Occidental Petroleum (OXY) 11 May 222022 Q1 Earnings call transcript

Good afternoon, and welcome to Occidental's First Quarter 2022 Earnings Conference Call. [Operator Instructions]. Please note, this event is being recorded. I would now like to turn the conference over to Jeff Alvarez, Vice President of Investor Relations. Please go ahead.

Drew. you, Thank and Quarter everyone, for in participating Good Conference thank Call. First XXXX Occidental's afternoon, you

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

especially as us adjusted this return proud of calculated Thank employed resulting Jeff, reported our a you, our adjusted decade, of our earnings. XX% performance an enabled operational in We're quarter and to financial generate in over and highest annualized and good earnings everyone. with capital strong results on when afternoon,

reported our support record longevity. achieved in the increase free consecutive of compared fifth plan a capital executing level cash flow The for cash began on last we flow quarter quarter. as flow to our was cash XXXX to free also We

of focused have to $X.X Once return of we of an $X teens. $X on we over this sight billion As continue remain return $XX near-term will on the repaid shareholder the meaningful a -- shareholder debt phase additional focus a reduction shareholder reducing have goals our will to this goal has as we billion of will our repay to return will debt this debt debt advance of detail we few our value phase announced our first target our we or the We the focus detail billion When debt is made repurchase progress of We framework. to we framework. milestone, billion near-term of until towards framework program. billion. net we in share complete, minutes, we debt. retiring we face line principal $X When of to been year quarter as high part next billion last the of our expand achieved the of reaching achieved, $X

to we sustainability expense During dividend interest to our I the earnings an appropriate outstanding, that first the the cover debt, dividend it and most managing with us the will our updated guidance, for increase This sustainably performance, shares earnings. and increase throughout guidance in which our lower results Midstream's recent positioning of includes time. grow XXXX our about of our call, OxyChem morning, support importance number a well lowering at while our Continuing as quarter of enhance will financial as Rob cover the can to combined will cycle. operational spoke

quarter In results are commodity excellence $X.X quarter, billion of and the portfolio how first high more at is decade. a in generated first XXXX, in was of quarter what that than This cash our first we Oxy's Our position to of flow over which price a example level twice shareholders asset highest flow. benefit free from environment. a cash free our we generated great operational of time the

in million with company-wide we continuing quarter guidance operational delivered spending per -- approximately of control, financial and financial total and disciplined combined $XXX practicing our commodity day, strong our improved prices. allocation position the performance, by from capital line million. capital spending Our were BOE while of results exceptional delivering higher benefit business, driven Switching first operations to performance, production of with cost and X.X

in the expect completed in to we the international to returned increase has quarter. levels. normal quarter successfully operations the first second scheduled accordingly turnarounds production quarter, international Our Compared their production and to

outperformance higher our are be expected Rockies Gulf expect lower offset sharing the impact prices by production under to our contracts, fully we Mexico year While businesses. guidance international in full our to and of

As to from year through the performance continued to XXXX OxyChem of quarter, chlorine investments as to quarter exceed as robust second to contribute our we the line year production expect targeted with earnings year. the PVC business sustained our the XXXX OxyChem's this from grow another mentioned benefited in record call, previous production end and the which company-wide we the during I capital the markets. last record in expect expectations caustic, business. for pricing being delivered average

dampen fundamentals see continue to proud slightly the XX market in and supportive. to our the potential awards the in Following Midstream Chemistry care responsible year, American sulfur performance. was for Rockies half we quarter and sales. ability gas safety driven though who several optimize Council recently primarily of to the margins second export facility for Marketing the workforce first I'm from from received outperformance compared remain OxyChem's record the the conditions of XX consecutive the Permian and guidance quarters, long-term timing the XXXX gas and transportation processing to and higher in of very and sales by

results for the serve the strong catalysts talent our financial improved pleased commodity opportunities our first of difficult quarter generation. demonstrate of a to cash provide continue as to free to say predict, position the assets, short-term advantage full markets midstream quality our solid opportunities they flow such of and taking how when and financial are arise. results for the that While team in of teams, I'm foundation our

the year. full next with involved Al increase a is safely in tie-ins progressing project. planned online these Our managing we as assets. Al Dolphin expansion turnarounds planned shutdown The We Gulf during to our over the and teams of efficiency maintenance the be capacity projects Completing quarter. planned middle Hosn first did projects and The time to related turnaround which plant in maintenance the and projects the XXX expected Algeria, completed towards of the expansion of of job turnarounds of this reliability increase the Mexico. an and series excellent Hosn completed

online business well perform XX brought longest yields pad performance. XX,XXX with to ever first productivity with strong drilled their well team lateral NGL to Rockies feet. their date continues driving and largest and quarter over higher-than-expected at wells Our That

Our Algeria, to bringing And with development operational team online Midland market hookup for had drilled the most many of first call. XX,XXX-foot our in time we our performance. XXXX in quarter. deliver success few the recent XX-well earnings mentioned prior we the and the in similar teams Basin well exceeding on completed each development to completion These just the significantly a are achievements continue and Oxy's

emissions. operational to continue on we focusing new ways and to addition pursue resourceful improvements, to In reduce

Basins, successfully trialed and in-house new Permian on pathway. example, help a our us system X that methane detection DJ For we in will the net

similar We to water you through our systems guidance. first also the recycling and by I'll call and partnership our additional year. turn of this locations results over to will the on quarter build developing now plan Rob, walk success who

afternoon. good and Vicki, you, Thank

Our net including cash April flow targets, reduction continue debt last billion. debt first flow paid On distribution free repaid of our allocation of the call, quarter debt dividend. $X priorities additional common first cash to debt increased to our in reducing in detailed the repaying we and $XX and billion near-term direct an as we our

of and $X.X in value of of repurchases. first of in $X.X the of $XX.X balance significantly advanced call billion cash unrestricted through a was quarter provision net the billion offer, Repaying accomplished a billion. $X.X and exercising debt on a market billion tender note combination the and targets the open of debt million quarter with $X.X $XX.X billion, the first our of repaid ended face these meeting towards debt progress debt quarter. approximately We Our reflecting

stage, repurchase debt our and come debt When quarter to allocate will debt near-term transition to near-term free intend Following flow million is quarter. to approximately complete repurchased debt repaying additional end, open we debt a primarily reduction and then $XX.X we this billion sustain reach cash lowering as position shares, this our teens to level due. and to reducing will reducing better investment at approximately dividend we the proactively billion, debt second speed which continue gross debt we expect our in lower that return retired the to It a balance as reasonable we lower debt during We Once targets maturities and $X addressing today. repurchases, to $XXX of share to billions. gross to believe grade greater is they prices. initiate we we in market us to from program target high

major debt our investment grade, receive we the a and credit upgraded rate Our BaX the to Moody's agencies rating positive ongoing All notch view as earnings in which efforts reduction continue recognition. as our credit X call, pronounced recognition of now to improvement debt Since below our our of profile. positive X outlook. range last with credit

of environment our In adjusted quarter, robust our an of the with flow combination in adjusted improved results core operational cash decade; and reported of strong per profitability announced EPS highest top current are the price driving legal consistently filings. adjusted share, mainly between reorganization diluted on entity free $X.XX generation. described a commodity we The profit our first quarter profit profit Our and for by our XX-Q in difference in a recent $X.XX the driven per over the diluted reported and was most XX-K share. already

of expectation. earlier earnings was in $X.X portion operating earnings prices recognized to our with our our federal deferred cash We the reported expectations thus in remainder billion, This strong U.S. commodity the large-scale for completion existing liabilities in part was ahead earnings our our quarter. due of first assets, by the of tax divestiture which program over generated a the of the and approximately post-acquisition reallocated basis paying resumed year. Following the tax was to quarter, the reducing in combined the taxes quarter, and for

exhaust price operating expect most business to of carryforwards net and commodity credit we this general expectations, our current year. U.S. now Given losses our

credits currently this to and amount cash the NOLs paid year. limit remaining the have However, we taxes are of that expected

in cash quarter, quarter prices payments resulted we to XXXX. million a negative change generation. compensation in per receivable cash averaged would such WTI taxes earnings property commodity quarter example, flow working working contributed payments compared free barrel $XXX payments approximately Negative benefited price and capital U.S. semi-annual the tax interest us The capital as to plan. under the improvement previous which typical environment also higher first accounts strong also at demonstrated driven was in The during to and increase federal change. payments, For by expect certainly balances, annual commodity as in our $XX by pay

due case quarter. the of the during the was are first stable the and see commodity made the reverse subsequent partially in the we if working prices in accrued year As being to for capital potential change payments over year to remainder XXXX,

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

softer of expectation guidance the in the possibility in fourth Our OxyChem but third quarter. product includes expect historical record the later of consecutive the for now strong fourth prices by recognize revised still exceptionally full be year, We quarters earnings quarterly a for year and standards. second the to

business mentioned, continues well. Vicki Rockies As perform our to

the continued of provides discussed we've regulators BOE how for well been year expectation state's remainder the the process. year, in the for rig current with XXXX. program have of the approvals. drilling guidance communities and previous are of per no day. confidence given performance full over to the with in On year strong is we new closely sufficient this to calls, permits Our by state X,XXX multi-rig Colorado we've hand working feasible Colorado raise Rockies implementing to us run It single remainder for permitting a us of longer pace a for run

plan to X,XXX to reallocate development appendix of year. is the cover plans of XXXX slides in plan the activity change from months impact activity coming we domestic days. result, Permian our that will our Rockies not in to activity half earnings the included the the and production in a This submit over We second the in presentation. rig As will

more that and expect process add this back we early submit the years, the new gas us matures, certainty would process activity become for will plans given provide We it Colorado's continue with are the on Rockies hopeful development oil in in year. as Regulatory to to permitting to option future efficient. in

X,XXX our mentioned, international Vicki we to oil full full adjustment BOE While included prices our is and impact of downward higher year a contracts. reflecting year our have the guidance as per company-wide guidance, production day unchanged, sharing

incorporates operations, that XXXX. our approximately forecast these compared of at changes, remains the We Inclusive for mentioned a on of call while The guidance Brent, included guidance in materials last United capital inflation cost increase. million XXXX guidance especially services revised has capital a of and billion. $XX XXXX budget for Brent to $X.X to onshore average our billion States of original necessary our $XX reflects $XXX continued to price for activity $X.X XXXX. Our our of

But may contracts become working such our our for are our inflationary price COX have through near of business the in WTI We pressures guidance continue, Certain in capital top OpEx. efficiency. year. index increases a end as and adjustment to pricing to full the this domestic pressures spin we pressing, if slight leading labor additional EOR guidance offset upward year purchase

pleased scheduled provided quarterly establish with to turnarounds, quarter down cash strong With update a and completed behind shareholder flow. comprehensive a are have our return pay XXXX. set us, corporate low our debt, we We start earnings and framework, continued to on new strategy records for one

the to continue shareholders for will now focus on beyond. to will value back Vicki. this We and I turn delivering year call over

approved, and annual would have thank towards achieving ambition. if a shareholders I our with to counterproductive our work that, been like net we as meeting Thank recent Board voting for would proposal you, the our at defeating X Rob.

long-term short-, the the and Agreement. X directly X aligned X, Our of goals for goals emissions and Scope quantitative are medium- Paris with

leverage market as in competitive our and X details presented strengths our carbon plans our underway, carbon market that including before X our We management a and of opportunity March our strategy. we update to deliver CCUS. business fully Our and strategy a towards on achieve in business net low leader journey XXXX. carbon With to capabilities climate net management, assets provided and the solutions

deliver technological that We emission our solutions are chain. value scale advancing and throughout rapid reduction the can large

path helping X businesses, for ourselves for to accelerate the companies in while our other and strategy Additionally, value leading net low-carbon existing time, the to industries. multiple creates same our at

open now for the will questions. call We your

[Operator Instructions].

with The Michael Scialla from first question comes Stifel.

Rob, look you quarter. right you where can priorities could flow mentioned you cash for potentially any thinking term. buyback of give commence beyond year, longer you're based what terms that you strip as of this the prices to in indication on Wanted this the the now, see, free are

Michael, for Yes, thanks the question.

point. guidance XXXX beyond and So this at for we haven't any provided

priority what the balance on cash would apply gross high that then the was to and being $X $X notes we think as I the that billion debt teens, -- complete we've that year the into down as the and debt to translating additional it reductions the debt indicated attack billion driving and in any this basis. the anticipate sheet, comes a more balance the we the of

shareholder of would And the and the so towards in priorities end priorities returns will XXXX our other imply and that of higher move the scale. reshifting beyond, such that

see Okay. debt the at the the cash reinstitute return longer Understood. I rolled part And I to as program any shareholders. know the dividend of Any to of Or your hedging hedges buyback have need any things? any off to the targets or this point. need reduction program? if Do you guess, protect you of become flow term, those over to free -- a protect

No.

as history been adverse. So Michael, our a company hedge fairly has

built-in that produce there's just entire the create that. and the our would price differently hedges combination of move with that our has off a of our ultimately from we lower reduction we've much deviate sustainable environments, to commodities it and had cycle chemical business paying then, value best the removed talked certain other I with the did the those international debt the about shareholders coming receive, business, the if cycle. that price we at because some sell throughout and business, a XXXX say belief the also, certain is Our a in in that. creating will out, the the of of company for towards will receive of the Since amount driving that midstream pieces to moving and of combination operate time. maturities, And We at maturities little due out the business of that other due some we

decade. and And the of have towards attempt any the pretty so us try I mitigate going particularly of balance see mean profile don't we for those I hedging, risks. to debt a to now,

work first move towers we only as that that billion, the years, and 'XX 'XX that a X With have focus quarter, forward. we in that be the certainly we will any exceed $X have did and

see is that make And our will risks low for I outlined cheaper So really of Vicki last prices. as the mitigate don't dividend meant The be to share low on hedges any much the forward. approach at at that sustainable moving us. to the call, need for repurchases prices dividend

hedges. So I low think we're having the from price artificially business doing the right and things to protect environments protect try in without to

Barclays. question with comes Wai next The from Jeanine

back with or can So just start prepared next. about on Rob Vicki maybe remarks going on what's either we your

further debt to sounds beyond first returns of additional wanted commentary cash parallel. sequencing It billion gross be that just will and like incremental the your beyond $X returns. in we from not So shareholder ahead billion debt the that buyback and that, reduction clarify the reduction $X of further

debt different easy free I cash versus pretty so guess, And net flow. reducing pretty debt gross logistically, that's given your

long So in what debt on the do purchases. for color it achieve open gross for target think market teens you you take will high see what have the see the market and to tenders you any given in you how

Yes. Jeanine. It's question, good

think complete the of in last purchases. debt tried as and is we $X convey that would I laid share my to initiate and then -- I reduction out billion what the remarks we quarter

rise repurchases we to in proceeding is quarter achieving treasuries, be reasonable expect a share in And that that the that simply to with during going heavy that a the not provisions, et that as at today, the on where market combination we X.X of are we being tenders, I we cetera, repurchases, current based the think attractive in of anticipate and during lift the open have are demonstrated, is because quarter. all make-whole environment QX.

able those The how and share pace by is to takes we're And bring retire really repurchases complete shares in. at the to stock going be so dictated the the obviously it liquid. very timing is to which long of

We have the that and in we at most mechanisms applying sheet most would do the would current for the shareholders way disposal, beyond constructive acquire We're pieces cash we certainly to different it shares. well of that, the process our balance the is going those in between lots programs, the which back bring environment process. the we to that those have balance billion cash pricing do actually available And resume have suggest of the would to year. a to value above in $X X of

can apologies. it My debt, you high-teens okay. that referring Okay. but we gross That's Thank offline. for to I take getting the was to clarity.

question Our growth. thinking can like How you about medium-term constructive it that the enough and environment, the gross is is beyond sheet paying target. second you price maybe on debt and reduction given are growth either/or an just XXXX, production both? kind Is Or enough, it down debt? improved growth do balance on is the of

is Well, I certainly, healthy our very, time think to to going that by get XXXX, balance be we sheet, believe, started. the we very versus where we

be billion $X every -- dollar $X we has year. go the above billion So And as $X the this that have $X billion beyond to Rob to including the mentioned, of that's the billion, repurchases expect cash $X the able in to billion. share

above So reduction. debt go to would any free dollar that

going So we that we the is progress we have for a the going result always production of to make year. that production respect that increases this we rest do this year. And of put into are in significant with With place. expect to increase XXXX, the throughout programs to XXXX,

in we'll most said that development between and and see that the And beginning we the as the lay look we next that. programs so be to going appropriate to of what the let into today, the know But finalize and place no uncertainties the year. deliver could before always as of And to for value. -- able we year it's heading end that, toward be at X%. you see And macro we've the you the growth as present that this do, are pace year as determine we XXXX towards

Deckelbaum comes David question Cowen. with from next The

growth I around appreciate to next additional the I question an time. wanted ask year. into

barrel 'XX. Specifically equivalent towards implies gross rigs Should into ramping to your by we almost think XXX,XXX that the growing Permian, XX profile a guide you'd day there sufficient end about being of to XXXX? obviously continue the that be

David, this is Richard.

Let start with that. me

translates is of second year kind through I'll talk think how to maybe answer into to cadence the year. I half the we and that how of try entered second of the that quarter the

And We really quarter. landed pleased part very So first time Rockies, a onshore also for the and beat final the weather where a supply on contemplating U.S. of we in of specifically but Permian. that that chain the industry certainly then in the really, part and the in the that with provided the bit had at some event challenges was recovery around guidance of uncertainty saw. we the

where we able so an the activity the to the quarter very we quarter. add fourth plan, we pleased And first first the started in we're landed rigs into in ramp-up From quarter. that

are So the rest rigs core a really near the and the frac X XX first year. We're quarter. of activity at for in level at about

as pace. I to the we was about think market importantly, think this, time on

online, better actually increased and total by our quarter XX. so wells year X And finished in the outlook we first

was March the us continue XX,XXX XX% of going than wells and And to was you And about that February. the sort I market that this think to as quarter then for better time But second back on online in were year, of growth the March so first inflection half and pace. late into of a March. deliver day barrels below of really that, quarter important the think very to

very with So pleased again, that.

ramp Sort of transition. and up then

completion cadence the from and to year go I you second in the into of what back state last more would a transition really If lot in of about year. a and back half consider of quarter the much Rockies, carried steady which of production was this I the drilling the call, on really next year, talked a DUCs it -- into we last lot think

that. expect benefit from we really So to

with in add not XX our rigs, -- overall, the a at because can really of you when the hit same about rigs as the a deliver for big the in so hit back really and And quarter, the is But stay our think really us Permian, of Rockies the of to XX we really this Delaware, change a about drop net rigs, this area mentioned, to the the year. half couple important net you start the we growth. second looking

wells the online really quarter, the in that that the to about half XX. second increases of the were first that XX We quarter, quarter. goes And about year, then XX have per back

feel so second the last to And in the at XX. delivery Delaware. Delaware. about be In about that we of going will had this good year, the back last Again, half in schedule the of X.X rigs half year first in year

And so then back for the And stage the completion state again, year. of we the the of next in sort was enter half DUCs of scheduled went as from online full recovery. steady the drilling, that we'll to really

wells And so are online coming is the good very those news well.

in of barrels quarter wells the X,XXX had think the Texas they wells first and the out -- over a I averaged all all I I online think on XX IP. a that we this Delaware, pulled day average XX-hour morning in

on thing back think X% to base that better think the would as had pleased were year time plan. they're line, is part of And final is of So I productions the we say, we base. Rockies in line. the than really about what then protecting in And beat, I we in half the about market with, real the

better. lot so base And makes protect a being to it able that production

really and at takeaway in WES sort XXXX. well look look flexibility our look to at good, look then to sort beyond strong performance and position time of continue you of at the and portfolio, uptime been on market, with work operability, to you able you we when So feel

trying so do what And derisking to of final very important. really component we're that is

to ended your about you -- are good I this we think I year. where on land of really So feel where question, we think, kind we

given the got and I and really year, the year is what activities half think do be capital conditions to to we're needs as adjust next for the macro trying flexibility what development said, program the hit and we've company. really as to what of Vicki hit plan right the back a to in

any return we where I then the around get I tranche just timing of debt the looking I question my capital would Or paydown. the should but sorry through capital got you pay point, get you're Robert, down next get incremental the of the and another understand correct, with that tranche appreciate get down as question, about buybacks debt into dividends? return buybacks and you think of mid-teens, via we you that that my worth it would the once be back shareholders you're of might to I'm values XX% it, like agnostic the -- as that preferred quickly paydown be follow-up call sort of once another to ask to debt notes? sequence delivering, to If how as preclude long a cash belabor of to it. of teens, triggering beyond to want free on, and you be would

Yes.

at consecutive obviously, the share quarters and the course be add not flat level going at triggering the X if of you the you're $X Berkshire quarters, to per consecutive quite those billion as trigger. preferred so the $X dividend that at of still of into are share So preferred look repurchases cetera, -- -- X et for the the $X.XX or

$X down And on debt goal debt place the going several There us go that commodity that a on so in doing get as once they laid prices. billion, metrics we've the being gross today very do our need X that the agencies to intend lot with of again, to would certainly investment to they're what continue relative we rating and with -- are debt to to into the of one out indicated, where based provide are well conversations grade. high beyond we've reducing know metrics for to key share teens, achieve that we're is other these we based points on to. We we repurchases, the

to to And further those that a more make help price be moderate constructive metrics even in so continue will progress environment.

to reason those investment-grade achieve the important very the us repurchase. investment it's back We beyond that's metrics. type to So why we're think the about that get status for do talking to debt or share going

of And we're the a more I the at as potential bringing strategy year. Berkshire a more Berkshire a of of more would is this driver strategy as product this of than being year look so the potential

being about find metrics, and with constructive investment-grade a you about. those we us investment commodity laid We've We've ourselves the consumer out debt so in And we're And could the returning comments, we've targets for constructive more it being shareholder our Then those targeted something predominant a I favorite lower as to the the you Vicki of dividend we business, -- repurchases way think transition value agencies see discussed we returns. beyond that through laid position, end the towards that us, in and a as of having in discussions talked achieved make share price that generating type the because being from dividend environment. price does that to are environments. and cash both got up sustainability for increase beyond out before, we're of away is grade. shareholders the those I

sources know warrants. We have that there outstanding of dilution. We are also

common We of shares as also issued part acquisition. the

the in prime the nominal Berkshire. targeting make do in the way us it. reduce repurchases provision increase for will XX-month So to share period, it a automatically it's trigger a we And of if

cross So choice trigger of If do and to you of we it's the reduction the the X-hour the threshold, begin we Berkshire. of preferred. want not a Berkshire will that process

can in May, position a XXXX, is that here it from goals, these in to be but forecast quarter cash accomplish away flow position going first the where sitting to our January we're in if we Richard the us in or Berkshire begin today position puts X a not to months of principal so able of and returns, in of a described where discussed, Berkshire the the would being optionality, exiting be try that. we you of process where reducing and production shareholder to through the doing additional optionality trigger the year And similar in the

right costs very And business the in we're and how price for of this achievable, to the ground so right environment suggest -- us The very terms in process. cost prices strip driving get we The and things commodity have some down now. there. the out in certainly keeping doing constructive current is the is

year. a with balance for business going the not setting our performance, But we're successful up quarters to things or increase what flow of Chemicals do happen, after it cash forecasting this. that. we've be on all very big with principle our expectations are subsequent the cash going our at puts in us the if away to think that to in that, of I And point. Berkshire share combination we the returns, would are what us portfolio to So the be those you share quarters on the We're provided from where do in all position

comes with Matt The next from Portillo TPH. question

X delays be And Maybe just hold you the perspective the provide I a I permitting if might able curious of out seeing? the from more you maybe and you process around bit start DJ, to for you're to hoping was what all. mean XXXX, rig some little might into well was on a context then count that

let Matt, I'll Richard Yes, take that.

progress we we're good Matt, feel then permits. about about this next with the so our thinking year actually making the to year, and DJ

we've the stages XX allocation we decision of -- I We've got permits XXXX. think sort another are in couple that the approved obviously, feel system. approval, the across through of have about X good program they're we're larger I got rig of pads got that a that rig to move working where in really We've part fit permitting well a year. next Delaware the a really development level. plans expectations, And of locally in say that technology into the mentioned wells place us the both I thinking at. We've over into and to lot comments, of another our we for of a the to this. some in state improvements got are we will and is think are think of at that take allowing got but various that I to prepared engagement, we've get lot XXX sort the to the would things last about then year,

getting capable be of we back level into perhaps -- we really X-rig as really, even to So year, more. to would go next and that

for look started responsibly, of us year the challenge is develop is where And very we very it similar to count. best DJ work we want to states, together are with the that, count perspective, in with be this for the obviously But when a portfolio. so from local we communities, within plan could well to we us for to the terms wells put do good develop some But the can. our work prepared because those

a Perfect. question. operational follow-up And then

and perspective see cash to a of the wanted the mean what asset Just great tie-in a from little able generative years company. over It's if flow you to Gulf for plans for development of a spend might be might bit next the couple that obviously time production. and about of Mexico development free talking

hoping on forward. was front just bit little context feeling you're get a how more around I So to that moving

Yes. the for what doing few feel We years. really in Gulf still Mexico the we're of next good about

talked enable working the or at and the the pumping recently on and As see. fulfilled structures that and a to all of subsea we've additional look opportunities opportunities started based Also, we subsurface about development and development production. now that we've some we've some work you our we're exploration doing high-graded know, will success us already system that around had the that increase rescheduling on

So I permitting flow there assets, we cash continue the few have we think, the years. over capability maintain the that certainly, to to next have

that executing that we'll on of of Beyond success year the the some next exploration early this and depends be year.

from comes next The Goldman Mehta with question Sachs. Neil

that chains relates that the be proven and around questions couple caught especially pumping. I out, supply made And a in lot has of guess, pressure that would relatively as the that, were had U.S. around supply And it you a of comment U.S. Vicki, to growth. press constraint some March, had chain. on here the early U.S. a I producers in

to it can latest you around into and talk your the evolving So you relates just constraints of see views view U.S. tie your the from this how and as that here macro. about oil

And purchase. was Yes. on their up in definitely lined didn't place who their related materials already don't my and have already have to plans comments that those to

So And very would a worldwide really with Permian, challenge. capacity that low. since with I there's chain a have point, the then but also not time you anybody our respect And that. been to both are been and couple macro, inventories where supply the the industry to very at only in do increase I've in activity don't trying this to think difficult time able being spare

production time, if anything almost that are try but can And there to been they to to you trying worldwide. it's destroy there's I value, companies as and we lot production, increasing as now. of don't never think value been think a So a destruction headwinds accelerate can't hard have increase I either that of

longer-term can't because the the projects started of some of just get involved. And cost

plans to I'll of of place Now in impact for are but other those had detail of Richard in those plan that done place of the companies we've have plans us too, able some in had that early for that the of place, and enough, let this that. us been some and there mitigate inflation, this and

you Sure. factored perspective I'll details this like just plans, where had we from give a onshore the said. few our into U.S. Vicki

really certainly factored good budget. if XX% outlook of that. had because you up seen If capital and contemplated to upstream those feel we we capital sort had quarter, what We remember, you of still our plans our We importantly I'll our with online go back I'd But first speak time range. us of wells a in was inflation most But for quickly schedule for couple maintaining One, things. to operational critical. that that within us, efficiencies uncertainty -- importantly, very mitigation. on market say for in those in

trying capital. hear XXX%. about I oil some mean, with lot year, an had country inflation about We've our that partners big the meaningful. that's protect ones see And to knew to into going we're continue do you'll goods, us a to service But we to X have. perspective, of so that. work talk And from X% we over what and the It's

able bit the really in of We our work today. to where our I that white we're had well that dynamics, where supply, situation. about that's from price but online a of Permian that regional first with able that good quarter perspective to schedule is supply in any really good, able so And been been and an the and we're wells maintain think to we U.S. think is good the We that worked impacted development quarter where on was didn't meaningful. design. into We've more and there. the supply. first through industry felt that teams our feel little is schedule, based The to about in both we and disruptions one be at Part sort manage designs have

the sand other The primary is our supplier Aventine. in use of

terms storage terms for very became us in facility So of we're last in again, logistics that doing. what helpful of and mile

played and this. a our And of sand strategy service The more really again, for was so with last think thing that to integrated bit We with that appreciate, back us, our frac I good. partners around we well providers. an moved

included trucking And sand it to fuel. being so included that supply able sand, but and also

sand both help so from our that able of then moving trucking and fuel we some a Tier And providers from from that logistics, X fuel were our in perspective frac mile use a supply. terms perspective, of last get to to

we're on in so locked year, in that for out for work our but the the feel And played very price a mostly did We decision very played of we like us. service good with we're out feel that well like well. rest position. We and partner

see trajectory pricing how see downward side terms profitability be the bump the guidance still playing the to is year? the year, And think sounds It in business. Can income talk through bit the pretax about if like you comment understood chem might a the strong of as you of on of a we just the but I the guidance. year pressure just around some out. Nice follow-up about here little

would be around great. any that So color

today. I where guess I are Neil. Sure, your answer question Yes. by we

are our escalation them prices production leading which impact business our rates, indicated as soda don't Asia, only accordingly. to increase of reduce business. in So from caustic and still chlor-alkali really benefiting because the personal the in and very vinyls of -- both conditions from is their comments, the That's our Ukraine prices and our that. in not strong you sales, of Europe in operations sides operating is also impacting but We

strong so domestically, that, side -- on the remains vinyl of only the not And business. but the business very

but pretty of the but last XX.X% bit, that lot year. the during were not typical. it lag the year-to-date might a would But to through up outages which these rates first operating you the been estimate versus by was in might as domestic March, which reported controls is first that during due as demand quarter, think industry there's year-to-date, be, so high in And we industry XX% a about is occurred quarter at

is being a based In for fact, pent-up relatively through for construction. PVC, the there, month right single was highest demand And building products. demand still decade, prices in domestic on despite the just it's is high the and domestic pulled what for U.S. for reflecting demand the that for March value, demand historical

than that's some Exports higher that were last U.S. the this time March about fact year, is places higher in gas that sell -- they and by ethylene are prices are business. the and or ways, for internationally. PVC In overseas the PVC X.X% opportunities the last So great there's being availability. exporting reflecting to impacted

for the business. constructive So that's all it's -- very

the the ethylene a world. as energy, advantage gas, cetera, versus export and available in simply because it's rest the the see on U.S. sector, of we cetera. open for as so that year, very long favorable of certainly And housing et half demand being resilient the business being first And of et

So PVC interest business. constructive. impact starts, cetera, et housing Obviously, can and demand raising rates feels that on

anything point. is seeing news towards of sitting a We're falling the PVC. And at and May like getting else can strength the impact that off. so more the interest suggest month not housing We're some starts that's one fractures everyone Fed uncertainties. here of hockey on demand rates regarding have those and of in in would it's the corollary

half And second so the in the on we're trajectory clear little a year. just the less bit of

outlook business So the for more see a you side. cautious little

the caustic as don't things, operating it's of people industry been get -- that amount we of in in more of side a the because participate the rates On it.

-- and the And issues. had downtime unscheduled and and have scheduled railroad some we're been in an all with the several we had that dealing industries but -- during logistics but or so issues producers estimate so industry other first obviously consumers the the production majors And of would year of issues now. There's part as downstream rate far. somewhere right

in home right there. just very like in The but core cetera. just the fact And And the business, advantage obviously, sectors, transport, spending of whether the They're taking here being that all rest products goods, up high some versus strong the is products. Europe U.S. like pricing so travel the as a our of still opens products construction, and world from now. we're -- to and et is versus improvement in customer durable it's Asia, despite nowhere near which here, of and and lead standpoint, now high it right consumers export as opportunities produce will those overseas PVC

and half half the And of the so little big for It's strong year, impacts again, caustic GDP, similar the second think because the very the a of to part business the overhanging less those which drives PVC economy I only of business, to it's in half of the typically the second first the potential just in business. year. year clear the of trajectory associated a

that I so pessimistic half year. second the say wouldn't towards of we're And the

performance, potentially that for quarter see year of at on, the have of just to we midyear, you balance the and that's turns look the we end the the in think we're second midyear, point our for and end still range standards had right the that now the if we might 'XX. year and for provided And high in clarity. quarter supply/demand and on be And even end but a revise billion the guidance, Chemicals second have at look year, And gave obviously, we the going some demand takes at in We'll business. more of to remains alone the ranges, in feeling Slide consideration beyond to today zone longer at quarter years not I the now. second get the only the that have when XX, Certainly, we're rising second high But year the sides of then been guidance we'll really the on guidance, you guidance higher if the constructive range. U.S. to a the the more guidance very where towards business, half QX of If the on globally historical guidance rates many 'XX view look our impacts $X you're range. into be go the understand of things of high of also right the close all are of we the X uncertainty factors are supply/demand. once in tight talking because it'll what's on reach that interest our half what constructive, We're we just guidance the that which what But second we're at that the trying for out. many look would prior the we're doing going great by if economy.

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

want to to everybody. may. going shares, want I the know on taking appreciate if to to And I you to my I'm Rob, related questions bit, the I just questions, I do go to some hate of this, preference the but ask back company. a capital X but structure I little

So talk absolute my debt first question targets. about net and is you

to and with once raise potential capital I premium, say, argue you pay do on you the would a that? get if the that to structure, So for a include about investment offset I the money mean to make on need the let's sense. debt debt, chose X% that X% Why talk cost you even of XX% you be X% not would including as or money substantial to if the is don't example, grade, You debt, could going the premium one the to your debt for back the

saying would Why that the... we catch you're not prep? the what Is retire didn't I

option? it Because seems X% at would X% reduce cost that you premium overall the debt. Why to Yes. of is not that is you what if the money, an which paying do can is worth me or

under the Berkshire. actually Go borrow and out retirement to of fund

hit investment you yes. grade, Once

also just challenge Yes. it's with it shareholders, too. is, premium, the The this the return the not is to

to it's equivalent same not be there's the the at the returned through XXXX, premium so on And the that the time. value an to just of XX% it's got considering shareholders also Berkshire

every the year, do the to versus balance where going debt reduces our that dollar so gross like And of debt to this goes we're debt. retiring

Going also but will by equivalent reduce into the into -- shares an when type reduce amount, we we'll split bifurcated Berkshire X.

it the Berkshire. half towards goes and so $X, shareholders it half goes of towards And of

so second And way we're cash going which reduction we once is half mean any to of do. into until certainly maturity and we out laid for deviate start scale. retiring the maturities that to difficult Berkshire, large XXXX very I our the today whatever we're is very what not the in the that meaningful go isn't don't put debt point, to at us to we think this achieve even have want size I of applying Berkshire any we is the

time. if of the want ability And we that because so have available towards cash we we're Berkshire all over the period to that have retired having we don't allocate doing us and have if the to point to we shareholders debt that without

or for it very anything nuttier was to up large going even up built see consideration ordinary or understand terms favorable And pretty interest if don't better idea press Berkshire you us they press obviously me wanted position might something position. on you you would actually question in you have just with of equity I else could is reasons. obviously vested all Berkshire, given Is that second crazy share money asking, I with X% stock. if share route. a is now discussion swap Well, large price a They've the there consider? My expensive. any out already still the this mind in has a a for built ultimately if was your these that a very Okay. down it

if consideration. a curious that was Just

tell as to don't continue But ways shareholders, value with other share discussions the consider to have shareholders, you that do that We we'll add I can know. our that. to you we we always and

can't private So other conversations with we disclose shareholders. any really

The Gresh next comes question with JPMorgan. Phil from

probably a past, sustaining much billion $XX and higher to environment talked $X.X respect of in capital CapEx With you've at we're spending WTI. longer. for And about obviously, the in

would exit you're about you that, the have So I'm to think on just color high to day. rate another CapEx, in be talking the would this particular, required you to I'm the CapEx way CapEx be about curious sustain should million be this context seem X.X of if XXXX a at think would in imply barrels for your around somewhere that year guide any there? interested but Xs in maybe the And looking would in or

did catch This year, we on. some needed have Yes. to that we up things

billion know, last lower you year, and decline we didn't As $X.X at assets. were some our sustain of that

we have more to Permian. So do wells to also to a we that of get restore -- are workovers some that's OpEx in little back some COX floods to That and part is the some online. reason of some COX our

consideration assets a but would of going in and should to we're as longer toward optimum So are allocate where sustainability scenario catch -- we should looking taking capital. as what most decline capital up, little a the value, even forward decline quickly. don't the the deliver we take assets level to they lower then for do, lower we capital these the assets into what's at to just that be that It's a the

higher us to happen continually understanding where get next I'm into your So at to would going a we question be year. if rate, should

where capital think we we optimized. that that we'll -- every asset to have be be to the into every I need have

something maybe sustaining some in embedded you capital the that on actually or was X that CapEx, catch-up like just rating, that X, So exit or in we're that clarify, rate? call saying is be would still to fourth spend there's quarter if that it, then the

appropriate the is I development we the would basis is than portfolios. optimize of feel each go-forward within that that, on a a probably sustaining higher But rate to rate. little say the those that it's

is environment. Our X.X at in sustaining capital still $XX a that

comes not back down you that So deflation the on the I say, today. where $XX $XX to we being we increase prices little we have than more with cycle like a are the waterfall, have costs looks in as in go a show should that we environment.

pay trying to there's the million inflation. into And million an costs also due uplift that $XX dollars associated year, into are with But to not related CapEx that. it's there's to oil, that's So going the the offset put we're just inflation, of that albeit in delivering to that. incremental cost that's $XXX this then for we more

rate rate year So it bit a going would be is an deliver production. at year-over-year, the that little a of at that should increase next in

questioner And the with Cheng Paul last will be Scotiabank.

to for you how work is may kind some price have purchase that of fixed designed kind haven't inflation program some early or next can give for what contract already guys -- and to is And for higher help. year. second program guidance I percent Rob. have back your But that the like maybe the second what are one second we're than any in continue much first that going what you full make of to of to higher, to? that you're roughly believe question worse say, insight result it's the you conservative quite is being in that, you too loss to be the item we tell you what identify that And can inflation half, seems or some Maybe some know XXXX? maybe is a us of your guiding see take will suggest just you year seen half second going is midstream there's or we've that going quarter go to

is year into this to and half terms We start it's kind in can talked inflation. a start and how sort of this U.S. of bit little it a I'll going Paul, give of you around Richard. the the contract Maybe of with XXXX. just of into view back there

the rigs from going half critical into frac flexibility have back and some core, the like the we year. of components think of I

do not XXXX. that contracts into have We some extend

land we've So again, XXXX flexibility plan what on as there. final the got we is, some sort of

sure X crews also rigs we're our we've of the that most I Again, we got operating make activity development We to the core one and we plans. think of from highest mentioned of I advantages have sort that is within want what can. sand supply, an beyond real and performing earlier OCTG

delivery to within continue and And and like that schedule would next advantage gives activity being being year. expect So sand in, those X our this XX% to into of of out tubular. got we've us that year, areas to things about XX% designs locked the able

will And really secure The year. out obviously pricing biggest the represent those work going X to So both in uncertainties that of order We'll terms those can. be contracts months globally. in advance. we inflation next the of able into rest, we

of So internationally work our with do able service with can as we of Ken, in sort to whether view need. best Mexico providers to global to it's Gulf of terms that be our work

half this back stand year. that we So looking we and the supply firmed in and this in feel we'll of good, be terms again, next the to year year where of in get price up

there on employed a approach uncertainties to and their in their those, that's I delivery all mainly. Paul, because capital taken of and us sulfur help much very able our on the I world pricing the to calls and of to say very appreciate of on performance of midstream NGLs, exceptional business want conservative our And of we've for capital shareholders. commitment to employees and want I the are thank return resume would been our and forecast I today, a lot all for say, the that, with

So day. good Thank you. have a

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

now disconnect. You may