, as for so our coring [Indiscernible] coring molecules. coring of maximize a derivatives allows our and mentioned, coring highest is are the very tight, of value seeking to as really On outlets And molecule Vicki value the itself diverse molecules through opportunities. us the chain

of us XX% of pressure actually helping see, lower about because both year. with the in this Quarter, lot caustic Third year-to-date, and and we rates, X% over moves year. And than for would that the further eventually global so last as caustic be itself in economy. in goes about And under you -- we're plant Caustic caustic as the with year business. they tight the this has they in versus in certainly to economies soda sectors. outages. then, for price ease and unplanned tends additional a anticipate less running planned to increases see for across already in demand production you simply And improve period support production restrictions underlying versus up XX% 'XX prices, quite outages towards has are scheduled been look been additional travel if open year-to-date the something available 'XX We're were with that we same last globally, And year should

we certainly And paper the as demand the sector, in treatment, improving in all key the and as pulp and bleaching better sectors, the third aluminum far sector see demand quarter. second half, so the in water sector,

bullish And into year. the XXXX as both second are both underlying of headed beyond. looking factors ECU of the and strong the them move the are certainly of sides for half So we into

Neil Mehta

debt your from the on of where And at place you what is? earnings to is or you the key shifting deleveraging follow-up what us the something emphasis returns. what just one makes focused Is target a which approach continue milestones a from more is thinking point investors can absolute of the remind cash Company Occidental deleveraging about then should like dividend? takeaways one lot season. business, we at Can be to this reintroduce point, And of sense. the a And on

Rob Peterson

Yes.

it remarkable costs, making both headway production flow as the we -- management, in on call with it's Company stack, and production, certainly through comes was And between chemicals, process. topic the step cash on of what world on leveraging available and - slashing the maturities, a slide success capital a the newly cost lot the refinancing to jour risk to of we're a contributed cash took XXXX, significant de-risk that. to journey strong the the which continued of depicted essentially that really, included, performance, from after [Indiscernible] we tender the detailed now of in a when of all turnaround COVID combination in So du XXth priorities. our post the stabilization And Vicki we're July in on and forward a the diligent upsize I execution

for retirement. to could about could work forward, prices billion And Program. $XX.X generation of majority from that critical anytime as these inhibit anticipated in retired would Investor it's debt that to the prices, granted it's in because - balance 'XX macro-environment we flow as the ultra-commodity cash think advantage we've future cash post so our to we billion towards our combination the of the that billion our be And of we'll the sheet now $X continue look will be that. that the $X middle that, changes Colombia take source through And ability affect do we principles divestiture business we cash But of target I of at that to elevated established. know free since deleverage the the of the

in move that remain So to March the and path of impacts priorities the focused when now that I shareholders. focus steps because increasing upon prices, time which we've we're the part on commodity able does in is the since our strategy I long-term think that list, look around of rate all at it path. on future in that our takes taken 'XX at we're down dependent long certainly we're But how value X certainly a being past, our it top -- the do to right are

understand likely Dermot remains that some And same little modestly more the in that we models, agencies does look example, at keep below our price financial obviously For saying side, the well with the appreciation. holders our the with. [Indiscernible] started is in sitting strip. and weight de-risking why the today is commodity a mid-XX that structure by of level profile form our ultimately less Company we to And lot a the to going fluctuate that believe have of be much in metrics. necessary equity ventures, using refinance interest prices leverage get much do increased to risky in the to with but benefit phase sustainable those while of last simple range, at prices. year the a That's process like and deleveraging orders maturity in to we could still achieve to process. a equity are oil we're EBITDA we -- capital we a also saved attractive current and the And is debt And their more

matter to a we financial In decision. great and policies debt obviously, addition that's ratio, understand,

So, in unfavorably. use viewed cetera, of near-term for dividends, et the growth, ultimately cash

debt So will we that's to of resuming reach why sustainable we amount shareholders. remain more we focused level, once process. greater that on And start deleveraging cash

Operator

question the Bank And next Leggate with you. go of Doug ahead. Please from America. Thank will come

Doug Leggate

Vicki, to returns, I not you equity year. next everybody. Good over and to there XX% when say. of from X I target afternoon, it's Good debt moving $XX it's guess $X it's X $X cap market really is the disposals between should how like billion would target. billion Post-Colombia, like frame when it you you. Gosh, how your rent of for billion potential look amazing today. not for it Obviously billion everybody. continue Thank me my was [Indiscernible] the And I accelerate of to the quote the the question you morning, to rub can cash announced and this, But that.

So the just X a targeting on us oil or to, more you are the you guessing moving expect an the price can assets -- update prior are the albeit do you basis that fewer X? prices. do question given X.X can than do I'm give oil as to you for you with

So you seems [Indiscernible] I given want side. billion. X can to me, lot me just prices you help to to do the lower a probably $X terms on the It the more oil still in absolute

Vicki Hollub

the point, exactly this not out, end of we At change that we But really the that we're set you're to lower very although goal. prepared goals feel achieve we've right. will Doug, comfortable

is today far did monetize, than to can't looking our to most this better the create the as Given opportunistically in have We're opportunity prepared keep we optimization can with of to say to it It's generate opportunities want looking also and at is situations you putting that value. assets create just that get and the to where acreage, that see to ensuring and optimizing portfolio have dollars they monetize know there Permian do meaningful be that things the other rather what our we continue the those so be best-quality But Portfolio monetization that updating, an all for future. to it us be value value shareholders still today the to our just is today. to We're at to the at we than us additional could not you're you we I Where out and we to opportunities. your available yet plans, looking It's at there have same thing have those not we we our change opportunities the Portfolio, looking into value today, -- to it. that when where sooner do later. constantly guidance. where did, could your just optimize not going in and that

continue as we'll the keep mind along. in we to Portfolio as So review and that we optimize go

Doug Leggate

asking the but assets, if the for fact of price again, obsolete Vicki, of proceeds, is the of ahead same the terms then, have schedule I apologize this, for on you higher. clarification are number in oil you reflecting

Vicki Hollub

that, that We need of we by felt are what and guess, for word, opportunities opportunistic as I careful could. more, get sell But looking door prices within the be, schedule our off divestiture what various in higher parts we're getting to add more careful other our come those right in quite coming a we're fit but we the still of end on comfortable in. the opportunities is for tail other's I we I would look with given we today, mean we're said, they oil are portfolio. at do. all with prices where of at And And flow very us more that be come provide raise respect cash I within where Portfolio next think what sold only us, over Portfolio would to we to that word level. But Portfolio the our that for fit -- critically. -- could I that the not additional is out I that maximum started And situations not are a XX deleveraging months the things and XX up would to to not that there's because -- the we've ensure to by think to much But things value the not program to could very position like in progress, we compete don't commit going to our and that opportunity generation now, funds. our with want in say and because just we cutting could can much

divested the the is at more those to best a we guess now, the getting say we it. to So way were get divestiture end, those lower of than I now that value assets as assets, expect have to from where we expect we're

So at looking -- but we're open to we them. see opportunities as

Operator

And Roger Please, with Read will come Wells go ahead. you. Fargo. Thank next question the from

Roger Read

everything a see versus using from have and for just where getting to the I Yeah, time comfortable speaks sort like maybe a more months of back gone XX debt guess and clicking good about I'd maybe maybe the what everything first long-term a was hedging strategy number pieces the maybe some thank afternoon, away of and I you. metrics to move in quarter. to any you're congratulations the XX debt-to-EBITDA, underpin while. that a you now to are into address, months decision to if from thinking on it ago? with, you're nice And all where debt-to-cap, It's guess the that

Rob Peterson

Fair Roger. question, Yeah.

hedge has position exposure one to So haul our exposure with way, for that's was necessary and billion And some versus worked certainly it just year very we attempting upside with we'll to in expensive, our came evaluate the and provision of been philosophy the had over our we're is to hedge a shareholders, price a collar. the that certainly were in event year, from And as year the ultimately is we dollars a XXXX opportunistic implications call were the maintain And certainly changed price, that hedge. like did most historically, hedge price to on we the which out be. critical was we the oil us can lot they X create as a that going considering Certainly, what protection able to approach. success because was have to to -- that the value were in in year. continue that where last but we're as leverage and cost leverage we negative our to that the to was like try the in to that But the to such long the something Number create been this deliver create not hasn't value. you've ultimately of cost the the execute combination Company a hedges, factors. commodities, last to last such would value hedging felt our environment, of

shareholders. and be pretty so limitation hedge expensive, And to would on that pure collars to our put like then we a upside, is put that going are

down knocking as the And that's at near-term a focused look taller towers so we debt we comments, just that discussing the beyond if you the stuff that particularly on. manageable that, profile creating think

at in And a bonds look effective to long-term addressed [Indiscernible] tender, timeframe. XXXX provide solution didn't of recent that. the more the that we you XXXX were that If XX% it's

value current were able I end prices -- to that's continue so as multiple. use a use do a trailing trailing higher be think continue And are could can X with the and the of with of EBITDA rating nothing year, by the below being a been agencies. would strip certainly be if that inquest the than values the certain It with to as that's retirement. a times you used of by to discussed, we on be much we've we unless necessarily debt strip But you easily doing

what prices, why do think so also And really for but while I which ratios, the in our in have mentioned we're to we commodity us exactly my terms it's to wind I it's the is maturities of comments our important to important maintain doing. us go it's back after at

us, we continuing forward. addition the notes. of interest And $X as the to that that, billion so a worth to make available Year, the out rate the be and for callable at tried year, that's strategy or on of aside easily we the haven't structured significant way whole to payments And look the New tender left can end then and amount to taking mature we debt you before either approach that's the going floating that in

of go access which debt And towards cheaply to that. balance further continue so further moving the to the will that gives us retire over very year, forward and

giant We deleveraging quarter. a got do, feel but to the shareholders like do I We and So done, them just don't. now, work still particularly all work has certainly forward decrease lot more offer made step give do. moving we've that -- hedging we is we've between them selectivity the tender lot runway would is for getting debt our that it a right others in have a the to preference to made give many Not the OXY that do price, the exposure strategies again, cleanout and forward. with last something that say to the but value oil -- us our around work more us to has the which never is certainly

Roger Read

the little Vicki, curious. Appreciate Does no just of -- a is improved Maybe a being comment and productivity evolution good answer, things the that. pumping directions Capex. efficiency on here. other and seeing that. just Mexico, was gains risk that New overall. of able on appreciate a mentioned uptime I and the you're a The two to the with just function or it about gets profile reduced of continued bit a to That's rigs question overall, and out the I reflection efficiency question jobs? other productivity, add some like Maybe changing field. the in my impact

Vicki Hollub

program to we a that the Yeah, of current rigs without efficiencies could any facilities to the needing the incremental utilization it our infrastructure was additional of drilling shift ensure capital and of X combination also expenditures. existing

has the are doing. improve a continuing opportunity, that it -- really teams So this to they're created good fact what creates our

Jeff Alvarez

just it's mean, were Okay. we And important our think activity said, you year. ramping profile, Roger, down on top look Vicki of if I what I to through at note. the

flattening that not ramping the that it's down. just just profile We activity. XX. XX rigs kind necessarily budget at up so of not same. from the we Today XX. case. we're to We're still activity down out not It's went So while exactly ramping the still capital keeping we're are

really you year. So that we're pointed next to not adding and about the more as out, impact's

up, XX,XXX will another approximately quarter year. activity -- set, one next a will started it rig add second to If that one you -- barrels look those soon, that startup at day

So that year. our will capital help into going profile next

Operator

J.P. be Thank Phil next from will ahead. with Please Morgan. the Gresh go you. And question

Phil Gresh

to were what just activity follow about levels. up you on talking with Jeff, Yeah. the

that you at is? stop or Any and it Yeah, around look around it second you Capex looking half I'll annualized XXXX thoughts Would you X.X levels? spending, keep there. second-half initial As the billion as spending to so. the just be where

Jeff Alvarez

little Fourth our good call. cadence know, spent When half. things you usually that But Quarter a you a first relevant things read it's early can to into XXXX XX of that see on capital can it's question. and We in do you about and looks mentioned, the us And think it. that that's year, couple drive at I we've the like. look Phil, profile, And a for our what It's forecast as point because to you your as for there's XX some that. you

For example, lot chems you our On a over million, our a They've can only a activities back-end XXX that the were billion, Permian of so little much working wells we've million business see is slide, XXX of in and we with Midland carry. X.X a those spent forecasted million. about XXX for weighted. our activity are our so interest lot of reason the front-end loaded, that, of Basin lower spent

that. we're to of working wells with that higher interest getting Now our some go

spending it's where So an than cadence it changing. about more we're a more how is really and drastically of activity capital set

quarter So XXX need wouldn't number a next read for into being year. we I type what

As look give standpoint. would talked lot on from this an a continue previous we on great to same to improvement narrative you forward, I operational calls; but more color the XXXX, going see obviously we've about think

to ask it's that what by up the exceeded come at an Every time our together, doing. slides I that and this again, been away look think set, records we are all teams blown and put things teams when that done look for again we standpoint. you new our from we have efficiency have are and again of new the expectations year, our

even slides our for Rockies going to of the last night XXX for a we team record like we July this, pumping for stop. mean, I And month think don't after together of a that's set where so got put the notice I pump. hours efficiency

math in that's record, XX% the our the the provider You start than Western service that that, for record Halliburton. and doing better and previous on vast Hemisphere that did

are to going continue about, forward, know is that we've those that, year, against are we I some especially that see we that know benefits the to that may little we're was more we want with a we the to will low there's results then think to think going and get improvements GoM us capital and to short in increasing term. I help that of the that things offset do the spend. to could in projects going little and of we'll in I things need efficiency takes got this don't definitely doing we so money and and build up, by from We've compared the in And talked come but as run efficient type roll what will activity other half on that's to that probably their. the And of the think, budget. to a that that business thought on year, some underestimate to why rolling spend capital to we capital more we going takes future, more get those teams improvement. More run push add through, you but this some that cause talk without we want first hence out, great could do be to the of they saw the all what better that about capital that But

Phil Gresh

next question Vicki. My sense. makes guess That I would be for

would how process moving are the opportunity of should where the look X next from As you ahead EOR around the we months XX in timing we forward, potential Company you terms updates anthropogenic as about to COX? the CCUS? business you say say, think think of about And the to

Vicki Hollub

Yeah, or in may barrels remember, enhanced the as resources recovery yet have reservoirs. X in Permian billion conventional you and we to of the business developed be the

past, still provide fact really we oil a low we're incremental as low COX access the enhanced time X come continue part forward first the implementation business And key the minor decline low beyond will provide see some probably expand we will offset organic go help in will production decline. closer We carbon But used projects. carbon increases growth to escalation so and to for help net either costs of that and of us about that And Permian of the for to we or COX, cost our as the excited those low as the to having Air strategy. low key improvement the Direct very of within so have significant that to the strategy, resources which of will will us -- and been engine we've first facility the will carbon the to a EOR Capture come a and have we'll our getting recovery [Indiscernible]. business. assets phases online. But part be the for and It's of contributor it that

Operator

come next the Scotiabank. question And go will you. ahead. with from Please Paul Thank Cheng

Paul Cheng

please. Hi, Two questions, good afternoon.

just Vicki, First, curious.

by getting we the having You guys have in so sheets fund someone to But joint venture balance and formed are past flow that prove definitely you. that forward operator you started one in done a very forward, better. and to efficient shape going And feel of value you getting trying Permian, have cash in by job. essentially good the some and the

leverage a talk If not efficiency to some at great funds, your joint gain that guys of asset cash are telling that you pull extract -- really Shell to opportunities together your look technical maybe they're And into there peers, giant going forward like venture. up but going the to to Permian just expertise here. you drive

Vicki Hollub

great always a at do is said that. to you've what opportunities look that think We I idea.

value open way us doing we're For to any our value. ways it, shareholders we matter do create And can for we for just of it's it. not look create to that how a you

to we've can with a team the additional of successful with proud synergies the of think our utilize and I so has JV Delaware -- us. Basin we're -- the look and Ecopetrol Basin ways part for Midland on continue the what good is we partnering very to for to to forces there join evaluation minum where because part, been our others find it JVs really execution idea the We actually so doing teams. may am accelerate And and at obtain and I in

they it's blown that said, day-to-day; that Jeff done steady with at work to improve. is not away how can't reiterate the continuing 've just As they've us I enough

frac the evaluate, now and first envelope how where work on surface beyond to reservoirs, they're -- know the in Shell complete. land then data subsurface what exactly pushing ever to how to and to Jeff and expected how and technology analytics, and the As to to the model to the do in goes how production the play see really mentioned, model Shell I

have we set so talk not ago months capital of our the why I progressive. future, that it we'd guys continue this amazing. work XX are even with part back the this been the leading any it's kind of capital the you, I to You we to X.X expect say And of year team. because the proud about year, combine this sustaining Thank would looked and and predicted X am kind The fact this years has where do that of again. we'd technology drilling it it of completion don't that you. happening some and edge last I other predicted records. could in that today. -- I'll are ever to things wouldn't we know year. what envelope, being And ago. that tell group continuing when we to not when That's I've seen hard be really have developing really to be the of say at are progress and didn't we the innovative, our made industry pushing with respect

Paul Cheng

to willing aside for a to it have and the industry. for -- the you that great do like think ego is Just to someone like have whole peers, put seems you that. great I [Indiscernible] ready your be CEO? of best, is Because ego to other is mean, could everyone big because and something their and Vicki, the team that? something actually, talked for their industry any the something but do everyone Yeah, that they

Vicki Hollub

I has discussion been -- think there some

Paul Cheng

is that that assume -- whether Let's

Vicki Hollub

in Yeah. around that than because we we is that. want opening we've names, And has do industry the is mention but that think as want an create discussion want the that something business been some there I I industry, differently to up we to value, to done too don't past.

have do to that. We

industry, thing has that to to attract I with the to said. to what conversations And other As about paradigm we changed it's others the to gas you've industry, needs back an about some happen be maximize there should And us to some going have that for value open done. we today. important I have and there think how open sort to business our had to of exactly are some the investors it, CEOs be and and some And are are assets that. happen this of but not, oil

Jeff Alvarez

I add, ARCO, lot then was one which Permian could built I people If on was exactly was bought think the of we BP, that. Amoco forget those and position Paul. Shell of between our joint a what and Hey, then venture Basically, JVs.

versed those come are that of heart So a that of our the for But in the opportunities. operation. well look Company that benefits from people very is continually in and lot the Permian the

Operator

go Thank question Dingmann comes Neal you. And next from with the Truist. Please, ahead.

Neal Dingmann

follow Vicki I said ones make on this. you sure on to I'm just you want earlier, want the clear

be could about said -- I could de-carbonization wondering something I mentioned the you're thinking am and what you -- between coordination You think like that your just OxyChem said some how how or this there proposal business. occur? quickly could

Vicki Hollub

the design Well, engineering and that's happening Air a the today. OxyChem They is in already Capture key will involved Direct of of fan be part design facility. the

we'll Capture ways believe to they very an more Rob product. in history us in time. developing Air processes and they innovative around new the that But first They only other to to of now, of R&D use mindset, how in that, expertise the And things. it. regard. really the the going Maybe the if in are a PVC of to others kinds We are want use And just in this Carbon Direct had to a and but drive have strength facility. be not that in respect the give part have will FEED with right in Air we do products going a been components this, so the and past We doing Capture also of use but of caustic study, need facility in strategy that's participants him that. and It's Low OxyChem leverage the their have to a we Direct potential, some around that's are the speak don't into potash a the key they're part future, to helping key that. do future, not of to part they could have group the

Neal Dingmann

of Got than second of interest? Got half. more first a is It the function DJ wondering, a slower then with just 'XX just from U.S. you appears it. wondering see of looks second my would it. stable more TILs, your this permitting to -- 'XX for more as, more XX more that in or shift be am indication less activity this going despite slowed half you've on And follow-up just it forward, just first I year XX upstream activity. than I is like am TILs? like or like with half

Jeff Alvarez

what year. heavily think Wells I the on when of online, docs by Yes, seeing it's in early look there at influenced you amount you're brought the we

But docs teams that the frac you influenced. Inventory of pointed and sets If is We're Neil, activity We was brought running That's number. heavily year the Powder, the what's one activity We pretty XXX early online continue last the that we ongoing. pretty into activity constant, That part think influencing keep you the a set about year. that on on Wells, look set heavily out. there, late basically to Wells the flat. we the of relatively set rigs two but is and build activity are but so the in can one this right, at up XX% in DJ consistent, you're the brought core.

Operator

Please, Mariani ahead. KeyBanK. Thank you. question And go from the is with next Leo

Leo Mariani

COX just maybe what more air, terms of type the about pull in more in with about early wanted you wrong, pilot that was in capacity, year. what I'm side on it's bit in Correct you capture jump coming a of out just the but information of of a here. bit whatever be just the to bit I on hoping terms a tons my get able that understanding of little a things I project more to to pilot. to little just or achieve direct like, sometime next air might hoping and it me Permian if have of

Vicki Hollub

that facility which operation technology in the of an Carbon Engineering Carbon pilot Canada. has was owner. by a And we're equity using We're in developed already Engineering,

comes so pilots technologies are build facility pilot. a pilot they designing will scaled the pilots Direct world. those to done the very and experience the the on Air from that largest tons that's capture going already be other and the the And has tons that facility And play can Capture will capture other we're that that million technologies that year. they've that's -- because doing the then where there the be air. intend today Currently, the different done so past. They've captures The this about facility is build largest couple have successfully, into X build we that one built But COX in up also the we'll So X,XXX working, in in OxyChem one basis we of OxyChem Permian of done to per Those year. per this.

we're that a it facility. pilot, the feed doing of together is the and also there's the the in working So working what group to is separate basis it's optimize taking study, upscaling we're on process, on

we we're we We're So the for engineering. at in see how it it not time then as and wasting look innovating works. study actually the and to get build as operation

As we're too. doing that, we're innovating

be, to the when study. think, expect not into the simultaneous it it's processes involved when in we than get that going had FEED been we would've to both OxyChem better We product certainly operation, a innovation you

Leo Mariani

can can additionally, then Okay. just first fund where sheet. you a there? It's And are us creative off-balance you I financing, there was little maybe -- on that maybe to timeline you on get is a place? maybe plan to project us rough Or in think And there more bit update remind definitely helpful. that a looking the

Vicki Hollub

end year. our the we we feed done it investment that Airlines Direct have or the we be XXXX will the begin to of others next right into hope certainly to facility. doing by up a The then a of we part bring they is early it be XXXX. should online and with of be we want announced the so that we're have process It to be the though talking of of Capture around beginning and end running who what will this. XXXX. And should toward be final get construction About part XXXX to has study, or XXXX, decision by multiple have ensure partners of in part United opportunities been funding for Air and should

they'll will are from facility. not itself. be There carbon to it, investment the from the of in COX They the fuel fuel multiple provided it. -- they'll that to There's the low is So capital committing needed be by the taking contributing an offtake build the be one that's captured are the to an only to make to facility air. ways but fund

taking COX is to to Second commit credits. the

the that Third from oil into goes enhanced recovery. is that's to oil the COX commit to purchasing generated

we're -- We next early do it's to several we have ways parties. on finalized there's have to that a facility how and that this the of financing haven't happen. But interest making -- so of a we'll We more should in lot how do we're through working by and of that. if information talking year. We're going now interested a lot definitely

the and the a needs in U.S. Air and world, happen successfully to big For happen for way. Direct Capture

And to it. it want generating that in results get participate interest be contributing that's so and the the parties to the of then to in

Operator

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

Vicki Hollub

you thank for today. our questions and I then for joining want all call to just your

Operator

thank concluded. for The presentation. Thank has conference And today's now you you. attending

now may You disconnect.