Occidental Petroleum (OXY) 6 May 202020 Q1 Earnings call transcript

Good morning, and welcome to the Occidental's First Quarter 2020 Earnings Conference Call. [Operator Instructions].

I would now like to turn the conference over to Jeff Alvarez, Vice President of Investor Relations. Please go ahead.

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

Peterson, and On Vicki Chief Rob Hollub, call President Vice the with and Executive us Officer; Financial Officer. Chief today are Senior President and

call available statements will our section made that presentation a will slides The Slide on the the cautionary Investors be This morning, statement to this X on we includes refer morning. of website. regarding on forward-looking

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

good In everyone. and period short environment. macro the significant last pushed taken our lowest to Jeff, worldwide Russia, Arabia oil since you, Thank the the created have uncertainty level morning, actions with the call, of as as earnings COVID-XX, in the well prices and spread recent by and Saudi memory

to you your this impacted who've those and this tragic quickly challenging foremost, crisis. this our situation we that evolving be been and first thoughts hope and Oxy passes As families that adapts will remain, safe with through by and COVID-XX, market, and

taking contractors We and and of safety health to operations. the preserve employees precautions to minimal our disruption with extra our are

period. performance the And express achieve my decisive of period. Oxy weather you also I'll we our maximize difficult financial realign will want that advance before actions the I for know in the for as Oxy we a operational so resiliency mid-March, of results has delivered to Since employees couple go recovery success have to series through your all and to I this this goals I to of the taken value of months. despite appreciation any focused stress and past further, the thank you

in half, to our $X.X by XXXX. more an we reductions and overhead In addition additional capital operating budget expense to expect reducing billion of deliver than

long-term conditions when our well differentiators for we are improve. and remain market situated of intact All success

while including will operational to have in superior deliver assets, valuable the we our results, our place in our of safely this reduce the and people leverage quickly ability price and integrity continue activity We preserving environment best assets. to outstanding to low

our the efforts flow Before to position first Rob and to I neutrality welcome Peterson earnings highlight President I of results achieve Senior and named would call. Financial to like in Rob the Chief was Officer. Vice cash quarter to XXXX, our

Before debt becoming CFO, Rob Vice of XXXX, will leadership results, joining in has a positions, minutes, Rob Rob President financial including held In served management key EOR. options. the as as Permian cover Senior serving of our guidance and Oxy OxyChem. few revised President Since

X. deliver lower with that, business environment, survive Slide moving core and the must capital faster first In our to and did spending this market. to in we results quarter, time continuously delivering industry-leading be just To low-cost Now best-in-class a operational operator. results

record in Permian quarter. team set Our over day. twice they did it X,XXX X Basin a feet Midland Basin And drilling by in the

our during team XX horizontal our Delaware a XX,XXX-foot Texas under area per oil reached drilled we lowest days X in record. X horizontal XX,XXX-foot the previous well Silvertip In DJ average drilled a in for faster than days, Basin, cost quarter. foot well Our the over and drilling days the in

different our also businesses. fracked performance We stages These in XX X both record Permian the high major completed with accomplishments all of a frac across providers set in new by day. demonstrate for teams consistently

has deliver Our storage products globe. restrictions valuable our industry differentiator midstream market, more as the provide in the business to to around become second that to continued a faces the quarter flow assurance

to provides favorable in that at few had become obtain barrels price routing optionality us our realizations. which will more While uneconomic shutting extremely we Rob barrels low minutes, realizations, a touch business on in are in midstream with

disrupted and the the any first market quarter have Turning asset severely as for disclose in transactions commodity material to not restrictions additional sales. divestitures. We travel the prices did falling

committed close to divestitures transactions we quickly. While we remain value over time, sacrifice not closing will to

sufficient numerous divestitures in the Rob no confident longer available, from funds will maturities are just have options but we to market which our address condition, highlight. Given raising near-term all debt of

we've Africa on assets our working Anadarko, been Africa. previously of the towards sale and sale acquiring the Since of closed Mozambique South and

current expect free from the we capital with potential flow Over in months, million has have high continue and mutual of to low $XXX flow $XX XXXX. prices. had several Oxy generate And cash we the past cash few generate commodity to of million in operating partners for in Algeria free collaboration. at The assets Algeria Brent country. annual At discuss strip, investing the meetings in Algeria our areas while to April, decided

We at increased of is that environment. recognize current discuss transaction sale Ghana the our risk but this continue to the given asset

Now moving and X Slide to X. Slide

We protect are of our long-term stability integrity the taking financial aggressive and to assets. our action

quickly capital cost activity maximizing meeting, We OPEC's SG&A to reducing our outflows while cash neutrality X flow costs XXXX our targets, cut budget. liquidity. of are beyond achieve cash full and lowering and moved our original failed Vienna and moderating reduce operating to days year synergy by we Within we

exploration SG&A, per run than immediately our overhead operating to SG&A quarter. our reduce on pro basis will consisting our reductions. XXXX, original lowered operating second to of cost in reduction approximately rate expenses additional us Our a billion This BOE double quarterly initiatives an to will operating and $XXX the million has launched get forma This capture operating a and expenses target. from to other overhead and $X.XX teams in synergy which is $X.X $X.X billion more

Our result $X.X a $X.X will of budget capital reductions full in year billion to billion.

number processes, reduced and modified and compensation. replaced have employee we executive operating savings, employees cost these significant a with achieve of contractors To our

we're services. orders such to vendors solutions and further source reduce consolidating utilizing we're for commodities creative leveraging existing replacement and inventory reverse to are equipment, new auctions We as and and

recognition of reduced dropped Oman magnitude activity be must all few Within domestic the The demonstrates by and X speed rigs Colombia. and substantially had and our down a of that weeks, in oversupply of our addressed reaction us. crude we to

approach preserves other we the that us remains compared maintenance We are of to strongly long-term a also our downhole operators. operability by positions integrity changes, these Despite and currently to believe reservoirs. taking minimizing well assets high, disciplined interventions our which

this subsurface reservoirs leadership knowledge of capital without the now across our the Many downturn portfolio. producers, build to well a and barrels have innovatively expertise oil with reservoirs proficiency base management asset established base in existing are become will conventional that is modeling EOR from and applied management the increasingly large will need reservoir our and applying growth our positioned stress to we more established management wedge. same our As to a their the advanced to an important. base, intensity shale inevitably Oxy recover skills operations operator's teams have

know value. liquidity, had to announce of understand was Board its To one to made to common dividend. decision decisions most reduce preserve the a not difficult Those that long-term this that the took who take was stock intention we we protect lightly one that Oxy to but our

We also Board boost the quarter. paid consider dividend which and each to preferred an stock April option common XX our stock position, may our is liquidity

our strengthening forward, sheet. our focus on will Going balance remain

our I will and will options. call management who now results, through hand the debt over financial Rob, walk guidance revised to you

Thanks, Vicki.

Slide to X. Turning

environment, teams are sensitivities. made have partners remainder collaboration our activity full To a while the approaching reducing withdrawn been price we cash decisive cautious guidance flow providers in costs. and in and taking to prolonged have low adverse remarkable. are minimizing cash action year with has prepare and service with progress of for our our impact reduce a outlook XXXX We The

overhead realized billion we captured with of cost XXXX As an billion mentioned, reductions synergies we overhead $X.X base expense year. of have Vicki this are additional operating fully expense expect that and and be fully $X.X and repositioning to our operating

also spending million. to to billion, to of second approximately $XXX our have a reduced which further capital year capital lower $X.X full will We quarter our budget $X.X range billion

dividend the towards reduce are the in shares dividend and second announced taking and we XXXX liquidity, lieu debt quarter. the XXXX cash Looking steps common preserve to our the payment of of common in significant to our preferred Board's in intent maturities, including stock

as term. to excess expect in billion over challenging We in are us close possible and this to divestitures may the not take longer sacrifice as environment much from conditions. as on raising of we estimate to value are It divestitures near prepared raise cash near-term $X in today's intent

evaluating we utilization of include which the utilization pursue continued could such to asset we context, free our accessing capital solutions, maturities. markets. portfolio, maturities, debt of cash near-term divestitures, actively debt capital In also debt reviewing the across of structure management available manage and this our exchanges as options options debt our our and flow, and and liability As divestitures review management extension refinancing we are to continue

retire to redemption of whole trading. debt their to security based option. holders coupon us the are monitoring depending could We X on in to we put coupon Additionally, choose the the XXXX or notes number be currently as million $XXX is exercise in to be that on part may this required October they where of X up

At had credit us credit including April cash, credit of available of letters not $X To our bonds billion issued our unutilized facility. billion have billion liquidity, and we XX, under a any made provided and combination of letters we cash assurance approximately on facility. date, have surety of $X basis through financial and of credit $X a to bilateral

Moving X. to Slide

Turning to financial results. our

$XXX reported billion acquisition, the WES $X.XX we XXXX of positive loss properties that oil between and goodwill loss offset $X.XX of adjusted results mainly acquisition share hedges. due and The announced costs WES. oil In per to partially the financial related on million share. and by the reported and related crude charges, to reported since impairment first quarter including and without consolidating diluted a gain of of net other of first per adjusted is difference a quarter, The first we of Oxy's results quarter closed mark-to-market is to diluted the gas $X.X an

year. billion. to the first anticipate we $XXX Through have acquisition-related initial paid integration in million these to bringing outlays cash of the related approximately in expensed $X.X in had and total, costs XXXX, billion we $XXX including costs an expensing In approximately this expenses, the $X.X first million amount quarter, the quarter,

the of we acquisition-related cash have of $XXX expect to For XXXX, approximately million. costs remainder

XX. Moving to Slide

of expect of for the potential the year and are have provided providing and and second basin uncertainty guidance second the We conditions XXXX quarters for beyond market The differentials wider forecast. are shut-ins quarter flow ranges the have for to we our cash guidance full we previous once return than provided as production to accounting sensitivities stabilize. quarter

In the the to individual due per well are with voluntary which averaging remaining restrictions. quarter, to XX,XXX second day, approximately forecasting X/X of OPEC+ due is economics, we BOE X/X shut-ins

to in expect We per day. peak XX,XXX shut-ins BOE June around

shut-ins guidance Our to account constraints. now for oil and continuing potential includes a gas Algeria flow not guidance operation. related as involuntary does All

turn now the call will I to back Vicki. over

core our reduction, intact. term activity of differentiators long all our remain Despite

advantages now competitive sustainability as better excellence and improve. that the are a market Our portfolio leadership record strategy, combined success when differentiated low-cost for world-class operational of attributes, of conditions into open drive our carbon future. expected track These We're with operator, are position questions. us and for our a low assets to success

[Operator Instructions].

first Paul Our from question with Cheng Scotiabank. comes

focusing know financial parameter COVID-XX, with maybe will But fire. post a on guys it's going-forward have basis? you if I on that some we're Vicki, premature are this putting changed pass point your out it the and event COVID-XX, at too and then how just looking operating

sorry. of Paul? last your I'm was What the part question,

may that, the your potentially That that maybe talking after the longer Like you long-term in have X.Xx. merger, been the targeting in about how ratio guys post before parameter? changed rate think, over and a looking debt-to-EBITDA growth if that operating a you X% financial COVID-XX, and haul, at that we're the have be may that I

With just how through, went we on have that the or parameters? those event through changed passed that may

caused near-term the has a situation out. So what crisis to is had set certainly, us bit than a do focus COVID-XX it's for differently done of we us, for for us what

near is As plans near-term mentioned, our growth as going have a our protect flow, so cash do in forward. for we But the you plan X% But is, preserve cash term. our the and had we to cash. know growth what we'll then it, and generate you priority way

maybe next breakeven be few low-growth for We the the and focus plans But into on a cash going and the recovery, flow year months through end eventually plan. of management. this neutrality, is base have and production our for to

plans. and for just So decline. on what But is long-term we we're we've XXXX base have now, future going to the as growth not abandoned keep for mitigating focus said capital our do our

as know, decline right base we've said, XX%. you our about is As now often

developing performance behind of the the reservoirs. to to near-term existing focus wells on that mitigate focus on our we're existing ensure the So will help optimizing that and pay be in decline. We'll on getting those we focusing for of existing all can our -- and barrels incremental reservoirs out pipe

this current new a base production assets growth our So rather there's drilling going to term. our wedges on in in than focus be more lot near

really have we this we're with we that excited everywhere that stacked assets fact So have, pay. base about vast the of are, we

stacked intervals and develop in to where cost wells to, wells. that at us see other would bring to intervals and lower enables new we opportunities, than So on it develop optimize drill much existing to the pay don't cost production, those

is Paul. through the So and the focus. that of performance on into near-term just will mitigate be our depending optimizing infrastructure and rest from base per go help is decline, our lasts to lower I'm existing to year unit basis. on our the Doing how this that that, that probably sorry, Ultimately, ahead, recovery, focus wells cost to production using a that's long

that Are trying to the way But at and that lower you the that the going a even leverage you basis, a my longer-term look more still changed growth ratio stringent model how business is to I'm going understand that or it has I you Vicki, of what lower fully to really the rate or you're criteria usual? at that more to understand do. I'm the for you X% sorry. use? or trying event what term forward going is the debt-to-EBITDA you're changed is that the as a on parameter from business think near have I you're question. and target think use

Yes.

be to Our highest the will debt. priority lower

capital lower target scenario to or growth have And such sustainability price that lower is can target, be we our our around cash cash debt. cash So do believe to more free with we that take our a price lower then would a in used assets structure generate free to can we generate a ensuring flow is We programs flow That can get debt. environment. than that. that we'll rather to we flow have, where free the that

highest So in couple when be I'm next of near the debt talking say will term, And the term. near the priority years. over I

next question with Our James. comes Raymond Pavel from Molchanov

This behalf of on is Muhammed Pavel.

surface the guys status discussions sale an So about of the can of of acreage regarding update the provide Wyoming State you there? with

Yes.

the pleased that the we XX sell the year. that grant. we And are We And the this this grant. just X early of running for bidding off a process grant. Round to process land kicked We've year, bidders for process, had land completed land were we

we've take we'll the Round late now of asset And would about about that early that, that far. expect QX to QX. all We So about process. bid but to in we're really on X thus to that's what able close I can disclose seen probably or excited be

Understood. Okay.

capture in have your guys of projects some carbon capture technologies. you so investments talked And past the in carbon or about

been any carbon cut that you Given Are has budget about XXXX so how program? the talk projects that can postponed? being fits of much, guys into the capture

part come our be take from opportunity we and for were potential Oxy was of out lot bring COX land and of we're providing the bring to such Oxy And forward our what bring Ventures others partners those that a going structuring in to for it. of build Carbon reservoirs. not We in the capital Low capture projects is have COX to the to the sequestered put expertise reservoirs the development because the is we facilities facilities. to going way We the carbon the our in sequestration. a The to

us, facilities. table the will in that So partners bring could, help the what are us to existing build What our we as is our those bring to table the assets. others experience to funds

cash neutrality, the to in the not and to only it. generation, that cost like through cost overall this our of lower also pursuit cash the that there's also say the drives to but basis, flow that add I'd reduce opportunity

our of to So it's still future development. our very part cornerstone or much portfolio

in We're in This both make also Yes. Low way electricity and of COX recovery is fact, of and And we with by that that required largest cost for do It's COX so our better the inject that the as the COX better, addressing oil saying. making to the can business cost we about the costs it's Carbon sequestration. that more Ventures COX. expand cost just the our those. cost that was is that less lot two current Rob It's about of also XX% can But lowering enhanced operation, our our a is, sequestration. it into associated of that's expensive, play. out we shale operations,

then gives but not grow the we play, it all model that the applying that the us and working in option So as in once that over more and of shale Permian, Colorado have taking lot only that and to a the well. Wyoming expanse built and

with comes America. Our question Leggate Doug Bank next from of

banks discussions had clarify a I follow-up, And Rob, if like debt. bit on convert And wondering Is you, baptism on was welcome realistic a looks over billion I could options have if are. walk And a how these with I exchanging possibility? refinancing? And potentially I cash burned to guess. What $X start, for could slides with us of got you of you by you fire, why please. it a through you Rob, in wonder could I've just options April? if a your the

Okay, Doug.

of first. of hit primary the the cash the in The me second the April. question payment Let reason dividend was

obviously, the it put So provide month earnings that don't the of April front. during to the important but on we current was call, use in an we was cash in thought out information April. predominant most of Normally, hand cash the

well near the associated We're and the the known talked discussions comment cash But expense flow based the is cash and future the the reduce had balance for we've to believe with savings the already which to operations, help the also operational do asset hedged environment. we on for our a those. liquidity we've I today. in have that conserve from won't we about combination regards with in cash adequate flow taken going to that divestitures cash price of externally, neutrality, XXXX, low With steps we reductions specifically on

debt market continue satisfy a we what and do divestiture be to to capital the then and beyond have 'XX maturities flow, we is, We maturities portfolio we have exchanging do at certainly look and in able not recognize markets. that disposal, debt But the asset place XXXX our but extending cash significant all without free the those in across we believe may refinancing the recovery. the currently proceeds,

we're think actions. do for us. I think near-term those So maturities in front I taking those to opportunities us are those of all that address are

are to markets clear, you to So be you? the refinancing, open think

Absolutely.

Okay. is probably this underlying decline. the My on one's follow-up Vicki, you. for

about on like that obviously have the at as now Ghana walk what I talked you us asset that isn't rate, through XX%. is back mind forward. my an And of can that's assume exit what unmitigated the But business. assumptions looks including You you sales? Algeria for base going

So going rate there's think that such exit the for into And a sustaining what there. could, what does number you do if is XXXX? you look exit leave if capital rate that it like? I'll

our what doing going of to is hesitant a we're in we've because you now our to number base reason it's for Well, look to the said I'm what like And XX%. refocus is teams. decline give QX

don't growing have teams. management Resources As going an operating production to people to and as and done doesn't management a in done management. have say base not in supplement like we incredibly job I And some we're production of that's diligently just to our It's talented take we're Permian the our it get them when this. great as who environment base my sometimes script, these into going said a mode, people high-growth in you're that can also should base great

and pressure by just cleanups, of the by types, artificial at What that production perforations that find expect that don't we we're that doing wells we on will and/or our that. optimizing by, So things stay to by virtue reducing again, decline to wells from treatments back existing expect mitigate doing is by going XX%. lift on ways teams acid have like decline changing

producing So today. opportunities there's the that with existing optimization are wells

for that thing other wells existing us were a years. going of the but program. that It's to an intervals the were inventory produce. that's rates this get not growth to few that those They're always intense mitigating zones we've had executing over the there growth The to and perfectly last base we below just is, in for our producing have suited higher above decline capability not

we that expect the to help mitigate those So will decline, XX%. that

to rate tell QX you what hard be. would So a now it's right exit

haven't The to less have to I QX, our together We're to from we're working plans. But QX a all that them. We very confident much teams that. am not put decline. have going something than XX% going of are

important hit to long said, and is think Jeff. were brought company. I'll before you a inventory sustaining base this if us back you've for great all when and Doug, really Vicki forward, And time, the management thing on we capital. covered go we a your unconventional remember, like the boom I that

that at and what were and look in what did. Colombia is EOR You our Qatar, doing business and we we Oman

of a of that. -- stay parts have our business So to continue on been lot focused the

of think and Now that don't worth sustaining have Vicki CapEx, specific why number. whole the But to give new that. higher out I set it's a what we even said, we degree, we'll the data to to a do pointing business bring rest on a

about talk we what have let's So disclosed.

our said, And WTI. sustaining our in XXXX at into capital $XX was plan, would $X.X remember, at be Previously that billion XXXX. we previous growing

we're doing those. rate. Vicki against about talk that. the how about to now to blocks mentioned better. and going the get talked It's let's decline building continue So We've

of bringing The decline bunch is we're unconventional a on this thing year. not that decline barrels, high other that helps barrels rate

production level, or into Starting previously what to was now be higher So previously said what you'd it like expect we're we not XXXX that we we what be than we because growing think thought. to than better going before. just

best-in-class continue gets intensity, we've shown, Capital also to that and So we get as intensity growth on factored areas, in. capital better. our

better. only can spent, is also best to not class, get add continues it it look you at we the in when every for dollar So barrels

So a the will what on sustaining be. helper capital again,

against million sustaining in of out spent set. that couple obviously, to year what's Now an to where kind put quarter work is you you we an last similar something as Rob and of said, the spending ongoing on that before was a the capital going activity $XXX before had quarters, basis that

from year Midland level at up talked you when the always that programs. don't which That in look the we're that, expect records area will like couple learning when and look to the back the It's some I capital, first Vicki it things happen from of impacts, you the a sustaining when do at, down up great months we back curve shut spend have I an when we at let's production start start-up if restarted. that. But call you $X get for of just start So about about that. today, Basin, impact that on capital, that's thing you period

immediately of took across And because other them. and business business records they within learnings able we're standpoint parts to a from from an few execution setting the the apply were months,

that we do number, see in that. through capital don't in expect we'll huge, while So come and think be year would of then that some quickly work capital it we will through you that start-up sustaining first

we can drive you that changing business components think to at take about place again, that is the to down. believe be, expect continue sustaining be able So what and in do we capital, all as it and but can you you look those would to how

to of Steve mode now, we do was criticism is and tell the finding the increase And one refocus these buying later, bought the well. got to that use that just it Altura, you, still it. can I in XXXX Denver Chazen Permian these production still Basin decades example. more later, Denver to there. years niche. just That harvest the I'll he unit, reserves And Back assets. we're reserves all the City in when we ways our And on was adding

with Brian Goldman Sachs. question next Our comes from Singer

first wanted with a made. of on of to you couple questions points I a clarification that couple start just

excludes your includes accessing billion And in term. expect grant? Vicki, includes you $X excludes solution side. consideration near think comments it the then the equity whether there whether you is also versus on said, of clarify you is in and was was you equity possible mentioned coming land common also, to versus whether that talk divestitures I I a First, a Can that issuance? the Ghana or that think financial that capital markets of Can

The divestiture. I about Rob? does That's So $X I'll billion talk include say not can on all specifically Ghana. the that.

regards issuance to right price of in considering stock, of stock. light the the something With common Yes. not of it's now we're that the

is Great. And then follow-up of a bigger my picture. more

within a and in or the back with have conversations versus today's of generally the Board the focus changes, presentation. concentration the slide dividend, on the any in you M&A delevering, you've some discuss of relating or urgency assets given in shifts company? of management, corporate the in had priorities can specifically to the You governance and breadth of on change levels the of recent And parts the Board, both the broadly

the of to with need say Board excited I'll environment. situation came thing back perspective, in one Chairman incredibly and Well, personal a that the debt did with specifically this dealing Steve the I'm because Chazen we on help Board that from as

up. my us the lead through see we what ability a from so what's now challenging coming for with had Board And perspective, to I maturities us especially company is environment help world, very, these his in but for the very since every

this with value other for X the experiences on debt also with and of helping with creating through on environment already Andrew an was those debt to ability Langham us The is help and dealing us. exchanges us situation. that Board I we and the think experience and Nick in just brought brought that Graziano experience is to also the going and

that our strengthened we've environment. that in think to I So do in this Board we way definitely the needed

Our comes with from next Todd Simmons. question Ryan

Are on cuts Great. -- in the $XXX reductions about OpEx question side? couple of of the first, view impressive on you the you I OpEx the you the particular, of guess, of side. capture? things start those how sustainability those going and you Maybe a back or talk as of on forward, you the activity in both guess, kind levels Can back forward, how term, near ramping can that much cost structurally cuts do ramp the up necessarily think the going a CapEx operational the questions CapEx and up pretty kind I on additional million those

that the they million things quarter, us where quarter sustainable is by that to to worst OpEx $XXX about get still one incremental QX not did think the full million I are have prices just because full because encouraged the be a we are, in we $XXX certainly through the that storage. of concern people this expected while we is some

particularly So May, expect of for June to of be us. end challenging the Xst we

So through lowest we possible make QX at cost structure. wanted to it the

since to of currently about well sustainable. The back right So help where some production our we're we're need to online. not where wells wells going million $XXX issue, XX% oversupply anyway some need those back we probably XX% because that of putting with part to mode the to as bring is service reduce that's the our in of OpEx, in a to is we're fell not now, rigs

service that's be and point the months month that. start as where get rigs period do and to difficult feel this the beyond or necessary recovery, we bringing So at like the over start to have start it's to we'll next some we when well X.X into the cash we able back

offset that drop other believe we find There may are to bit, So teams back. need would do but doing increase significantly. things cost of the to opportunities we'll we rigs that differently, minor those cost and I activity other our the we're this as our some that but that a start will some little

on just I'll that, mean, building point add that. to And I Vicki's

allowed slowdown culture recovery. of things way generation past our us and things very for reduction, pursue on passion this the can and as internalize make hold the we've to had really we growth direction so that other that that us time our the on way back that we it do turn margin we impart equal the eventually take at and how and in the really give cost and into deep of this look the business is is the unintended a business for to the the do really One we benefits passion to step

really to it's short the about we've One shock margin on it's get within inspiration our a But to forward will pay the and moving move generation, dividends company. hold of culture cost reductions to if the of that the people the to passionate the business. system, to the that and done difficult things really for challenges such

I think -- the to that. quality just finish sorry, I'm

speaks of and challenge quickly it. ready we they're they quality and the so our that things address to your question and the it it they are that found excited that is? achieve that think employee to And next base these about motivated, have I

think can I it's add one Rob thing? Vicki what I Ryan, pretty said. a Because with remarkable thing and

we'll at If look be level in overhead, a than were at lower we'll you Oxy stand-alone on where XXXX. be SG&A, as we our

that. have the before driven that So size we business the we're back of is and the did the costs out teams been of by we and overhead remarkable company basically same the the to doubled

Maybe improvement. a the I this again in it something is Maybe there. appreciate but or eventually Permian year-to-date showing from year-on-year I sustainable gets levels that's impressive. performance all well this? right basin? on mean, is everything clarity in follow-up any the lower re-ramps activity as the significant the on more going on that's grading That's now, lost else comments talks that Permian. Is in drivers activity of pretty the about high

and basically It's from on we sustainable. both. of are definitely everything doing learnings things and continuation the those Yes, combining the new applying a assets

that and Anadarko acreage of mean, landing APC you So Mexico showed acreage. legacy slide. on regional development taking on the New I philosophy some and sand or that Silvertip we the like the from in points things learnings applying

teams now be of have to are get kind back and quickly. are see that the thing that's improvements most we that on on the believe expect going the probably in built be burner, that for I that's improvements made. whole thing mean, is the disappointing can being to me going but that of we level up strongly those sustainable You of back it we'll the all momentum put

on the talked And The well. the the at, that you're includes are that other performance design. thing in wells Those improvement looking I'll that as now has design acreage point they're former Ryan, new that driving that APC on Atlas about, out slide is there. we've

too. on build just I'll Again, that,

further because have able thesis have the investment we vast we of of coming to high-grade out even would Oxy. as One portfolio, such been And if remained. than this still anything, a stand-alone can we

Our intensity lower is cost, than much greater those Oxy original would capital lower come ability choosing to out with and wells the been without have assets.

And incredible. performance I that adding been DJ the can't team, that Basin. there has let this drilling has conversation also end The team without

continue to have to give them. shout-out their we a improve to They performance. So

Paul question Mizuho. Our comes next with from Sankey

where volumes, that about give the and bit decline so In XX% a as exactly you you're to and from on obviously can we you you that? various components on various can your come decline, that to the the trying number talk regions through more can but My your mitigations a essentially forecast decline and try various out rates is, should them? and is towards detail question mitigate get of how the less, the portfolio base going we than the talk imply, rates us

important that said Jeff for when play Well, know, is that X.X decline you in note years. is to you I it's years, what first as year, first the -- think has the shale highest the two right earlier,

going to few to slowing we're fact shale be very production the we virtue start by many new our itself wells, drilling as wells. new that decline So just of fact, the mitigate down, as of won't is in

less is. be decline So to that is it traditionally than going

past, we're said and X% in when the using decline, our is we've business, EOR normally fully to COX. a X% that's The

some of COX in. our wells shut have We

shut lower be So that production be to going decline bit it's but versus now lot not a actually volume, to of little a in slightly could mitigated, a there.

to it's conventional Middle look the we we're the lower do of But hard are So at overall, go modifying decline. each those and everywhere. through East, what as reservoirs

hard give number. really that a to it's So you could single up a then roll number you into

decline less that the decline production shale less. know on. EOR on that's with be working we're everywhere. be will will The the Just

X%, what's lower producing than today. with X% probably that, down to So

bring is building redrilled when that et trajectory in backlog piece light way We're we've will need plan. that too, other cetera, of that, that to online in mentioned It's executing really existing or the maintenance, be a now. measure of prior been difficult online. not year production guess around set is seen that wells I which a development downhole activity won't Vicki in the bring a And we've significant barrels back to that or right anything the of recovery different really prices quarters, quarters to back than unlike knowing typical growth or historical where

an current example, the the $XX oil the from $XX calculate a cash year for final, talk currently of cash you is actually, you year believe of those to was And the environment? cash much can at April let's the in be sort future? strip, barrel us me, how strip. price awkward environments, then about we -- excuse the current flows for barrel next you if because which second of for would next give what sense generated Could a flow is and quarter a flows X and And the this say, price. Can mix sensitivity, about expect we

much you trying inflows to past your our be Paul, of you help our I model here, I able -- we cash can we help way a once to but with all. not we'll tell think QX, get pretty you, with was to is where going this outflows. at to balance

in our either. So assumptions don't QX, QX and but think be we'll neutral price I you we've given

sensitivities, as a $X bit. you at change have gone production at would They're the a prices declines to equal all. the sure that in not I'm I our oil the helps not down So bit, say that sensitivities But XXX.

declined that as quite that decline not ends we up they're depends the a mitigate we Again, how sensitivity there what yet. being on up, They've little ends much can So bit. go.

Investment with from Brothers comes Campbell question Our Tuohy Research. next Jeffrey

a I'd is couple thinking of drum technical And of to thought beat ask I questions. performance? reduce different the test automated I'm traction. be give and directional We've so kind to Oxy to is what seems on looking continuing example increasing a quite headcount some of about, to solutions One gaining improve bit, forward, dead an drilling

the leveraging the as most we and technology our push our Yes. one able SG&A envelope to We're as and on probably everything automation we've going part that's reduce been in much automated reason significantly We of are as now, EOR business. teams the our can. to Permian areas of have

the With the drilling, our you've envelope how pushing the because respect there, we're too, drilling yes, seen wells. improvements in we're to

do need on automation manage to the driller of drilling it's which engineer to the to tool automation of typical pusher process, takes tweaking much they're part in can has those of by as the But the can an then drilling as a the side. on beyond So install, gotten where or build rig better. well. to That's then just we process basically once the actually we models that computer us help drilling we we But And get where the it automated, drilling models. the are. the build area

a can On the COX operations control highly actually those from We manage automated. central our are side, field room. operations very

that. So managing we're

production and those was what are, to As part sorts improved started doing kind versus with being able I we're We'll versus they artificial what modifying on wells our about letting which better those that's well we've rely or manage of what on-site really talking should our productivity respect need to physical of a processes. control on us of when depend I completely be help from intelligence visual manage more any and things to wells said room. and tools

So much a lot there's a that toward that's of help environment. us to we've installed automation going move SG&A lower lower,

the to Yes. bit add portfolio the Oxy's, apply you on can't you sort as is too. as of of every portfolio. doing And large that at and the a portfolio, thing When also, I'll same too look our techniques a we're approaches vast have

a required time may of we're time going lot also but bucket we our people wells us of to so where, type of fields approach the in well some not we're that, automate the is production for And not to portfolio approach bring period well or we leave in the an is to in not to the also back this one-size-fits-all savings. to operate same continue again or to to number cases, the be and to down reprioritize sort cases, how we maintain going of use quick well. allowing actually other very a bringing And and of may operate extended areas And only a or this in. how

it back just want just quickly make prepared mentioned And to you to get I Is the sure the detailed this. to regarding Algeria. there that something buy understand or I that recovery until appreciate be notwithstanding color. refused? forward, I in remarks it your decided going offer can't asset operate to price is intention core now an that to receiving a have you

we if couldn't with is an refuse, we do we And working forward. going certainly the partners. that was offer Sonatrach because way Oil to And got Ministry with incoming need that would have the it and we coordinate asset that's core of a that It's for Algeria something internationally.

that's enhance to one and to Sometimes coordinated of that. the and the in have We're to to we and increase region. and decisions there the operations, need be It's need to committed our believe It's the do great value we do be we opportunity committed that be to there. asset. best assets a best

interested it, in and refuse, well. the excited would that ministry sure stay. couldn't and going that I'm to made we someone we're as we're So about if came in offer an Again, be

comes with Leo Mariani from next Our KeyBanc. question

Just of housekeeping wanted quarter. of some here second on the into guidance couple the a items to ask

$XXX change more detail are you was guys kind midstream quarter. big on and Significant I hoping negative and the of about could hoping $XXX I regions around shut-ins. to. the what income. I guidance, minus think change kind on some of You saying split to elaborate first that's up guys per million million, just guess, pretax XX,XXX the you day of midstream. on little And bit reasons versus talked kind your BOE of I a was of also get

is and start can with I'll those Rob then Vicki in. Jeff. and this jump Leo,

quarter, for of mentioned, we're related. production. X/X barrels XX,XXX said, estimating is shut-in So Rob second as as of you that, OPEC+

X% and that, that's the economically and resources. from domestic which EOR is from And about of that. production The then Rockies. that's the remainder count is little and of Oman best give The our So realistically barrels, just is you to of And Permian, number part And XX,XXX way color, the to wells the can about about driven. a domestic in the that the compared is half think other shutting Algeria. guide. assume so is that, X% we're with you half well our in to

shut -- of So a proportionate That of more production economic lot got wells. because expect, the X% shut a in. of do production first being you're you curve, on we shut end you and X% that you've wells our in low is as being would in about

doing we're integrity well or the this like in people when bridge possible protect gives artificial definitely and with And some the a temporarily just way ensures abandoned that whether they're and the plug about the and that. cost. a And descriptors, they you can talk that at all up kinds back things in lift lowest So we color. perspective shutting or use that wells, reservoir also we just of turning off start

the you can has we about the moving a difference go midstream, through in the this But So versus of We offline pieces. what more question a position. business QX. estimate our that at timing-driven. we saw of mark-to-market a lot large recognized end gain hedge know, primary your as And because, detail almost that QX in fell lot in as prices to impacts is earnings QX, related QX entirely

offline, primary but low our revenue of can in through So more we'll physical the driver change. talk the on when realize QX, barrels are same prices the impacting delivered. that We that they're that's

care I of terms years. question maturities, was guess though, for exchanges to there plan for No, them given me is mitigating I or just for of going or the better company of just in to to terms is of maturities couple sounded a is the helpful continue on to the sight 'XX pending line what sure just focus refis I'm just or whatever. of 'XX that correctly next philosophy. of care much declines with as trying those Okay. reading actually of of and taking until Oxy's sure. taking It lot for sort in here it make second that's And

message that trying guys are of deliver make understanding I'm correctly, Just sort wanted to sure if to you today. that's the

this it depends year, mitigation. but It the primarily decline a price be on environment, will

how a as is strong where recovery more would see free But what Going generate scenario It potential cash on could need a some into few There's in the depends prices we be and it flow that to XXXX. still add well. we the back. XXXX. we rigs

we capital. activity generation with were So some flow level balance what achieving would the free cash after

Our Josh comes Wolfe Research. Silverstein next question from with

is least this would the quarter. before, of base million equity you the shares looks but part at touched debt pay right sorry each strategy, in as preferred as part well? $XXX if plan you with of like I'm to It the and paydown now this As consider on

just a why balance equity So help now? to the do right sheet not larger derisk deal

on that No. And earlier. additional we pay a did have touch intention We share issuing equity little an down on any debt. to prices, the don't

it. Got

Okay.

about that. pay can secondly, to to that down that debt. And had And the target available have facility you then pay $X Sorry you credit you that right you mentioned an sale asset now. right billion much used of use before How then now? debt was down

an get now to? you guys You of have to debt absolute where wanted reduction target

not any at So facility feel because point drawing it. it don't out time. any we in the of drawing there's point on We're time can in on need any that at risk we credit we like draw

what rating. to goal to to, to current back time number a In investment-grade type over That's ultimately terms total is debt structure, of a our path is. debt get the get an

Jeanine with Barclays. from comes question next Our Wai

question wanted quickly to on just now. I follow right up Josh's

need the that But believe might a that And covenant? correct? do you're revolver, trigger you current unsecured, now, because a might don't have that In just have right do facility that on I road from IG an a anticipate debt terms I think RBL move it's and to as to covenant to the debt-to-cap going sometime there's I it high-yield and leverage opposed you of management down status. to

you RCF need correct do we to on type see go facility, facility. RBL and a don't current the that have Jeanine, an

comes Richard Securities. from with next Our question Tullis One Capital

do by quickly. a run back that more going that for pretax forward? normalized discussed. Jeff rate to just business you the guided half losses yearly income midstream of What you as the first the issues timing pretax see year, partly Going I driven know the

is this in guide I'd of, year. category the Richard, Jeff. put we that didn't full

more on those differential So of I that. out feel see we mean in providing things from the that, standpoint of we quarter volatility that markets didn't there's comfortable just so play how clarity beyond and a recovery until guidance all all much

So and or we'll blocks building the mean, I and assets go defer that. in I those the other of you, that that tell cogen some into the you would the still still East Middle of there assets. good business things, understand and are

on aspects just volatility So they're there. the all the marketing It's around the other side.

Fair et follow-up, the Ghana difficulties then the look the move you're sale weren't Algeria as back you putting enough. does now with better block if that a acquisition, that environment maybe marketing Sure. now? are do right maybe the the commodity almost on asset there not forward divesting you of doing announcement Total see at a And closing And immediately assets deal, the secondly, acquisition time maybe just given the Anadarko other looking that in at cetera? you at or

it. it say is still Whether would consider up not, has for an yes And that. for still be there in up or sale. I would Ghana Total we some sale. be that to buys it interest asset been to

So that's something that pursue we would still divesting.

at would proceeds alternative. with I deliver came Algeria me beginning And think in wanted reiterate to At the cash divestiture Ghana's we and we the an the up but earlier, we similar that. targets, that said have year, similar with early when flow. looked a of alternative let I reduction

sale need those into one to marketing to assessing people come need to the with need things applied. got were management do Ghana. process. in restrictions the asset. in where Algeria We the dive and alternative team that We to all And presentations. process, that's the is started we we details So that and travel early of as value we And this of into an we this technical year started of the

interaction. it's more that little So one requires a

and for So that as restrictions travel be right lifted better. we on get for the to environment we wait to now put hold have

to but The about we can't we're situation acreage on can Permian when is the not are But things other sell. want still to it other with strong that sense to, execute in asset get what maximum talking that that's where those. found occurs, sales occur. don't maturities to maturities carry. if and some I'm it assets just to can got we to recovery ourselves respect of make those. to as and where the And they it's we going a timing we're as It depends with the potential debt one. could we get not sales, do how before going and do we even we do other divestitures JVs then why environment. have the is make sure and alternative for really do that can There it's closer in some upfront the DJ we'll that generate then cash of do value do, We've in do we options, the we where we potentially in put the but to is are of There even outright a this lots

for today's time, the question-and-answer of you In presentation. today's well our Thank this session attending concludes as as conference. interest

now disconnect. may You