Occidental Petroleum (OXY) 11 May 212021 Q1 Earnings call transcript

Good morning, and welcome to the Occidental’s First Quarter 2021 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator instructions] Please note this event is being recorded. I would now like to turn the conference over to Jeff Alvarez, Vice President of Investor Relations. sir. ahead go Please

Good first And quarter Chuck. participating you in Occidental’s XXXX morning, you, thank everyone. for Thank conference call.

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

morning, flow in Thank a you, expected catalyst performance. for continue progress. solid generated intensity provide well quarter by pleased I'd how we a This increase to results and cover Jeff, are performance structure this quarter and Rob leadership is midstream guidance, to our cover with and OxyChem's was free improved The start momentum cost quarter everyone. and financial like this our capital our will divestiture morning and improvement and saying good updated and includes results by our first which foundation cash our to as sheet for earnings. as operational financial strong an first generation. afternoon, I guidance balance XXXX for our will operational

consistently deliver level $X.X cash flow, first performance cash results a the quarterly billion our how operational are ability perfect decade. strong in quarter is a highest free first to strengthened of which of Our generated flow position. free our example has we quarter, In of financial our

$X.X exited with million million repaid $XXX $XXX of divestitures, approximately debt cash. the and We unrestricted also closed almost quarter billion of

X.X $XXX We're Storm is plan track. challenge over of delivered Uri. to particularly of continuing only this with achievement, capital We quarter on by rate quarter operational at exit million. given operations stabilize production of Winter BOE total fourth company-wide million per spending the from Our first our XXXX day, production XXXX proud posed

products oil demonstrate of operating $XX cost the includes of recovered domestic atypical lasting per that and lasting we impact want and reduction note continued about storm. to measures winter from $X.XX to storm related I to costs Our total our cost year million with have gas BOE incurring the fully with otherwise guidance of the the Even has in added. $X.XX significant that impact. per costs have increased This increase approximate the in BOE to our downturn our the achievement which first OxyChem's domestic ways in with smaller invaluable by only full pharmaceutical would the represents a our per mix quarter, OpEx adjust storm-related made is BOE, the to significantly to a to ability efficiencies $X.XX than million We $XX respond soda operating provide no by strengthening first changing last markets to effectively PVC the quarter, caustic to lower OxyChem opportunistically seeking pricing chlorine In disinfection optimize provides robust integration ability and innovative was medical, maximize to teams finding year. gradual our across were multiple and costs. OxyChem's critical margins. the and production dynamics from continuously market while soda safely benefited rapidly market. during to adjusting derivatives to able possible the and COVID. caustic us production

OxyChem in as of improvements free record its we markets, expect extend a and consistent recent the to Given caustic cash market generator and leader track the flow. soda chlorovinyl

able protect was storm winter as during as essential Uri, safely to our team provide well assets, customers. products to our Additionally, our

Rockies, outperformance long-haul amount. was are cost first guidance along maintenance of by optimize primarily export in ability timing Midstream marketing's response with impact effective storm's team's to the quarter our and driven the in limited sales. to the immaterial Our to facility compared impact on an gas the transportation

the Following with as to envelope efficiency and oil push in we business gains continued our activity the the quarter. quarter, the new first gas fourth seamlessly increase in transitioned into

by first Midland outperformed Basin, setting drilling new Delaware teams in Texas and quarter driving the Mexico, costs. records Permian the Our New while in down expectations the also

activities Our first to quarter drill allows efficiency Oxy Permian exciting steered impressive the directional be Dynamics of now have achievements augmented we our innovation are that especially Drilling an remote with the as drilling, bit operations has from and a control optimize expertise to and able from shared that to to Being expect the in apply our benefit we remotely operations numerous our separate location. advantages future. instantaneously similar

HES no have the the of laterals first XX drilling average quarter, on new X in Natural achieving times. Resources see history permits. in plan move support In US first pause in of Senate foot longest process drilling federal leasing We forward in I late average to the as in year Permian new while the quarter, an expect April, in where I'd of Oman the permitting program we our Oxy run to performance to the with currently testified with also significant an team this Rockies, not the rigs earlier to process of their and a improvements we the our Committee approval the best-ever the Energy land impact highlight drilling to also year, for moratorium. history. Oman in efficiency this DJ now Rockies. in reached lowest of continue permits recordables again achieve the have and record drilling per our on still started lifting do levels cost issuance like federal before the We activity and After

and we middle $X onshore year. of clarity the announced working plan our and Committee, year, reinvestment during billion the and the to last product $X and economy. needs of oil meeting to community of energy and high-paying our Congress low-carbon transition by the on assets sale told to We look with a forward billion create divestiture administration means onshore I Colombia regulatory this and As to we short After assets certainty. gas jobs, the continued development updated long-term ways sell to

towards closed of achieving have best well our value progress will approximately Colombia, the $XXX to quarter. in our million and way the target million of are environment we the to weighing of as first in closed Our divestiture we on of $XXX meeting continues now flows impact this almost the Post but our sales current by deadline benefits decisions we versus target. target, cash make future continue divestitures a or

achieved created we've pathway emissions. I'm the only balance net to continued forward improved proud sheet the over ahead. the look our have accomplishments teams our and back achieve the year, our opportunities portfolio, to zero have that Looking and to Not lie particularly optimized last we also reduce costs, of

we of first stable preservation. with further next improvement, capture shareholders our returning scale balance As production additional future we bringing and our steps through take online, achieving plant capital our will to goal capital air to direct base, cash and commercial toward generation continue flow efficient, a maximizing maintain goals, low-cost, capital including margin free our sheet discipline

are the Our our cash success. positioning future for flow of priorities company aim with structured

financial our improve until to to encouraged a we base, of the sustain for first we call the especially you shareholders While our reach point capital macro Rob, ability on through throughout will where balance proud sheet maintain support our continue for by will remainder team's cycle. are improving production guidance and financial quarter of now to our to environment we are our the results walk hand commodity and the our will year. position who I'll and capital return the return the meaningful over more the of and

performance our to Vicki. Vicki's I want strong on Thank echo in comments you, first quarter. the

free Our flow we cash sheet cash illustrate discipline, improvement. generation continue importance capital balance and flow priorities place on the to

the to come our was As XXXX, to to our sheet commitment our On maintain our excess we improvement priorities, will I've continue medium-term transition necessary influence and in endured, financial look free focused cash which flow XXXX, since of year. for allocating policies. to focus discipline. Throughout path of combined capital on and complete cash We're our viable August we worst to the to our and first with our this ahead the rating. steps to of of debt industry to calls, from We priorities. years our medium-term current continue flow leveraging repaid on our quarter deleveraging balance cash to investment-grade one on approximately highlighted we divestiture has excess preference can return with past rate principal a more credit ability flow to as billion our $X.X program, reduce

environment on include may are of While investment-grade price debt credit based a range. level mid-$XX to to certain returning in several billion factors, the commodity mid-cycle ratings reducing including a debt,

there quarter debt divestitures, have achievable, goal this believe free potential in cash, We now repaid of today, our available cash We XXXX. not first flow. remainder and organic are the sheet. $XXX to more but have given we flow than less cash options some we balance and improve generate our our million $XXX million close we of of due that here deploy from cash the maturities is remaining If free generate to

may We prior our have cash due. floating times come call and maturities option the at until XXXX maturity to to rate to allow the cushion notes build

We fair almost loss adjusted an $X.XX at XXXX address swaps primarily million Ecuador. at interest contingency expiries share consider evaluating. of retiring asset which fair reported reported per end. $X.XX and of approximately with adjusted value current We The is gain a results by settlement notional million and announced also maturities, quarter loss and planned and on positive difference of the to cash have $XXX may would we future additional later we annum million per quarter, offset This amount, In first curve. year rate to to options a lease this our flows per available legal between by improve the a was which related the share. for sales our currently adjustments, $XXX are value $XX due

classified all mark-to-market the of derivative as affecting quarter, This clearability. we items adjustments instruments

mark-to-market the $X.XX hedges now to be guidance, performance to floor XXXX change helpful natural and had previously expect actual adjustment. We quarter which per have our of underlying comparing investors reconciling with and periods will production gas approximately hedged the Mcf. results able were between a gas to add excluded our in half domestic this additional We business of

We within million year budget only our of quarter. in capital first on having expenditures are of to the $XXX track full spend billion, incurred capital $X.X

billion in with combined billion $X.X environment, on in on to success, a cash free and cash quarter more generate exit hand. us sustaining $X.X operational Our almost commodity with in supportive price flow restricted focus the enabled production our

capital timing reflects higher when balances difference the was negative Over of working between cash by Our business the change incurred commodity the due which capital change in largely commodity was price, which quarter, inventory is to and recovery. working the received. recognized the accounts price half and to receivable driven revenues a due

benefit in employee payments, see We also pension made are of reverse quarter, last first capital in several to working contributions. this payments year that property We and the typical are payments, the for as change already this the remainder cash paid year. of are potential year expenses quarter taxes, the first including the partially accrued over interest

be quarter performance We and to year are guidance for and able improved update OxyChem, first pleased our midstream strong conditions. to reflecting full market

per our per preferred impact of to of dividend. of I our revised back enabled to day our Our year on the approximately $XXX BOEs remains intact PSC divesting our achievements, the guided of impact to weather of mid-$XX prices, a X.XX the lower related turn basis Vicki. despite over $X.X production our day to million range on XX,XXX to will the year us would over have million I call, with Permian now call with BOE day with million like guidance, that budget higher production full combined capital the production a breakeven full -- reiterate $XXX guidance combined associated WTI minerals first operational impact BOE oil per billion. does as quarter to XXXX negative X,XXX our last as before and

Rob. you, Thank

projects our We We reception by Report that well continues to the our of positive these a the enthusiasm following as and to XXXX in the received learn have many more stakeholders generate. will low-carbon are understand encouraged our projects returns our generate. as its about desire December strategy release Climate low-carbon

our yet floor economics, the billions have and share of infrastructure technology, and are to of assets to partnerships worth which tens CCUS able will COX not expertise and dollars' created leverages finance deploy space. of we cutting-edge While we our

possible. for and invest more impact. deployment pace these creating to others alongside when to cross-industry opportunities maximize We us to forward are carbon removal sharing look the information We

utilizing a in operational recycling have of effort and recycled development. Recycling zero environmentally water operator, part the Mexico As in and responsible water to make increase facility of toward pleased this efforts water being water expand able socially we Curtis Basin In began and Midland started we and a South our improvements partnership addition costs. ours been goals. with an focus consistently able the a to are Ranch recycling first working has were in for In quarter, years, in water net we been our lower New we industry-leading into company, Texas. several midstream to large our to

now the relevant questions. the to metrics we strengthen social, to appropriate supplement ESG to the announce transparency, most commit open to our engagement reporting We Economic gas investors our believe environmental, for Q&A, Capitalism We'll and and this World and became our business April, oil our the process begin other first we framework to into Before company incorporate I to your enhance reporting. that want call adopting our with governance will Metrics. stakeholders. on This and progress, is commitment in the forum's guide US Forum's Stakeholder the

Thank you.

now will [Operator session. Instructions] ahead. And Boyd question Dan Mizuho. come first Please begin will go the from with the question-and-answer We

Hi thanks.

questions you to last time us chemicals given want starting your I that breakeven? but free here. flow with a lower I this talked your even working is And one maybe year flow just today, for about the kind – of think Can in on probably the in what an lot was outlook you give cash comment adjusted work the given generation improvements Presumably, high on it, strip, So, you've on you the just direct the on if midstream. there's update think, and free at stock XXs. capital, it's that ask include think I of first, dividend it doing. air I capture, seen also cash

Sure, Dan, thanks.

guidance, the in operational you before basis, a say achievements, dividend. revised range breakeven, on our the when was So lower did mid-$XX combine our WTI preferred what

a to natural gas falls chemicals timing midstream able listed, because impact investiture guidance. obviously, and chemicals number a midstream guidance were our in significantly range. business, this that of a prices, where and give has factors respect cash realization is for we of range on by improve which And material the that it the Specifically, both influenced including our you earnings including and quarter, the flows, we products, on

year In that, swaps, things the where my addition to we interest that breakeven notional million million end like was I take to value can mentioned or flow in for and doing of that interest comments organic of further current at and opening curve. $XXX we notional we're $XXX retired cash $XXX million the the value, of million the as regarding rate able the quarter, improve $XX eliminate the using about costs we

that lot a into there's of that. So things go

it. end out forecast cash that we don't cash terms forecasting In flow of forward of side the of on flow year,

cash kind quarter. would – we I can idea things. get It's think see forward. you few pretty you of can representative quarter a similar of prices an working clean see moving what and fairly at capital I illuminate outside think a the And generate

on get Okay. sure more you're going that. I'm to

in to during that at phase. also there in least credits four credits to facilities capture. the someone came the presentation made about the talked air back back Air generate or guess, I wanted petition think, Resource to XXXX. that I document, October go a the I building to the or, a construction across And it get having online I Board, Vicki, California was your was on direct So team

to creative upon? just you of in So what ability and your just might about ways terms as touched can be to in talk finance you this that that, able do

first finance facility. concerns direct Yes. able any air capture we being about that I'll say our don't to have

to we'll COX. be per able of we first where once tons have The X million year both trains – capture built, one

to no the to generate That's accelerate do request they're us request, to So get facility. we financing as are some concerns. if we But facility. we're is cash it's to – there of helpful us enables when what that the about. And that was development – can could what next that building

to a what accelerate on our be have our to And we're we where that is to accelerate trying also others and value to We're trying impact ability I able positive that able the what do can. environment want create and to to the believe is to be for So do. CARB shareholders.

allows the that believe from built sooner. we another that's accelerate construction provide funds because And credit. critically to faster we enabler to carbon If the potentially that tax and us able obtain is that some either direct modifications that be for will us that that of we some XXQ so or technology, think is or to pay from capture, currently were the more XXQ that important to get a a advanced we

So the capture. to direct to accelerate all Permian ways multiple air with in there, at doing looking that we're we're respect

question go Neal The will Truist. ahead. Please with next come from Dingmann

I mentioned that and morning Vicki, in to it's the prepared know Rockies. fine the you as Good were you far rigs remarks on all. influence permits, -- with the two not going as

guess, Just come and August, on the -- decisions what in out depending to see guess, might, Gulf comes changes I I we the the Rockies, or if out? Mexico in how of either degree of could when what wondering,

the position an increasing additional It would where leases. think moratorium able believe out I on moratorium, current come we'll could that States. It current today. be put not on be leases. is a time there will I would My tougher would country United where will that even concern we to bad picking States leases. do would continue a likely that That is our changes industry. be have that up longer United the permitting term bad impact be a above the for for in our production

world million of domestically, deploy to scenario at we refining to ability production is completely gave you would oil That's know, that in own oil the a have the from our capacity million It U.S. somewhere gave over day a import because day were and believe level, us point I very a us million. strength at barrel As politics. much XX our products at XX barrels not XX all we a near one

completely So be almost we ability With capability really some leases, to moratorium down to federal industry's drive independent. would have would react. our a that on

million we've that U.S. -- half I in and about of we that to federal, offshore. of are X.X acres, million are And that, acres think only million X.X where got the develop X.X is in Now about of

significantly than new committed and working the best the and and a the about to So is But reduce compared better doing other help and we're API, emissions reduce. we would world. to all partnership this and further I'm for to definitely that we're the be share around this some from voluntary countries the in technology the being positions get industry States for in the thing lease believe to then for way are. a emissions within with lot what available United is emission and of of to where very we address We've what part climate emissions a of technologies there API companies U.S. a move in of change. others, to because other are each place a have to standpoint, lot as reduced continue push to the are technologies API, companies advocating country, in is we're to which United some bad touted prudent are States, we a reduce because

It's for the just think on could me, that, out new up for on a existing moratorium and releases. biggest So be picking any worry long not the time extended leases. picking I anybody is

that what a of is, investments, -- your able follow-up. I on seem you. Perm sort an see talk And capture. to just your about And or to the some on that you're carbon that upstream, here, I And really influence have was on investments financial going financial to cleaner too funds the what either Thank on then independent spend I'm just advantage, especially will maybe details. you type [ph], spend are liked you out two-parter initially there? others. guess, my really, there Thanks. will in and in some that, there because wondering, engineers question other of just main you the of they is around the

No.

we're we more strategy strategy very recovery before, projects. started mentioned and is we And plants. a not lower-cost COX we this Basin, have wanted today low-carbon our Permian positioned COX sustainable in source space oil low-carbon only resources, processing Our enhanced connected working the footprint because or a is because for our as for exciting have to of on COX incredibly such enhanced have we recovery. a we and reservoirs, Where floor the

of Basin enhanced calculate decades reservoirs. the we oil that billion And that doing reservoirs. We barrels further X necessary additional development accelerate COX and yet could recovery and we in of have to for the that to in us been the this, that up from from and pipelines all River, haven't the shale. new what the get in But our generating even come of doing sets able reserves to existing production Powder Permian, in DJ conventional

through really, value what it's typically able to our And than for of or extended the resources. to tied being so unconventional of produced be out shareholders can reserves tied conventional It's more to that. production create

better you example, For get COX, with up And XX% was conventional to to development, or XX% you normally, at most. get recovery. primary just XX% in it whereas can reservoirs,

where we COX the get XX% potentially that than at the tell and shale you'll better that XX% recovery, get can tested can but now companies XX% recovery recovery additional oil X to enhanced play, we with or of we unconventional from we've double COX maybe the pilots, you get most In it. flooding. hydrocarbons know run with XX% even it. most So, will We've

areas the position the now have areas in we So And already we we're where where have development. potential have future we it infrastructure. significant we the sitting where operate, amount a a in of

continue and just to facilities that able stream an beyond a go help which the air help further NET the But on that off where equity is cost were production is technology, generates we are other our pure emissions. incremental electricity of So, going be and to with of executing COX there therefore by capture going Power too, as we in. and lower what's lower it at a also built. direct get forward, point NET recoveries us also lower to cost investor oxygen, hydrocarbons cost and process and – no these combusting lower we're Power spits our to

COX take it in use can reservoirs. we So and our that

So it's emission-free lower-cost, essentially a process us. generation electrical for

So, is we forward a we excited, lot more and have incredibly lot of as the this lower of cost. to ways we're ground of oil why go out for ways a get

And so, the as we go forward, provide our addition to cost the Rob aviation in we structure that will continue reduction to to And carbon actual a decrease, development in not industries has and just zero but oil. with maritime from the and will from able debt field. about, that, talked net be operations

we're to why and with the capture be join facility. solution on maritime, to building United this and So first wanted actually for direct that's air going us aviation

it's So, exciting for us.

being ask, processes middle a to and about in discussions But Sorry, the and year, the in to exciting be to point. with of can't too and you'll here it that to able or you as end we And but close us. get hope have the see forward for others. fall see more and it's script, share able able will to model be anything you we that of I'll some at if some talk that understand we interactions yet, if because we're more else I'm this. said long we're really and to And I in talking the my stop on this. looking about

Doug with from go Bank will The come America. Leggate next question ahead. of Please,

Rob, billion to $XX, working capital. over on everybody. I in tax $XX.XX. million $XXX $X cash, price morning, want the the I is WTI question, obviously, real Annualized is QX breakeven Good of free billion. before speak Thanks. and per the $X.X you go math average to quick. hate with $X.X but was

still the how missing? to I do the add low What back So you if that Even press, XXs. only am gets you mid-XXs? get I

as can winter in of part say associated where, is what event in that a Their you sustained is and is then CapEx would performance missing see is Uri. chemicals. the certainly in midstream more think QX, Storm year. the inclusion I with one-time I throughout from So of that the the also The QX guidance,

I So I numbers. modify think what your its part That's the would QX analysis of by. annualizing

not but delta realize is I they're $X. about repeatable, still,

regular go billion Vicki, it's update, time, to but take Can to offline. give us progress My get color point? $X is, to to a billion. bit little Okay. more I'll you long I visibility $X and every a a question still The it follow-up on at the this guess disposal any quarter. way this timing

Yeah. well above if unsolicited we've us billion say have that, we the would I minimum would offers hand that offers gotten, get $X that I currently in include the target.

on However, always in the -- delivers for cash whether we want divestiture versus depends But that billion environment, or potential meet $X billion. the the how we it that what for this to to go expect what the And in the future then $X would -- and flow evaluate we we'll everything macro really continues the to we we that would not we're do, every have in getting generate. above us to look us.

meet part we have. to is some making And the have swaps So go flow sure the maturities also we consideration it's a value that to, interest the as and deal maturities, even costs proposition -- Rob with rate to and cash that that other that ensuring minor to enough our other it's was of for beyond us. saying, debt

it's our about sure our cost higher-margin all that making maximize lowering we So intact. cash keep flow, that structure,

for running processes that we $X based -- couple a the higher One But have still have, we actually -- going that decision a on that And do. do several have be is as things that a have priorities others not it's the to feel that, but us we Ghana, we process, gone have because in are of to valuation. several based So we've have going it announced any couple beyond we we'll the billion. talked the then get and preference about comfortable before. to really now, on we --

Neil ahead. question will Please come Mehta with next Goldman go The Sachs. from

Can quarter. some wanted to cash I build capital just flow the working -- much. so from cash through you again on Thanks the why the of just walk us flow number should stuff, then final of like sounds so lot about the large? think reversal? timing hit barrels how was will certainly just destination. their export we eventually and A And this questions

I through So, would that. just think come would walk a back, but lot us

do Sure, for Yes. you. Happy to Neil. that

So, And we When was the XXXX of typical in million. million pandemic -- going the first withdraw to with significant about sizable price of in this XXXX, a historically first because first it and quarter, draw you $XXX reasons if direction, a $XXX somewhat price about back a $XXX year. the was In more opposite look the the at obviously, the quarter March go quarter, wars but because in was of this you for going certainly of we quarter see XXXX, the hit on. draw when it opposite million. about QX

draw is change the and the does and It quarter $X.X of regardless So, by billion the exceptionally majority large. first experienced received. revenue in we driven was between recognition The prices. difference cash timing of in that the was commodity

was barrel, the barrel XXXX, of end WTI about and of a it $XX end the at a at $XX So, was March.

bit a it's are business oil the that inventory time our consider point down since in been the significant discussed impacts Gulf last essentially and we given And shipments, the Asia, to price a year. capital transit both and we exacerbated shipments had shut significantly, compared is especially any the that's from water change last And result, weighted -- cargoes how portfolio related because our even of time. modest budget. which or which this barrels not And because most third heavily other on on a to obviously, has our we've water mix bit of Europe AR the increase XX% to are our crude at then as of many the And balances to voyages, part, now, when times. midstream you pretty longer so for of export exclusively -- a more years, have the to longer quarter

of significant not amount And creating so or payables we're the spending. capital

significant contribution it, you together, to tax the you some combination will price it during put events the made goes so of and that when first the -- to ABC we quarter the first as start receivables with we look that payments those come for year do as top in property on. the like And out, coupled all quarter, so the reverse plan a then pointed impacts, of expect payments, pension we as a interest all at the of

Is to capital should QX it cash assume inflow, working a cash decent be fair all else -- then? equal working

happened guess what second price the to the I quarter depends also. going largely it on into

We expected it.

just the margins on business, is are the really And obviously, follow-up strong. chemicals

fits into a and we guys picture your are your get in cycle of the just So, that? business big view chemical how where

Yes.

storm start happy to from I'm winter how our do than both extent, which business, because itself. business, also the nothing some Uri, year. absolutely, at talk winter you had an about impacts to storm chemical has it overall the So, Uri excellent look impacted but the chemical to When some business

so March And in struggled production storm. significantly post

If you think much hurricane about individual impact an wider than had had the a Uri, in past. it

that in going on cetera, very going a And the And of still season year. hurricane lot a so has and inspections, into you extended restarts after difficult last et of month March. have

XXXX, in damage, amount balance a with already going now. though pretty supply/demand second very had tight pretty building products right end the coupled demand And that into year. the so a the we significant of are in high half And of of was

So margins already our PVC the significant demand into and going were year.

our first XX.X% year, about only operating the if rates of quarter the look industry, at you they're for they were And last as whereas XX%. XXXX, so,

the already has combination off-line stronger an the already the demand, tight up production with year, of demand coupled so tightened start supply balance. And the to

in Demand PVC now is of with range to starts the on emphasis right demand. that remodeling, so strong. housing strong, is case outlook, et rates, cetera, the of low mortgage investment is construction a lot driving And very PVC, expected

compared domestically to up last were which exported. XXXX, PVC down to same almost actually So X%, same period And the demand about being exports is XX%, the the period in amount of down actually that's PVC year. compared drives

guided, and soda we forward bit. seeing see our resin that of to commodity whereas And the is, half And like business in would then in we second balance. the year, expand – a previously anticipated soda start domestic we're we has would tight caustic Uri margins improvements in what start thought pulled caustic so with the we're when in supply-demand market, seeing we're to the to we able just bottom, we

And so move improve now we're soda as seeing we second prices quarter caustic forward. in the

the more that as of just we're getting year on. goes So

and mentioned, so expand And chemical in is the balance else. why significant much chain, process the the times something our continued going by Vicki see ability because us business really I as for just this with the it's about of that the a the the everything just and hard year, and it we with PVC chlorine is And chemical other out gives that business produce reason additional I benefit asset of we to flow base. it's talk delivered not margins a a more which We'll chemical and don't variability caustic can the soda these to talk people additional people cash turn on how a as and only the sell remarkable all. – it's about see it's lot business we're caustic business can the value value from of that high derivatives to at when of company the prices grasp increase other parts different seeing locked expecting commodity just amount pull. through a in is – it, we small molecules business. lot business. produce demand types why to PVC of why to value Brazilian soda And continues OXY's wood sell, that different. beyond construction mean, also We're in of in PVC's

ahead. Wai Barclays. go will come question Please Jeanine from next with The

just everyone. sure first Thanks I remarks. in Hi, Rob. taking your to want question. probably good for maybe My the question heard comments my I afternoon, make prepared right for

range important So IG to at on to gross for ultimately, status prices. billion think you goal mid-$XX getting the where hit I mid-cycle And to all. down you need that's debt, you think an that's be

what And to target leverage which $XX how just prior billion mid-cycle view remind for mid-cycle your us, as also prices? prices you was your Can at about go from this of growth, point? more there. jive three think I So with are the at times does trigger of this

that around right price used with to $XX the the XXs. at they by decks agencies, And they they now price so – current are in the It's close mid- high-XXs to being our to look a lot range. if don't not the Yes. being the They're environment in $XX. look of you are decks low of move their

at. a And that that makes location on where is difference breakeven so significant

be – a It obviously, different a go go exactly right? in mitigate the It's in into billion, of things in little So that. somewhere a or would range. things XX there's that be it but of it a remarks, is to of factor as – things lot but that. indicated But that. Obviously, somewhere to $XX it's my into neighborhood will that even little than that it's there's possible than higher it, somewhere could lot lower other

year. that though So based of that that the get that model considered year, forward move for deck for to times By your it's of price in the to be continue, that were or you investment the end to even and on prices second can probably going pretty oil grade. we're not below the close three half

it. got Okay,

of the follow-up on sustainable there's growth the of terms pieces medium-term -- There in on dividend. goals, moving a -- is in capital. terms pieces So a moving few is the my there's

have bogey we roughly Now a on gross debt.

take things? we the all of preferred, as got that coming do very as the debt. oil sales have well like healthy in. but And do for of time So asset trade-off will some are to those reduce the you We've how prices think it

at and off wondering debt paying So when versus we just revisit and our dividend other flow growth targets when profile we're can the new looking free the conversation the I'm cash things?

Yeah.

going remarks, on remarks, things, have outstanding. be through from looking reduce over discussed cash opportunity what to of debt. as the we're on put reduction that focused that can I as free on both divestitures work conversation will the place we is reduce to that And to type evaluating the between different a to That business, near-term that host we've say the ability into policy to It's But look established Vicki's focusing at to would obviously, the priorities. proceeds, to rotate those to the medium-term haven't I So in now and eventually from things two level. on our sustainable, using in dividend right that -- we might be dividend. going indicated need a be as using Embodied the combine proceeds what down and cost leverage take with like. the on squarely the what the priorities, to the get we're Jeanine, cash that, investment-grade flow together of

something component. that's fixed variable So of some it could be combination a and

decided reduction. that progress after at made we But will haven't more debt We on come that point. this on conversation – at the our

profile I that have, just right great add focused we with We it production business expansion. what chemicals would to this the is And really margin profile on that. supporting now. had production the that we're

we're that, excited about. of that's lots and opportunity have most for what We

be value expansion. there through shareholder margin So but continuing growth, will

The go next Please McDermott from ahead. come Stanley. with question will Morgan Devin

question. my taking for Thanks afternoon. good Hey

margin one, cost the remarks first in just my as old builds had comments and well So reductions. last on expansion kind prepared of, Vicki, actually that on the point, you on

you the deferrals expansion that if whether was winter or you Anadarko are reducing opportunities here? upside things identify that levers offset still some structure margin wondering the reductions. some identifying the to still cost to down? the the another structural that I cost structure said some you And had could room contribution are going forward, you of storm to as there or impacts. of of were think more the that in what drive like You of said then way, run as just is able maybe quarter that, the cost-reduction was opportunities And about more part comment transaction, on

in XXXX and I out give in our haven't we rolled one haven't at I'll data XXXX right. drilling between you're continue at our to Yeah, look and you, operations OXY and drilling. everything opportunities said through And OpEx. a thing that and cost. out we I $XXX logistics recently late it the what we're area to to from $XXX can XXXX. rolled went about And our think a took XXXX. drilling before, in XXXX Drilling global in is our domestic where to reduce our And out then in a back more world. we There's XX% we've rolled reduction an XXXX around for is, looking our doing I foot capital physics foot space, seen Dynamics up today cost example a tell structure in this back XX% And in both our in exciting cost decreased we performance we've the internationally in our That's had

Permian, And seeing only in using it the the us. things happening seen not this in we've so, lot is good we've it to individually in we've We the performance pointed it. And a River. Powder Oman now DJ, the but seen the of developed Permian, and in out improvements by proprietary process it's there

future. of it's and So that deploying it Mexico report a things good difference. near making and quantify started We've Gulf on there in some the the to seeing able we'll also be to here

drilling. it's So,

downturn, some what might improving. were improved XX% there. And we XXXX, say even in to before side, by we you drilling, On got we're not XXXX drilling it's people and From say will the that doing leave still -- I that. right now, I all the probably

-- the even is happening improvement today. there's So

year, quarter improved about we far only This up X X% by picking into it. we've So is this as were rigs.

how can is there a the setting we're completion So fracs do that's still what this working. and in doing many XX-hour side, so improving. period, for also -- But we're records is on we

for that is the continuing actually shale the seeing one we're extreme Permian work is And because a has thing other play. of us our subsurface of them been The in the every -- point to emphasis variation the team, on this of model.

be. or where working and to hard we started get to we to it that X about really expertise years our enhancing X So, subsurface ago needed

good also XD incredible driven others some seismic. more accomplished And some started taking doing looking and and -- at to doing to conventional what people shale And We others that of our do in-house domestic doing work. extended now efforts the that how our had of better. that of looking at the are team, and And with that in achieved were learned the Anadarko the some it play, we've was staff by people with things made and part we've that have seismic. what

where vertical So can we're that System phase even the a still is delivering we're get the into get in both you've and every and better they reservoir existing seeing Oman jetting improvement. better me, can each to process we're contact go too. do Oxy phase wells, using what what And in through and with wells better process, continuing of existing Jetting off call an existing in when reservoir and maximum can you of developed, trying you you are back jet to horizontal ensures they reservoirs, the the the and out doing, wells. of That's those. more recovery of better from out more that the go with

to the that facilities drilling continue lower and So, we on side, our OpEx continue and to cost. will side completion both I'm the side confident quite

even Our big and did teams it a way. do did to pandemic this are in it during and it driven

So, of worked breakeven a I they the $XX lowered areas they Mexico, they several some on in – really our think barrel. of by in hard New those that areas there,

considering going have we So know that's we what areas forward, that footprint encouraging have that in of the best. we all incredibly the the for

can enterprise know external I and thesis all being talks the us And an the that paying of on I so when hard beyond think that committed the Vicki I company why mean, and the you We exciting. miss things the I'd that, best seems debt of since just do is we'd there's think that we're successively we talking the business -- on. be in getting reducing of hear debt value to That's we debt goes through so add the But story into before, great But what to times, working at exciting focus value, good to incredibly all thesis. this that what wholly it's will of we things going thought boring fact that. that the acquisition. to reason for break down, shareholders. just do to other I it we truly and down underlying was the about, that going continue part behind externally something equity be. it And exciting the for could we doesn't our expect suit total fully translate about is seem we that understand the which

already, a And that initiatives. there. and to No, of all of, think and have forward capture the on lot progress maybe I a follow-up good low of know carbon definitely a some sort I I then times makes the of debt Yes. shifting sight one well. definitely story but And is focus the line carbon, as sense. few reduction

As projects, isn't what's at capture you the of point. milestones what FID to some walk project there? like looking in direct the one remaining to we can here that order on the financing of air potential us think just reaching But about including for project through from the these milestones and are policy this in we to fruition? sounds It Permian, bring

-- we did the construction Well, big step select We -- to our was lease. and to engineering ore partner.

the front-end FEED now, ongoing process is engineering. So

So now. we're working that

start next We by end expect to next year. and year construction have FID of the early

right some our So be weird schedule us, I barring would change that thing don't see that would anything, now. happen to there macro

in they're with to they're ways they they've is our ways Worley, put optimize team -- Our -- Ken what progress. designs along happening, teams the sub for as led already major projects engineering the a Dillon, as together have by as that done, looking to team are front-end

one, its I'm to how some going in design we're be terms able at is forward. so, you are pace first I do deciding to we people that as faster on build some the this a process believe, and And a surprising how on do really of and be around going excited to go There a already in things scale it. -- larger to

work end that stopping begin of right now. the year. -- next that the of is in do expect construction of don't I Some we there's that place. way will But anything And I that in at see

will from go Leo The next ahead. Mariani Please come question with KeyBanc.

looks on looks bit the your that first And it's it budget quite like share, to like just come a expectations. year. wanted annualize below in quarter below Guys, quite you a CapEx did bit number, it if

a get some of you what to there the kind was some sure that was And how $X.X and into budget? quarter just lower wasn't sense, if guys this first quarters are feeling maybe shifted expenditures wanted from costs CapEx? about driving Just or billion XQ other

driven spend highest will by and was capital have it ramp-up, quarter. the quarter of our next we Part

storms. you as part to be process. that's this if -- slightly parts, average generally start-up And half of the the a it's be of second So, a a then about activities first delay -- will as is going spending, little two, mover speaking, the But some of we spending a maybe had result on of half the less. our to same going bit

moved So, QX QX. some from things into

That's very Okay. clear.

said said highest. would next QX Look, our she what Vicki quarter, be when

Yes.

spend. of quarter Highest see only we with that can in its billion. you of million $X.X And the couple a first spent where hundred Permian,

So, you that. can definitely see

And Okay. quarter. a question year. then first That's just a the very midstream strong clear. Obviously, the on very for

the second looking prepared I this terms comments. look you loss But just a the release explain loss, of of loss, second it's Can at you're quarter a quarter some When kind guidance, half kind one. If still second enumerated very kind expecting you're of at it, a not of little your expecting, the at why call let's kind quarter in in it, year? expecting you and guys of reasons benefit, You year of there the small might add what a bit just the expecting the midstream obviously, breakeven. a full press loss, look implying When I be dynamic you're the significant XXXX. roughly I your large first in just loss. big guide, later of midstream

Leo. Sure,

full what And quarter, million. we look our you're we if outlook $XXX raised if then understand guide by at think I I beat the the saying, million. first year you $XXX

remaining last expecting the driving our basically, oil And we're basically, differentials is view what's on differentials. quarter our this quarters. export $XX So, on about of and that a to on three gas quarter, deterioration million

before, look business when so going a better, I get it we realizations that midstream you at and -- but our think because hurts upstream and have the on. our helps bit differentials talked business collapse, piece if that's this you about So,

benefit QX through year, most remaining driven and the the quarters, you that the of collapsing. for change a of get of bit differential the little by rolls So, primarily to then

Thank you. Okay.

Please will Dubois Générale. question go from ahead. next come The Raphaël with Société

about to for much you very my DSC intend plant you question. Thank the FID. It's Hello. taking that

issue with very calls what And you conf mentioned caustic caustic share maybe through be to You this this first of forward, looking will soda will technology? ago -- you that a required to deploy benefit soda of it for be do how you think couple OxyChem. access us Can any quantity could plant?

this I attack soda. unit of first direct Vicki, in say can fluid is would I kind little of -- air so and a But the all, capture bit. caustic the caustic not potash, working

first So, it's air be that what might or moving or AOH, forward. the but fill volume not disclosed utilization we NaOH, unit capture haven't first like direct

Yes.

it. still Just that we're and of the to still phase repeat, in engineering optimizing

So, we year. until of have would probably not that this end the information

of majority the the which mention would a unit. the unit business air capture of goes the PVC I is direct with that inside is the thing is on amount air the the synergy infrastructure direct piece other other OxyChem inside The there's also to actual obviously, PVC, you capture

you for very the Thank clarifications. much Great.

from next Paul question will ahead. with come Scotiabank. Please The Cheng go

you. Good morning, Thank guys.

I they're into competitors going about more one to wells. Permian, miles your in talking the move X of Looking think

that the on to for talk is also, trying you're plan something your that guys COX you that side. or in And button about unconventional that were the suitable don't you? curious in do Just you you think

think inventory, we're first inventory your is the at looking So here? of question. your what you percentage that applicable in that's prospect So when

and that is of reach Oman, down over Is at maintain you the for Gulf operation? and to $XX your are you that point once would steady, production the second trying you relatively to there? billion still or The Algeria debt that grow Mexico bring range, just trying what's objective your mid- question that some

asking you for could mentioned competitors just were if the we doing first the And you what you our were were clarify asking are that Paul, again? same. you Hey, When Could question, clarify then you me. something. was that doing

they the lateral miles one X of competitors length about least are feet At talking that or your drilling well. XX,XXX is

to push just don't is that for or that use your is you? curious guys think it's for capital-efficient position, X miles and something that you So the applicable to found given productive

that should in an cases, box feet's not model. a to think always really think into answer. important all that engineering that put do I feet's to you right think it's right X,XXX I yourself answer, the the XX,XXX

design X are be the acreage your look allow? versus really scenarios that there of right the cases should situations maximizing or You what drilling for there where think the the feet? mile what wells, than And recovery So what miles lateral at X and XX,XXX. from and is risk position XX,XXX may where longer I does are

really to acreage than intend you ourselves. all at how XX,XXX, two did least XX, lift XXX complete into drilled your intend And other of what plan, we how you depends – cases, or the of those. position, your the reservoir they XX,XXX. kind intend We it, to that In consideration on didn't use. fact, it you against more to one the we've development In have drilled artificial go the way I but and to you fulfill take to things think

involved. lot always It's a wouldn't are consider variables I our never But but of wells – wouldn't that doing evaluation, we only anywhere under drill there So horizontal Permian, I wells. certainly the would again. say we XX,XXX-foot not in

well. there's And the respect developed COX recovery the expect the as both the use alone, with And in the COX oil wouldn't unconventional. the we And billion barrels it then with we So shale to could conventional or of of conventional out. COX, much lower cost what in be be additional resources in we expect no and future. that enhanced to X rule to

that. excited we're about So

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

your just day. I Thank want for great you to you, all and participation have your a questions thank today. and

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

may You disconnect. now