Occidental Petroleum (OXY) 5 Nov 192019 Q3 Earnings call transcript

Good morning, and welcome to the Occidental's Third Quarter 2019 Earnings Conference Call. [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. Please go ahead.

Brandon. you, Thank and Third everyone, for in participating Good XXXX thank Conference Petroleum's Quarter Call. Occidental morning, you

call On will the and and President just call and with Hebert, Business International us today are Development Operations; Gas Senior turn Officer; Officer; Dillon, moment, over BJ Burgher, a Vice Oil Financial Strategy, and Chief of to Vicki In Cedric Senior Brown, Vicki. Chief Integrated Vice OxyChem; the Supply. and President Ken I President, Oscar Executive Hollub, President President,

today's a described implied and results statements actual uncertainties As these in our securities of contains other and forward-looking conference more cause or regarding statement cautionary These reminder, call the to on statements or certain differ statements forward-looking are laws. in meaning risks statements may projections subject materially to within fully Slide from the that expressed federal X. those

Our presentation off earnings to Investor and non-GAAP the www.oxy.com. reconciliations the supplemental can our and slides Relations schedules press website at release, conference be call GAAP our downloaded

call turn go please ahead. now Vicki. Vicki, over I'll to the

creativity everyone. employees Jeff, at updating acquisition pleased organization August and plans good our structure the I'd an on team-based and of across morning, thank closing our I'm call combined hard results. with you, Thank to Anadarko to welcome on the to like capital spending X. who and first earnings collaboration, are and our you since development safety, work implementing our emphasis

for stage to full we the Our our synergies integration can and value early transaction working of business team capture so shareholders. this potential capture our is at an with units deliver

to OpEx realize day process, more $X we which synergies annual on I'll few in the capital through our more become work minutes. and a integration confident in we detail billion, provide of overhead every fully ability As

Oxy changes Anadarko know our completion statements a financial include to who third you due the acquisition number see well, mid-quarter. of you'll quarter of the those For of

WES quarter full balance as for for the as is consolidated consolidated Anadarko reflects XX. capture a as including financial and flow WES September now WES results legacy cash our of days. a and segment, Oxy well statements income our as XX and sheet include in Our results results operating consolidated Legacy company, fourth only statements

For shareholders, in schedule financial out our provided operational transparency release, Oxy on we basis. have information for our a a key earnings from and WES and stand-alone breaking

not not our include of a line of quarter understand Anadarko financial reconcile the all for quarter, the we Legacy DD&A, this affected results, interest. do items was tax statements and and acquisition able full As that example, Street WES to consensus by

assets in Midstream Going X. of low-carbon to cycle complementary ability success. Slide Oxy's our Upstream, a and to our including us for compete a and full position the world, alignment businesses, Chemical

will additional shareholders. growth, commodity Our The unmatched. short-cycle of assets will cash return a and throughout pay combined to with environments, ability will dividend price sector-leading to cash generate flow flow operate, in to also our leadership we price we where lower is enhanced portfolio cash-flow-generating combined profitable higher environments, in cash our to substantial high-return, utilize which free each with area we facilitate debt reduce free

extensive of advantages. producer acreage net maximize portfolio capital the on us States ample margins DJ, areas. data opportunities our optimizes basis, taking United This Gulf first providing the in largest XXX,XXX with included gas provides modern selectively in acquisition, Oxy into Permian This full half the to positioned square in domestic Oxy XX% River and competitive subsurface a the in and excellence and coupled largest Mexico was Post-acquisition, provides, characterization miles seismic Through acquired the Powder Oxy's diversified oil numerous in is approximately our that oil company basis we BOE deploy especially liquids allow Midstream on unmatched portfolio cycle to intensity. The a in success ahead. seismic that ability are of of diversified of in the development that and our account. basis, is execution already us will position when for we with leaseholder cash a U.S. years a Oxy's a XD Oxy known on capital the advantaged the advantages now inventory. XXXX. combined our increase for, way the ensures that core Permian,

Upstream work benefit third-party to WES of operation to Upstream enabling for business As also deconsolidation future. we independent the We're WES, a we integration of operating aligning Oxy's performance WES up evaluating could to result our the competitive be are to Oxy's We're in WES more business. standing and business. continue efforts, both more seamlessly and WES inclusive with in as that alternatives improve

companies. expect that as in value to provides, we retain significant economic recognize future tremendous for value WES However, WES we foreseeable both their a interest we plan to long-term the for drive and

to additional capture, acquisition continue make excellent operational that turn goals. want to achieving progress the we I continue completing quick synergy fully the towards post-acquisition businesses Since our Before deleveraging on Anadarko, and deliver. providing to details our to of results divestiture

$X.X know have XXXX front, months. we closed the end quarter, net move divested of net the divestitures reducing on proud I being Plains the May billion debt sale forward billion. top make since look additional that do that Upon XXXX, from our $XX as have essentially our deleveraging announcement the have last our towards third debt made very interest the to we billion our of to closed eliminated will proceeds toward the and maturities. proceeds of our applied divestitures of our lower to LNG I'm for progress the of already to and divestiture Mozambique million more stake contracted few have the forward $XX completion we our reached teams able taxes. We and the of goal. During $XXX we for of We over goal end

Basin is strong third Oxy proceeding capture the without results. from core operational the are results value drilling less efforts X% evident We and top than Delaware business, basin, away our exceptionally focus the for XX continues lower best to shifting wells Our proppant in wells from peers, well using XXX quarter deliver the than in integration wells. which our which while having cost delivered this accomplished total of less in us. the of

We also using future. and designed our the to developments with cycle well now we that approach cycle appropriate expect results a full with in life our spacing deliver optimal --

Anadarko While the all Gulf a we monthly businesses to perform set continue asset highlight for Since production the us, records Permian single day is in well. of as tend or resources it stay of been growth Al the Permian Anadarko and acquisition, have during Anadarko close Hosn Oxy even of our on to DJ, superior for results quality both process. former as and they expertise the the legacy This this assets. integration employees delivering laser-focused and Mexico, both Oxy the demonstrates of and

the of as all record. integration, teams for operational more our our even outstanding I'm of excellence proud maintained safety I have As am during they pleased with

to ways be Our our will teams is operating improve safely as us. performance value are further continuing safety to for for to a look and core continue

generate to to results, us success shareholders third deliver quarter, enhances value our excess $XXX shareholders. return shareholders. cash ability cycle In part cash increased and Our returned to our to to excess a capture, reduce we approximately for ability with on combined to to and free flow full consistent capital million the positions our industry-leading Returning a operational is of fully debt DNA. Oxy's

potential X. to the free to Slide XXXX many is new the the with our the had discuss to plan past high. of thankful Going months I'm flow cash shareholders have opportunity engage Interest to over our Oxy. in of few capital

do release budget details capital typically XXXX earnings our year able call, we plan our this capital until provide many we're our fourth not quarter full While morning. to of

billion budget combined company of production of from and represents expected will billion to XXXX capital billion growth an $X.X approximate capital XXXX deliver budgets. annual Anadarko's of Oxy's $X.X $X.X X%. reduction This Our total

target our $X $X.X communicated XX% growth approximately billion, we company-wide spending annual capital to stated When also X%. we production that would from by reduced of synergy our lowering be billion, annual

will that and than greater production touch growth XXXX. by I'll capital free We which have efficiency, anticipate gone of spending further industry-leading We cash combination enhanced capital on this the our for flow, generate lower shortly.

on level grow to other XXXX. a areas driven or be at compared while growth expect resources, the flat will production be to company rate from production reduced we Permian by XXXX

gross Permian expect to plan Resources approximately grow and X for operated in the We XX the new rigs. X production rigs. in JV. X In rigs three to and net represents specific The our X X% rough breakout operating Mexico; to in Texas Midland in by X Delaware; XXXX, approximately rigs DJ, Legacy Anadarko, Basin X is areas

XX% our base in gas oil larger shelf As of decline portion to a increase rate to production we Permian our production, resources gas and expect total oil XXXX. and becomes

$XX we in months, program we levels. the our However, is Similar base At return. can capital short-cycle generate WTI, to decline flexible if of X growth moderated dominated not cycle. approximately program future investments. to given capital rate expect our throughout do reduce a to continue XXXX, Oxy years to rate than commodity rate. by XXXX remains in our spending double-digit our XXXX necessary, sustaining less would And increase

we be know that XXXX, investors. important discipline will to continue capital Looking past to

growth our we intent as Our growing free average portfolio the our in is at cap with vast production an opportunities flow. annual to X% balance of cash

$X.X annually should XXXX with production in Our X% capital a enable of in grow billion. planned activity to us budget XXXX by

capital Africa. budget as our As capital for intact Oxy track always, combined discipline, $X.X as to billion, we of remain XXXX, spend at is within on excluding

are lower the today opportunity been our years as the deeper time by during combined by Through Since enhanced the we closed, and companies, any in the strength portfolio, million DJ we've Applying opportunities we into well these Oxy/Anadarko, the our the costs acquisition us. dive X excited across which last initiatives our to the to a as of in and had have approximately specific of development XXX in front initiatives about per into company combined, well at that's take identified Texas well incorporate Delaware capital will $XXX,XXX plan we've per plans. Basin. $X.X synergy

improve which drilling of are trajectory drill reduces completions, and times and drilling utilizing dynamics development concepts and the bid In the wellbore, we implementing costs. efficient Oxy to

been we expect completed outstanding, or and execute productivity to extremely realize all in our Texas of rates has full teams about identify footage and technical savings targets. XX%. work and to confident the by well The the day to improve our ability improve I'm drilling per example, Delaware For synergy drilled to initiatives our in

bottom-up synergies per X% provide counts achieve production completion we a annual view XX, XXXX estimated in million growth of of drilling of $XXX savings XXXX. well Slide the based net to expected and on and On well

in synergies, improve. This the to Permian and XX, continue other measure expected capabilities competitive million realizing addition operational truly On to $XXX Oxy's Slide from often in in best-in-class excellence apart capital to sets intensity underappreciated operators. is advantage capital Oxy's of

As X,XXX of capital total is net annual production. intensity defined required a capital average as per annual day the reminder, barrels for net ledge

in synergies capital growth, Fully better top capturing driving for will with deliver We've and will capital. substantially overall growth been the and time billion capital newly efficient faster years, in Permian to Oxy X% $X.X market efficiency a we and our capital through multiple intensity to contribute of our in our portfolio. intensity capital of production XXXX performer combined wedge well expected to resource improving performance enabling improve

intensity continued expect legacy improvements to acreage. Delaware the from along originate in Anadarko with Oxy improvement We acreage, legacy largest from

and intensity existing capital infrastructure Basin results implementing applying of the facilities limited Oxy's our acreage our reduce improve legacy time-to-market of grading from reuse venture and inventory efficient Our in well Midland joint EcoPetrol. subsurface in characterization to our improvements the SIMOPS operations as high planning, costs unmatched as to inference with Permian advanced and well through reflects significant

deceleration is the capital by in intensity improvement spending. XXXX, in In aided capital

annual million in grows Moving of XXs production maintain growth is X%. our -- into Permian when company we Resources XXXX, to will increased support from range, $XX even intensity production the low

While applies make Permian all segments. our Resources continue to across business, efficiency to notable this we business and gains productivity example

earnings next will highlight some We quarter's of areas in other in call. the our initiatives exciting

assets out reducing carving and derived be in workforce the real our XX, to related Slide will to will from of estate meet costs. be divested that needs our company overhead current costs synergies other and On aligning

In driven terms facilities continue costs reducing of at Permian investments, our the to including decade, be long-term, infrastructure. lowest OpEx, high-return they've in and a operating by cash been

the with footprint Permian. We expect large in especially continue, to trend this our

to as underway On we the promised. had mentioned capture fully I synergies Slide initiatives XX, earlier, many have

both You tracker, overhead can energy in capital made on adding synergies. already see we've our progress and

not linear, in to clearly our While will continue investors we our are updates progress progress realizing provide synergies be able so each may quarter. see to

on number the X- basis, of a Delaware delivered Permian the and drive highest significant to improvements. Basin continue top We productivity Turning wells Resources. we in and again XX-month cumulative to

This XX.X XXX stages the record to in and XX,XXX-foot provider for We milestones, new main completed our a Permian. record team. X in by only record a including a days month lateral also drilled and Oxy frac one is also reach continued completion frac for in

to employees my frac X went recordable Following over work hours, comment draw and to contractors. like Mexico a a year This is in single an our earlier entire conducting which on achievement. new incident an for attention completions million safety, OSHA high-pressure team, without includes That operations remarkable incident. without I'd

savings. in Basin, of and than development resulting slide while acreage Delaware wait less acreage with expertise, using unlock deliver enables next to the potential the combined unique approach Anadarko's X X/X nearly one of The our capital wells. can't key factors continuously subsurface including reinforces wells we wells us Oxy's development in subsurface Anadarko's using that significant combined supports our to proppant portfolio the the the and expertise, in The best more prolific, best practices. acquired record is top wells top others,

I'll hand you walk our Cedric, over guidance. and the now call financial through who will results updated to

Vicki. Thanks,

capital combined to of established capital as flow continuing to dividend. Africa. $X.X while capital-efficient protecting we returned full shareholders established and priority, in our As and our will combined capital return our In to to discipline grow $XXX XXXX capital million third fully and our we on remain track a remains shareholders. excluding manner returning for the safety optimize unchanged. a forward a free through a to to the spend of We budget commitment shareholders we us company, maintaining cash of as significant quarter, our forma our cash position to an dividend, Furthermore, production have we top to budget we move look within forward pro have -- we that expect billion, year capital dividend

of earnings third our results due $XXX Anadarko and with and reported acquisition, a per per oil the charges. into announced and share account taking we share. Continuing to adjusted related gas between of results, quarter adjusted is mid-quarter $X.XX The reported acquisition the million impairment $X.XX of diluted completion the costs loss of and $XXX difference million mainly onetime of to diluted the

prior With X.X prices. Total reported segments, international million quarter, day oil XXX,XXX decreased realized respect BOEs in continuing due third adjusted to lower to to and from from mainly and the income production included BOEs day. gas quarter our production compared of lower per oil legacy quarter the of operations third contributions Anadarko operations per

and of well, our production with of As upstream since resources businesses set Permian all Oxy's legacy monthly of performing the single acquisition. Vicki operations are average production been records having mentioned, several U.S. with exceeded XXX,XXX exceptionally of XXX,XXX or completion guidance per exceeded BOEs day BOEs and per for to of the Permian execution. XXX,XXX due to Anadarko's U.S. improved results Gulf BOEs Mexico. best-in-class day day to operability businesses Actual in legacy well of per XXX,XXX due production DJ, day guidance

third in day presentation, we investors and a have actual with this of down of reported by production the per appendix million pro company the reconciling BOEs included table total for quarter, assist operating production forma To X.X area. breaking

stronger surpassed of ethylene third offset by which million quarter vinyl higher sales with Higher margins across OxyChem costs costs, increased cracker lines. coming income production ethylene $XXX industry-wide ethylene from product the guidance downtime. by under were were most despite pressure driven for and

differential was Midland reported quarter, the margins. to business $X.XX. Compared largely differential quarter million decrease to in of narrowing of Marketing third excluding to Midland interest MEH of Plains $XXX the Midstream $XXX by other the second a and our the impacting earnings by Marketing the Our driven driven approximately of gain income sale adjusted million, on MEH

impacts differential XX% realized an impact compresses the business. will the the As currently, to Upstream benefit income, and be of Marketing as income

El XXXX. in international in on For improvements in contracts and fourth provided The guidance have reflects Qatar as are the Shargi going the and Dome Resources the expect early outlook. to and continuous company spend October. we results termination our guidance Fourth quarter, operational making our we moderating are into slow of Idd growth basis quarter capital combined North have we begun South evident a Permian

compared an XX,XXX fourth the second quarter call fourth and of forma Anadarko implied quarter MBOEs presentation. the production XXXX guidance guidance quarter in updated guidance for year full appendix guidance earnings this to in Our legacy revised included to for Oxy's day a provided operations represents increase we in table per the early Pro August. released production in is

the year case chloro subject factors quarter each year. years, market vinyls in previous typically chloro vinyls fourth to quarter fourth is full -- not our been guidance As as is the of has as representative for outlook in seasonal the Oxychem

the quarter, In to as as from asset and applied from sale flow interest down proceeds $X.X third and debt. Ghana, pay billion our the Plains Algeria cash in Mozambique we free of well

We have will maturities proceeds apply now from future to retire beyond. for retired debt XXXX in sales all and due of debt our XXXX and

divestiture on target to $XX we I both we forward and As flow to of billion progress progress asset to of free to cash our these debt-reduction updates see in on debt deleveraging. Slide apply fronts. will our can reduction, the net on investors divestiture taxes look that $XX proceeds so meeting shown in tracker XX billion and our update to continuing provide continue of

to Vicki. I will now turn the call back over

you, Cedric. Thank

progress As anthropogenic is in the including for fronts, updates the COX the making carbon sequestration. our Permian and improvement In Carbon the of business purpose Oxy Low or utilization provide a emissions. leader industry, must our reducing supplying and quarters, will we coming Ventures all to drive man-made on on

gas oil, of Low we leading Ventures is produce lowest also Carbon barrel are the to greenhouse reducing carbon While emissions. strategy our

eliminate Permian methane into transporting via Hub. tons basis, and annualized an miles Aventine miles our emissions we for doing X,XXX metric Logistics million working which infrastructure equivalent to rail supplies so monitoring reductions. of routine truck COX the X.X is are per through reducing by year, driven reduced We by to On flaring,

Also The online state latest in greenhouse a in the publicly in we the Texas supports this quarter, operations. in is a available Basin, gas oil emission in directly shows Oxy leader Permian. that brought gas the the of emissions on like-for-like largest basis, solar Permian facility data that and intensity

of reducing While working on not to where be with peers to and we across we assets. emissions ahead all satisfied are of committed on pleased this we are, are we're metric, continue our

to means each area energy an innovative operate. Oxy, we in that Slide leader maintaining being To and leadership Going sustainable XX.

translate Our value and technical excellence, teams the to are near of The cash application return a used dividend execution, shareholders operations and and and the cash to higher-margin all technology, flow into relentlessly will balance focused in through make our growth. of operator capital will innovation on us lower-cost share be a through future. term advanced breakthrough and free creation helped cash delever to more of to the which applied repurchases

best-in-class world-class which the do an planning Sustainability assets. also means unmatched with for lens the portfolio we through future, operator of of a

lower of of that diversity a world. recovery portfolio includes cycle and diverse enhanced strategy into low-carbon from us our and technical sustainability include our operations options. the assets decades applied The a short-to-medium high-return, opportunities strengthen our excellence tertiary The multiple other our secondary focused will operate and primary, strategy of to Our in development and value our set combination ensure portfolio footprint profitably strengthens success us proposition vast companies. and further will to to carbon enable sets future. long apart This over energy of a

In and stress potential look for operationally. and is our closing, shareholders Oxy. can achieve to combined how newly both forward There now much for financially we terms what to of in has company our I to much want

the our also questions, want open and to And do we're a while to record for for team we'll lining production. I up DJ achieving now shout-out Basin it questions, give up

DJ team operational so the they're XXX,XXX almost the to here excited Our day they're and have commitment excellence. just and Basin doing making achieved about we're barrels a recently, they what improvements

first we'll question. to move the Now

[Operator Instructions].

Devin comes question from Stanley. first with Our McDermott Morgan

and synergy my far targets, made seems you've the post on good integration. so the first So really is some progress question it like

or the It to we're close, few seems items of lot detail get on and improvement Oxy. clear My into additional any, like guidance? synergies as upside might you Permian you difference expectations specific seen now or drive if of And and overall efficiency was much, that in the the capital Anadarko, and to a is question part deal some that -- the opportunities might on baked that the of synergy a you wells legacy you is that, drivers what months your different post how And the deal, specifically, of over hoping targets. identified what be think targets also into address could than the definitely identified you've I the going XXXX is I helpful. of incremental those that productivity more between if into in time? some

what that and there could significantly baked combination synergy And subsurface our opportunity we Basin, had see. our we that we a into were that about, that do to our things so lower the through expertise targets the cost we and we knew had things knew Well, Permian drilling the to characterization. the the of data in we

So we've at that. looked

Permian can Our teams very, That's that. very synergies outlined. have there. confident that the those why we achieve resources know We of delved we've that we're into

what they knew with what completions. guys are their are almost Oxy we they business. production barrels in record operational there achieved that a completions have can couple applied drilling we dynamics, drilling last the still and the we've and DJ, that is completing, believe They doing think our operationally, job characterization job, which a weeks. based differently, here practices doing to from is on with that we've doing But the great they're We the that from on improve of XXX,XXX are say resources really great bringing subsurface I a and also perspective, team of drilling and their would those an only They're to respect -- to some with incredibly In work best perspective. impressed we up not advanced. been started the how

had what value exciting related teams, I'm add, we've coming really the do really that So important about that to script expertise the seismic that's in my the chance for but what I we're identified synergies. counted a wanted more to we bringing not really we the we deliver would. to we we news even little a believe excited is be those The us. we had need we bit deliver that had is a going initially are going best could expected little to on tell One, -- now we their X it's practices what some But I to the have that is together, of us. that when bit interpretation. shale to said to we that excited you Anadarko's than know quantify that, that's to with because we table is And roll more we it What that work ones are ones they ensure that cushion now what up out. to already first about we're and did can

are doing be they're things impressive, and to international of applying some very, the operations. very of Some our to there that going we're

And on the operation. Great. Permian Got clarify to it. just

as plan, we best productivity practices, as of program. up we show development techniques we move subsurface can those through Anadarko beyond? the implement see XXXX of characterization, the and some drilling So into how about think improvements When might quickly Oxy the XXXX some you

because guys starting work those have we pretty that what are is that be that's to found going the Well, immediate now. work, subsurface to

perspective, that happening a completion will right away. start from So cost

improvements will impact recovery the we you'll drilling have effectively. standpoint per from more see and well, big of improved acreage results Anadarko way. proppant efficiency but That next the manage Now the to start frac a as a in year, the a that, using on we'll see production less start that to happening in complete still bigger

it by dynamics, used it make drilling even that Oxy get takes The a can everywhere achieve out, a first while it always to that, teams hold. quarter we we happen and bit we've to they the for There's start XXXX curve process start for so it work little rolled taking that internally, that learning to to do the will of of a but it expect them. with little

later I Permian, And mid start completions the to you'll improved along of XXXX, efficiencies in with so of by drilling the by seeing, the some part believe, midyear. the

So quite and end by drilling of improved. confident that the the much year, program that, I'm completion will that be

that's sale I targets. progress have forward I asset on seeing on and more some and separate one of to just leverage the reduction look Excellent. a topic, the And there.

lower So there. of you've could was comment far. so $XX thinking if additional on wondering billion you overall $XX the on opportunities achieved for is divestitures, end I mean, or to these target the I the your what the backdrop billion market just

some as there. And then I large you and understand of, playing be deconsolidation the it but with of comment, overall mentioned, you potentially that financials of how might debt additional color see containing hard deconsolidating or on the to but intention out any WES retaining a economic ownership

Okay. because we really employees internal up that focused. understand the you I be it is an must help save don't the every save we to that become have dollar we highest that is efficient that to tell to a company walk you able to as and and as they as priority wouldn't people many there we believe every very thing can that organization or are very sales we very because We're the target. get intense that to can lower done want critically dollars have flow be, get our cash we from debt us. are important making that sales our the that we asset we the asset of ensuring one can as I'll say just for to down. talk That's entire We're throughout sure that quickly getting think as day. We wouldn't about on we either is because be, debt we

made And we at our do achieve to plan $XX, flow promise as out and that X a shareholders. when in rolled years, we just had that we the plan to to cash first neutrality

to all and say we taking know, what debt this X of we determined focused to deliver and intensity schedule, we'll we that incredibly achieved deliver. As because months to results We're ahead that you that same deliver did teams and reduction. are our

But both on So very the we the hope divestitures that aggressively can I that not the balancing doing we're one is creativity things that we feel way it, with, we're said, that approaching only not intently. And asset we're assets, those. of but compromising all we've of and approaching asset you and we're the in that thus confident those far. that sales we've value so not that approached I the from get are with the shown intensity

some can none will those some we So make be talk we things -- There to of ability will creativity. we expect, happen. you but it our about be compromise not there will or that might

appreciate recognizing you I So that.

it WES, hand to thinking bit going to about tell that. Oscar respect a little how more we're With over you to I'm to about

as And the but on operations we're with third-party right integration really improve operations, not and competitive, Sure. made of the now helping become WES more operations. comments, Oxy's earlier obviously, only and with supporter focused upstream Vicki

all accounting ongoing. been the deconsolidation with So of We've that's on auditors our to focus working WES.

interest work some too really can ownership quickly. much there's So WES. That changed that we our we to in pretty do, do but not think

going we're both of retain Vicki in but as we a stake tied substantial ownership, the their to in also, so terms said, as obviously, have largest customer And forward. together option WES economically

we fine, So future. just some that near all news hope in on and the that's to have progressing

really They're really focused I volumes, the the really third-party a I'm WES. that. working about and Permian. being the midstream -- and and on to part operationally competitor at other strong picking management add improving will they're said on about that's they're in operations to new why I excited up efficiencies businesses focused, team very

Our from Energy. question with next Simmons Ryan Todd comes

if in your And large plus it demonstrate metrics? of that's to program you an sort price the deleveraging follow-up. as checkpoints hitting XXXX? the Maybe on renormalize see case, in terms in to a the in mode? Is fair of XXXX XXXX is things Great. to high you the and of commodity effort not? characterize what staying would to to the belt-tightening dividend outlook kind versus a What At cuts have priorities checkpoint have normalization certain would to to level, as to of see business? again Or normalize debt

thank Todd, you.

question for the You just answered me.

we just XXXX is debt from an we've at what beyond more to how but synergies the it that, are for and the standpoint. normal. our achieved trying get to goes achieved look respect really need look, what back and would with closer to efficiency you how when evaluate oil thank to teams and on also What get So really to prices we've performing reduction well we

All of buybacks. enable believe to also over considered us is we to the is is through cash our be as X% that, go wanted what meaningfully that What at we right more reality have right XXXX but not to only the same to growth be able to our toward will to, shareholders again, those the grow return time, percentage at start time, and be dividend factors people know we we because move X% the to the to, away. is don't

Okay. we there And place, on the leverage until things probably of to anything looking is that kind this to you're get side, at say tight. we'll keep

big those, met targets, if in internal say then a we and would do haven't role that what we have in we XXXX. I would that play aggressive

And from we to et case, assets, will as mean, a point see everything of multi-year with of do a will the a ex we $X.X held kind the XXXX billion Permian a return follow-up Permian? think should to of that's growth? growth of majority from other largely on Or the Rockies, held EOR, under the should these Permian Resources? we I coming outside flat? think of cetera, resources XXXX, does Permian? capital just outside go the incremental that resources being guess Or growth of being I view, Permian plan. some as Okay. all the on production view And if roughly normalization about maybe the to of flat in back

like we them can with to DJ let have And of those believe we Permian. Dhabi, internally both beat for they have do our we Mexico. Powder River, teams for What Gulf compete and compete is believe -- the we projects projects, that probably Oman, that X of and actually, Abu to capital about submitting by in X -- to capital, the years, some and Colombia, the in

almost the the invest in the that performance dollars everything the returns that we or the from have digits our $XX is margins at opportunity now we double see data to returns, and we -- above. Looking at and from that see,

what is -- the this this of today. portfolio have so have And -- value we we is tremendous this

of We have lots options.

maybe have dollars. enough have what other of by Mexico opportunity the would the certainly, they And teams ultimately, all their projects would flexibility. and and competitive potentially growing in today. the environment of in make is have all the lots areas, of have the to projects inventory we And River. to the just that get now, But it Powder do their areas We to see be grow because they Gulf our except XXXX, to way $X.X have I a of essentially, billion

with Scotiabank. Our comes next Paul from question Cheng

rate. today the from it's why Vicki, or below. of to size that Can X% growth -- looks standpoint, mean, the company, be I elaborate you and your you growth going earlier, is demand like X%? or X% wide given the said long-term

X% you I think of market instead actually grow will is more the if be at happy X%.

deciding rate commodity growth better It we're play to the average always me it a on X% that into And going come would what to is time. what rate be would average over -- growth be. a for prices our we're -- say way I when

we at So would commodity those of times because lower weaker prices in demand, a rate. when grow

So we're adjust. going to

where again. be we We'll from that we'll efficiencies, I a chart we'll certain those you to as we start into those where that And start potentially cap, would that going capped. scenario metrics And providing would we and really X% account price the depends a forward. delever above one and time, that from think to at oil growth which scenario to our price showed taking looking different at the then same grow are we a showed grow have on standpoint. that leverage But a back commodity opportunities get to prices, it at oil

what -- the it's and the value most really end a of to run then at is put the to shareholders say most what variables trying calculation. it's the scenarios, in delivers we'll day, all various the -- we is And and that I once do. model the the our we creates value return I'm is guess, And whatever

increasing grow outlook prices. and there's the correspondingly, oil at given is the burn think But just probably long-term demand cents journalists, the that notion look the burn a today of in that concern the one number easy my to X%, The it way at the longer-term and is two on X saying investors we commodity that I about bushes. hand that most

position, how question, the in how land? of percent your on your is your quick one just And production in federal land Permian, much is land? of second today federal much The the

So of have federal is in the Permian can't what remember overall. a Resources we total percentage business, very low lands. I

percentage overall about I our think X%. is

this hand got Let to me Jeff. numbers. those He's

Yes.

domestically, half of of X but that XX acres, offshore. is million that So federal, of million our is

X%. it's there. look than where So talk the approximately the if acres if is to then federal. DJ, X onshore, about Permian, the federal want Delaware down at is to the Permian. on Basin continue if if Delaware across about acreage the that people of acres XXX,XXX most, you It's think very go million you And And XX% that's into less land. about Basin, you our the to of small in very, narrow you And

Raymond Pavel James. Our is with from question next Molchanov

your level there, low-carbon thought it's I coming effort the just What On funding the it slide of I to CapEx, out seems breaking small would the planning this I initiatives, if ask. low-carbon allocate you're look at as so XXXX year? awfully to

is other business to ultimately, taking and value in Ventures and my we using anthropogenic capital going of we royalty accomplish team. for because more wherever areas a business accomplish. be the a And is the of way able will production, goal States of standpoint thereby Carbon that is be and we're to cash best the for Carbon shareholders. our is. operate, this in what emissions able the addition be win-win-win the and we COX in for fund the around lower and in Low build Low and excited at a activities in generates and those. look respect to I'm part initiatives business to that to need that, we oil increase a team's that with how Ventures are view, it it going into for I United which Strategic make operate flow -- strategy country a while earnings about And a for to owners, to to so this to Our both to we creating the -- in is view, business this that ultimately, the that in make able also our we this states target to

just a in that about way proprietary to is in bit something that how this team we how the -- we this to that's building it win-win-win, it's a how But at of it's think we're and do -- -- is So intend job terms making and the to happen. point, we doing a great a great want happen.

investments investments. we've some Those direct made new in And been have some technologies.

for is announced -- we've thing we other net COX even lower one cost in, which recovery. that power, use stream, generates the invested a a electricity We and almost and pure still of was have And stream a we've the do of COX atmosphere, and provides in those enhanced oil capture the what we're the build, will largest oil unit evaluating enhanced from largest direct or world the that use in air will that building then take the projects. in can of COX Permian. one we And recovery our in

to a lower-carbon every of of about you using important do time also part all through this sequestration cycle by an the is of it. able you're that, reservoir reason enhanced in the the cycling so you is to generate barrel you get what oil. than using reservoir, use intensity of in so what recovery that sequestration sequesters XX% is But rather And still oil you're it oil

a it are then should to working and from be for the some teams with last -- creative the barrel believe a commercial that, whenever that they've will very happens, recovery oil so COX-enhanced I our that toward And net of in barrel. world, it. ways lower And come because deal world, reservoir the produced got the emission oil

voted will on very be outlined That's Icahn? proposals disagreement on that helpful. your of Do with next these lastly, in changes the charter And slides potentially the year Board the changes settle or at today. that the the then end you

that. of that the not out right do with shareholders, felt he at brought is bringing do just result the we say I'll like is were of part concerns concerns. up reason things out to that's we that we -- brought for anything Mr. to we're a our to it. when address, of settle he one that issue and Board thing him needed looked these and up the to did had, his an What the is the this. Icahn And We're a up

specifically vote done Board as Board well. that ESG, respect more what addresses lower has the committee the it to -- only we But what a for I'm on the I'm with X not meeting, requirement feedback about a to the gone in the more and specifically creation a procedure required percentage but the written responding We -- proposals addresses now even has special consent excited the way shareholders. engages the of And lowering with for Board that to are is also the actually shareholder than that. further the

between that Safety So and and yet Committee. Governance Committee things Health, the what's to Environmental sometimes sort missed going on of ESG is -- the to in the proposal what they're in fall focus it's that was

there that, some with, do struggling we takes where are that. things that who include were the ownership we of So

environmental-related, our on in So specifically not are focused specific Board much has those so safety- not committee. a creating our governance-related puts and this or this committee them are initiatives really clearly that committee that ESG on

going focused is to So this committee be on that.

that shareholders how things And that if the are But need of management getting that the our that engaged mind a committee is for address, they to with do the be feedback we are top this portfolio shareholders, more topics they're other to on our to the ESG side both issues them. now that are there are and know engaged directly. to what more think, ensure side Chairman on the lot wants

a for and us, going a for of change huge And going think been that's positive thing think so it's shareholders to forward. be all I I our

question Singer Sachs. next Goldman Brian Our with from comes

ramp-up deliver Permian to Permian the earlier. growth competing would And talked X% to you the a the degree view Anadarko more can about Oxy with the side? post bit relative a to Anadarko the you properties? that Oxy were But ramp Permian, little the to occur talk versus XXXX more rate, legacy to regards side regards that rig from how back properties split With you you to

acreage be area Southeast terms that think remains, have. in The is in still the second, XB is best the very Mexico not to close priority. really even I believe, of is the And top New we line, the our I legacy believe a going I good. and acreage maybe a Anadarko Subsurface really, excellent.

say probably our second. Draw I would area Barilla Texas So be would that

behind in legacy Anadarko so And acreage. XA New Southeast Mexico, XB in

question Sorry, Or And the process the And the you see what divest past, with you control? to retention were see as regards in that the the that earlier and a would know said and do interest. on to how what you WES, think but is of think deconsolidation, performance interest you scope that Does your XXXX. questions one not potential there. in that on -- to I follow-up portion, still could early that then for do by done then Great. the Is in lot of improvement I of would all Oxy I you success? improve case? on economic there of operationally but a commented thread additional mean the seed one measure be

change what Oscar and structural I for operations a and one standpoint, facilities throw team. think, and between has operations But an I huge one. the the the WES would say I'll the is collaboration guys address the it been, operations field from the upstream to

and did what that ways where some addressing. business, how improve outlined how doing team to decided they they them, Wes today, business early things already approach, and a they're -- interacting we're we is how specific to look to They've doing on think we're their at and have how with connect I [indiscernible] that is efficiencies.

have of deals it's WES the unacceptable of kind were was that us a that and downtime. had, surprised of downtime to by that to level the just One bit we

that address lower. with the that's the have Oxy those management And get downtime That's these barrels specifically have quickest up teams downtime best their the to uptime to perspective -- so to happen. that we'll your -- barrels, ways inexpensive can the it working make team's think infrastructure current now designee, combining of sure start be. with is it, And much just I come the way making change and some easiest that and to with we first the side get seeing are and of

And see of XXXX. that happening Oscar? start So I QX think to you'll in

Sure. It's Oscar.

being WES improve up the deconsolidation really years. about company greatly is then the most So of importantly, to on everything one has an I Vicki to company, aggressive us ultimately, accounting the things that are -- in a over is operations convenience the independent those think with business And company and matured be key and, that business, set this front. its a talking on is ability the all win aligned the for can stand its front, third-party deconsolidation and things on to own,

all So those things align.

and beyond do then we'll business, of the upside, continue stage one support growth its which WES, that again, businesses. specifics to employees its control the is down sell need that is the that Oxy give working has economic is of third-party is next we can can is would Oxy the -- place interest with great terms a in But own still the there some own much interest getting that officers, can our the company up operations, a -- In do on there. related And key to the it's and stand-alone great we're a company complement how auditors. to real the company, the to for opportunities our to with WES to need what

but more come again, on to So today. stand that, we that's where

Our Hall next Energy comes Michael from Heikkinen Advisors. question with

think a think that of the dragged XXXX. more bit on reentering a Resources is XXXX? as of the intensity, Is kind maintain normalized a that the being the XXXX kind in or by Or to, growth-type level, about I'm little ability level? in sustainable of down of that about kind you scenario on of slowdown a business. curious efficiency wanted how or just guess, review you the to Permian intensity provided just capital I disclosures you I level capital

that that considered. lower -- one account, to and how the would when decided Well, took we that and was we about it is a of our impact into XXXX thought we things that capital, was factor

release around. We those And crews, decision have to a you you rig our we point that have XXXX. up back rigs, you of Because go a the at is the down a make make that's the plan bringing back, time give to to and time so level them in getting issue and should they where efficiency down. do would you shut what they we recognize your it that happen. when on-board every question that crews would teams centered were shut Obviously, that, back

We around even happens, it us always it's doing because have we happens. it that irritated robust more though process that that always a know

make and that more the of figure try to out and trying to in a again, start-up, And that -- to efficient. that now to so trying some have that's we involved are idled we're people make -- rig been reboot the

on initially. as so and up steps that the go efficiency see that's on, take too -- toward rigs And of anything much whatever XXXX -- to that, we'll to how the and without Did get bring rig, add have Jeff? that running we try you to looking, Ken loss and we

Yes.

the I low mean plus script, in capital and So expect do the to add, be Michael, your we commented XXs. to point, our in intensity to XXXX Vicki

drive that leadership, from going very, to all flow down as -- our and Permian And spend know time synergies as we with very we I they've goals that if that, level got to you So forward. expect through be go resources through it in definitive there.

So new that is normal. do our think I

the on these that how guess, then coming That's Resources of I And forma, at then the continuing base XXXX in it What's businesses? Permian figures? And exiting on XXXX combined as pro helpful. capital out decline the intensity business, this look guess, looks thread. I you

Yes.

on it I'll cap So you couple quick without doing of applies how analysis give a intensity, decline numbers. curve at

mid- high base the Permian the XXs. for decline Resources So in exit-to-exit to is

use the do is But exponential. So number. we we you capital intensity that's as exit-to-exit calculation, XX%. say, which when decline, real know, the an And about

kind it's straight. It's of concave. So not

just in day. the easy math, about Resources for a XXX,XXX we're you barrels there's about Permian think adding next year, So if wedge

that take XXX,XXX, So if for, intensity capital what Is $XX billion, what you're you the Michael? that's to answer the number. gets million X.X you looking

a exit as XXXX Yes. trying changes It like that, seems guess that also to And to I was the... you I be understand would XXXX. tailwind into how that

improved. it Actually,

kind of I'm that's what was at. to understand how... Yes, I getting just trying

Yes.

point. the So that's

actually As the head have barrels XXXX. new you base improves bigger decline into that base gets coming that on, as high-decline those and of less you

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

Yes, there's to we'd -- another before first, on been like But couple some mental offline to about to it him to of pass Gulf some wanted like I of to for I'd go. things address Mexico. that. we share Ken there've questions

Vicki. Good morning. Thanks,

we're the the The characterization believe, both to excited we period. long with can to modest about subsurface opportunities, far, and over extend a lead being really plateau able people So the assets. cost

in with and it'll stream in QX. on come well KX be latest Our good logs, really

drill million $XXX also exploration year, we to from and plan Next platforms. near-field spend development on wells

team build a see everything potential that. significance, great and that We together come. we so see as as here, and flow a [ph] synergies steady we real working lift Artificial our supports something we're has didn't it's are that seen far and as to long-term on thoughts, we've business into Ghana cash something upside

has environment that U.S. long-term that say Oxy in facing geopolitical are the more closing, our I change, effectively positioning to think and like are Anadarko climate in today. I'd really The to Those industry regulatory for are success. most X lastly, volatility Then us what of positioned Okay. critical address issues we the the acquisition

UAE to building continue that largest as fit assets So the and these the utilize the and shale oil holder execute over the sit they're the fact Ventures COX COX the to United will developing to in strategy largest have our our assets of with enhanced the and vast anyone handler we in that think over that us that with States, now we grow recovery than That we Low amount to perfectly enables the Oman that compatible the shale. play we'll and for -- perfectly, position enhanced a on And else these Carbon the position being of recovery now, shale acreage of intend world, oil get in in we're conventional perfectly into most be and time. with out time. the

I'm So I portfolio. our about think really excited

the the to people the to the cycles maintaining price and structure, go We while have in future sustainability also operate into the continue withstand oil a portfolio, to world. an a with social globally to opportunity license low-carbon

So day. good for and thank questions call. our joining Have for a you all your

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

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