The paragraph is an introduction to Occidental's Fourth Quarter 2024 Earnings Conference Call. Jordan Tanner, the Vice President of Investor Relations, introduces key executives participating in the call, including Vicki Hollub, the CEO. The presentation will cover Occidental's financial and operational achievements in 2024, highlighting strategic efforts to maximize value and deliver sustainable returns. The company focused on enhancing its portfolio with high-return assets and meeting cash flow and deleveraging targets while prioritizing safe and reliable operations. Vicki Hollub will discuss these achievements and strategic advancements during the call.

In 2024, Occidental Petroleum Corporation excelled financially and operationally, generating $4.9 billion in free cash flow and achieving debt reduction targets ahead of schedule. The company paid $800 million in dividends and maintained a focus on improving its balance sheet while investing in future growth. Capital expenditures were on the lower end of guidance at $6.8 billion, with significant achievements in operational efficiency leading to record oil and coffee production. U.S. production hit all-time highs due to performance in key basins. Operating expenses and costs were notably reduced, and reserves were increased, reaching historic levels, underscoring the company's long-term sustainability.

The paragraph discusses the company's strong performance in 2024, highlighting a reserves replacement ratio of 230% and improvements in lower-cost new reserves. The company's capital expenditures are lower than depreciation costs, boosting earnings per barrel and share. US onshore inventory has improved, with more economically viable well locations and a reduced average break-even. The OxyChem and midstream segments outperformed, delivering significant pre-tax income and successful gas marketing optimizations. Strategic advancements include acquiring Crown for increased Midland Basin scale and developing DAC technology in British Columbia, aimed at creating long-term value and supporting US energy security.

The paragraph discusses the use of DAC's CO2 for enhanced oil recovery and sequestration, alongside efforts to secure carbon removal credits to reduce costs and advance technology. Several foundational carbon removal agreements were signed, and DAC research and development accelerated through collaboration between carbon engineering and Occidental Petroleum teams. The development of DAC facilities at the South Texas hub received US Department of Energy funding. The paragraph also highlights strong financial and operational performance in the fourth quarter, with $1.4 billion in free cash flow and all business segments outperforming expectations. Notable achievements include the OxyChem business generating $280 million in adjusted income, successful midstream business optimization, and a record high for US quarterly oil and gas production. The company aims to continue this momentum into 2025, prioritizing shareholder value and balance sheet strength.

The company is focused on reducing debt using $1.2 billion from divestitures while increasing dividends by 9%. It aims to balance debt reduction with advancing major projects, such as the Stratos project, set to be operational this year, and the Battleground project, expected to be completed by mid-2026 to enhance cash flow and market position. Additionally, the company emphasizes maintaining a culture of innovation and operational excellence to achieve and exceed its targets.

The paragraph highlights recent developments in Crown Rock acreage operations, emphasizing efforts to increase production, reduce costs, and accelerate returns. It notes expected improvements in market time and well costs, with teams sharing best practices and innovating to enhance efficiency. The company aims to leverage its competitive position in the Midland Basin, identifying potential cost savings through drilling and completion efficiencies. A JV extension with Patrol supports further development. Additionally, the company is pursuing advanced techniques in the Permian to improve resource recovery and conducting advanced seismic work for exploration in its Gulf of America and international portfolios, with a notable seismic acquisition feat in Algeria.

The paragraph outlines the company's strategic initiatives focusing on enhancing value through artificial intelligence and technological advancements. They are utilizing AI in their Gulf of America operations for supply management, asset integrity, and reservoir characterization, and have created an AI center of excellence. In their LCD portfolio, they are advancing direct lithium extraction technology with a JV partner. The 2025 capital plan aims to maximize cash flow by investing in short-cycle, high-return assets, while also advancing mid-cycle projects. They plan to invest $7 to $7.2 billion in their energy and chemicals business and maintain stable oil production of approximately 1.42 million BOE per day. Investments in OxyChem will increase to $900 million, with 2025 marking the peak year of construction at Bell Ground. The spending will decrease in 2026 as the project nears completion, after which the capital will return to maintenance levels.

The paragraph discusses Occidental Petroleum Corporation's 2025 capital allocation strategy, emphasizing a significant shift in spending away from LCD towards continuing the development of Stratos and other projects in South Texas and the Gulf Coast. The capital plan prioritizes flexibility and high-return, short-cycle projects within the US onshore portfolio to adapt to market conditions and support debt reduction and shareholder returns. The financial update reveals a fourth-quarter adjusted profit of $0.80 per diluted share and a reported loss of $0.32, mainly due to increased environmental remediation liabilities from a court ruling that the company is appealing. Despite this, the company exceeded its financial and operational guidance, generating $1.4 billion in free cash flow from higher global production, mitigating lower oil prices.

The article discusses the company's record quarterly production, primarily driven by improved operability and well performance in U.S. basins, particularly the Delaware and Midland. Despite reduced production from offshore and international assets due to weather and other impacts, the 2024 production goals were met with minimal capital expenditure. The company ended the quarter with over $2.1 billion in cash after repaying debt, supported by strong operational performance and capital management. For the year, total capital investment is expected to be between $7.4 billion and $7.6 billion, with a focus on high-return, short-cycle U.S. onshore assets to enhance cash flow and financial flexibility. In 2025, production is expected to grow modestly, with a notable increase in oil volumes.

In 2025, the company anticipates a production decrease in the first quarter due to reduced activity levels, severe weather, and maintenance activities, with an expected recovery in the second half of the year driven by Permian growth. The Permian is projected to boost production by over 15%, while Crown Rock assets are expected to grow by more than 5%. Lower Rockies production is anticipated due to changes in gas processing and divestiture of non-operated interests, although US offshore production is expected to rise. The company aims to achieve a 52% oil cut in 2025. Additionally, OxyChem had a strong operational performance at the end of 2024.

The paragraph discusses OxyChem's financial performance and future outlook. OxyChem's first-quarter income is expected to decline due to a winter storm, an unplanned outage, and increased raw material costs, but these pressures should ease in the second quarter. For the full year, a slight decrease in earnings is anticipated, mainly due to early events and market conditions. In the midstream segment, there was a strong end to the year, exceeding guidance by $104 million due to successful gas marketing in the Permian and higher sulfur prices. However, slightly lower midstream earnings are expected in 2025 as opportunities for gas transportation optimization reduce.

The article discusses the company's financial outlook and strategies. It highlights the benefits expected from improved crude marketing in the Permian and revisions of crude transportation contracts, leading to significant savings. The company anticipates a $200 million benefit this year and $400 million annual savings by 2026. Stratus' startup operations are expected to contribute minimally to midstream guidance initially. A negative working capital change is anticipated due to seasonal expenses and tax payments related to federal disaster relief. The company emphasizes its commitment to debt reduction, having met a $4.5 billion repayment target in 2024 and announcing $1.2 billion in divestitures in the first quarter of 2025 to strengthen its balance sheet and enhance shareholder returns.

In the paragraph, Occidental Petroleum Corporation discusses their financial strategy, stating that proceeds from asset sales will be used to address 2025 debt maturities and reduce future debts. The company is focused on reducing interest payments to enhance their return of capital program. CEO Vicki Hollub highlights that 2024 was a significant year due to strengthened portfolios, significant financial and operational achievements, and notable safety performance by employees. She expresses optimism for 2025, emphasizing their strong asset portfolio and the strategic advantages of their business segments. The company looks forward to bringing Stratos online. The paragraph concludes with an invitation to begin the Q&A session, noting the presence of Richard Jackson and Ken Dillon.

The paragraph is part of a conference call where Arun Jayaram from JPMorgan asks about the Gulf of Mexico outlook for 2025. Vicki Hollub and Ken Dillon respond by highlighting key activities and projections. Ken outlines plans for maintenance and drilling in the Gulf of Mexico, including two platform turnarounds, which are expected to add roughly 16,000 barrels per day. Six wells are slated for drilling, anticipated to contribute between 18,000-22,000 barrels daily. Additional production activities could add 4,000-7,000 barrels per day. Overall, they project total production for the year to be between 141,000 and 150,000 barrels per day, stressing that their equipment uptime is at record levels.

The paragraph discusses upcoming projects and activities for a company, including the Gulf of America 2.0 project and the Horn Mountain 2.0 project, which involves water floods and artificial lift projects. Vicki Hollub mentions a recent extension of the Ecopetrol joint venture in the Midland Basin. Betty Jiang from Barclays inquires about the lower activity levels of the Rockies program for 2025 and beyond, despite flat capital expenditure (CapEx). Richard Jackson begins to respond, ready to address the issues raised.

The paragraph discusses adjustments in production focus, particularly ethane rejection in the first quarter and divestitures. It highlights improved drilling costs and efficiency across assets, notably in the Rockies, which enjoys embedded efficiency. The DJ Basin is undergoing infrastructure development, particularly in a larger area called Bronco, offering numerous low breakeven locations. Spending is deemed value-added despite traded efficiency. The Powder River Basin has yielded strong well results, prompting a planned activity resumption in the second half, presenting competitive opportunities. Additionally, strong progress in debt reduction and non-core asset sales is noted for 2024 and the first quarter.

The paragraph discusses expectations around reaching a fifteen billion dollar net debt target by early 2027, despite commodity price fluctuations. Vicki Hollub expresses confidence in achieving this goal, aided by cash flow operations. Neil Dingmann from Truist Securities asks about projections for 2025, focusing on a forecasted production of around 1.4 million BOE per day and a capital expenditure of 7.5 million. Richard Jackson responds, highlighting operational efficiencies and a twelve percent improvement in drilling and completion costs against 2023, due to enhanced well designs and teamwork, especially in the Midland Basin with Crown Rock.

The paragraph discusses a focus on improving drilling and completion costs by around seven percent in 2025 through increased efficiency and better pad design, which reduces non-productive time. This is expected to enhance production while lowering costs. Neil Dingmann asks about potential international mergers and acquisitions (M&A) given the status of domestic asset transactions. Vicki Hollub responds by emphasizing the value of existing international assets in Algeria and Oman, mentioning opportunities for expansion, development, and exploration in these regions, as well as in Abu Dhabi, highlighting their strategic fit and success so far.

The paragraph discusses the company's plans for international growth, particularly in the Gulf of America, where AI technology is expected to enhance exploration, field development, and water flooding projects. The conversation then shifts to a question from Paul Cheng at Scotiabank regarding the expected increase in the Permian oil cut in 2024-2025. Richard Jackson responds, explaining that the increase is linked to unconventional growth and changes in the mix, particularly with Crownrock's involvement and the differences between the Midland and Delaware Basins. He also mentions the impact of secondary benches, which have been more prevalent in the Delaware position, contributing to better value despite a slightly lower output.

The paragraph discusses the growth and development strategy in the Permian area, focusing on unconventional oil production. It mentions an expected increase in the company's oil cut to 52% by 2025, driven by growth in both the Permian and Gulf of America regions. Richard Jackson highlights that in 2023 there is a 30% increase in secondary benches compared to the previous year, which was 25%. The use of existing facilities for these secondary benches results in lower costs per barrel, enhancing the returns from the development program. Overall, this approach is expected to significantly improve production efficiencies and financial returns.

In this dialogue, the participants discuss investments in new areas, specifically the addition of 140 wells in the Rockies. Roger Read from Wells Fargo inquires about drilling and completion efficiencies, focusing on a reported seven percent decline in well costs and a projected savings of one million dollars per well. Richard Jackson clarifies that the one million dollar saving is specific to Midland Basin activities and stems from collaboration between Crown Rock and the legacy Midland Basin team. This savings was achieved in the fourth quarter and is expected to continue into 2025, benefiting overall operations by optimizing well design and sequencing. Roger confirms his understanding that these efficiencies are integrated into ongoing operations rather than being a standalone goal.

The paragraph discusses the progress and upcoming steps for the Stratus startup, a new large-scale commercial technology project nearing completion. Roger Read and Vicki Hollub inquire about the challenges and milestones during the commissioning process. Ken Dillon explains that the project is 94% complete, with construction almost finished. The startup phase involves the OxyChem team preparing subsystems and processes, starting with water and fan operation, then introducing chemicals like potassium hydroxide and lime to make pellets. These pellets will be processed before CO2 capture begins, marking a significant milestone in the project, although initially in small volumes.

In the article paragraph, the discussion revolves around efforts to reduce operating expenses and increase capacity to optimize outcomes over the next several years. Neil Mehta from Goldman Sachs poses questions regarding the midstream business, particularly focusing on 2025 guidance compared to 2024. Sunil Mathew explains that the guidance includes various factors such as reduced transportation costs due to expiring contracts, expected benefits from new takeaway capacity in the Permian, and improved conditions in crude and gas marketing. Additionally, there are financial impacts from the annual FERC escalation and the sale of units in the previous year, all contributing to the business outlook.

The paragraph discusses potential impacts on income, noting that there will be lower distribution and income compared to the previous year due to factors such as the Stratus startup and ramp-up. Despite this, the midstream team is well-positioned to capture market value, as evidenced by exceeding last year's guidance by six million dollars. Neil Mehta then inquires about the framework for West monetization, considering things like deleveraging targets and tax implications. Vicki Hollub emphasizes evaluating opportunities based on value propositions, including cash flow impacts and tax considerations. John Abbott from Wolfe Research, on behalf of Doug Leggett, asks about Gulf of America operations, particularly regarding sustainable production beyond 2025. Ken Dillon responds, highlighting plans to maintain flat long-term production through ongoing development and exploration projects.

The paragraph discusses the company's involvement in exploration wells, specifically targeting myosin and Wilcox, along with projects in the Gulf of Mexico termed "Gulf of America 2.0." These projects focus on pressure maintenance rather than traditional water floods, aiming for long-term, cost-effective developments with significant potential. Vicki Hollub expresses optimism about these projects contributing to growth in the next three to five years. Additionally, the discussion touches on the company's Durable (DUR) business and production levels, which have slightly declined but have achieved cost efficiency, contributing to reduced operating expenses despite lower capital investment in recent years.

The paragraph discusses a business strategy focused on leveraging operational expenditures and capital efficiencies to improve cash margins. It highlights the potential of CO2 and carbon capture technologies in enhancing energy production and achieving lower-cost barrels with minimal decline. Despite changes in the US administration and uncertainties around infrastructure policies, the company remains committed to its plans. They view CO2 as essential for energy independence and anticipate that advancing technologies will significantly boost oil reserves through enhanced oil recovery, particularly with the aid of the forty-five Q tax credit, which supports CO2 technology development.

The paragraph discusses the importance of developing direct air capture (DAC) technology to remove CO2 from the atmosphere, as it could significantly extend U.S. energy independence. The speaker highlights the support from President Trump and government subsidies for the technology's advancement, emphasizing its necessity and potential for cost reduction. They commend the collaboration between Occidental Petroleum Corporation and Carbon Engineering for their rapid innovation. The speaker mentions engaging with Congress, senators, and cabinet members to promote DAC and believes in achieving cost efficiency sooner than expected. Despite challenges, the strategy for projects like the King Ranch DAC facility remains unchanged. The call concludes with Vicki Hollub expressing gratitude to the participants.

The paragraph indicates the conclusion of a conference, with the operator thanking attendees and inviting them to disconnect.

This summary was generated with AI and may contain some inaccuracies.