Occidental Petroleum (OXY) 28 Feb 222022 Q4 Earnings call transcript

Good afternoon, and welcome to Occidental's Fourth Quarter 2022 Earnings Conference Call. [Operator Instructions] Please note, today's event is being recorded.

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

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

call us Vice the Operations, Executive Financial On with and U.S. Officer; and Hollub, Officer; Carbon Rob Chief Onshore President Resources Peterson, Management. Jackson, Senior Richard President and Chief today and President, are Vicki

regarding few slides the a the made and reference This presentation statement financial cautionary includes our to the forward-looking also that section measures be measure to We'll available X afternoon. website. this will release statements Reconciliations non-GAAP nearest afternoon, the can today. we will of Investors call on earnings a on on our on refer our The Slide be schedules GAAP corresponding found in website. to

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

everyone. performance. and update today's highlights an Neil, begin with achievements, afternoon, quarter our gas oil and you, fourth I'll good of our call, XXXX including by On followed Thank

our and redemption the and enhanced mechanics XXXX our update guidance. our on Oxy's cash status priorities, capital Next, financial quarter fourth then reviewing an XXXX will equity preferred XXXX I'll Rob of our discuss provide flow framework before and return results shareholder plan.

record of we before a billion, of income on capital highest return XXXX. employed our $XX.X have XXXX, XX%, In the net is since which generated return achieved

of retire billion record than $X $XX.X flow also $XX.X debt shares. before to to cash enabled free repurchase us more We billion, billion delivered working capital which of and of common

record Midstream guidance. and International operational exceptional Gulf Mexico U.S. productivity OxyChem our as Our generated records onshore, capital return our team enhanced on and earnings set business multiple was performance employed our by of approximated in businesses. across

by appendix Slide XXXX, to well per results. production XX,XXX seventh our BOE able presentation's outstanding shown delivered productivity, year productivity, best well a XX. in Delaware increase our on grew high-return our we the our Permian that were as day, Also ever in in year well in row XXXX, new We by propelled average

Our our and applying proprietary our modeling teams by service designs completion accomplished to reservoirs. this high-quality

logistics current achieve driven drilling the XXX% which Oxy programs reserves With BOE, was barrel. replacement XXXX Well our ratio performance, of to of of total and with than replacement revisions which our increased year-end ratio included, dynamics cost a enabled per was per efficiencies, us $X.XX price DD&A at reserves along by our BOE. over X.X capital approximately half XXX%, less our billion reserves to

at XXXX XXXX, Except for more the than in years years. have the least in for XX we the of in pandemic XXX% replaced collapse price last production our the of

the and of and oil our shale quality our recovery enhanced our continue replacement. in inventory history we of reserves of With to depth the well X remaining have barrels business, scale Permian billion potential

conventional allocate which businesses, the maximize a also our other sustainability. shareholders. capital is In and developing secure deep progress and the key with to the assets capabilities significant decline XXXX, assets Midstream unique short-cycle, have A low-carbon to portfolio unconventional to low returns high-return made OxyChem our needed future, in with the our to flexibility for we paired for capability we and inventory, of along our assets, long-term sustainability

industry preparation site and on several started carbon credits to removal sell direct and plant air -- agreements prospective exciting We executed to our industry first dioxide diverse capture purchasers sectors.

cash of fourth We wrap develop quarter way to land success. a and also sequestration XXXX We generated year billion improvements. quarter operational $X.X nearly supported continued square secured carbon over which sheet fitting miles free $X.X a of XXX billion acres financial to over approximately up was flow, of or million of of The balance hubs.

impacts segments, In Outperformance the our winter midpoint XXXX guidance, in & shares repurchase share Elias $XXX repurchased business Permian impact. our while experienced were Midstream despite storm from of the storm guidance. and guidance, by partially market OxyChem exceeded Rockies. also the Gulf earnings of in approximated within Mexico We common Oil marketing completing program. driven dynamics, Hosn million the and Gas of quarter, offset and stronger-than-expected Al

Oxy could has This potential the to generates supply and air and emission-free hubs. a electricity Ultimately, anywhere that Power. of gas. that NET generator important is In reduction operations natural December, and power an in emission-free access generation in NET technology recapitalization to plants to power our accelerate participated efforts existing the has emissions sequestration capture to our direct Power be

in Delaware to were exceeded DJ the DP XXXX feet in Remarkably, Oman the record. on drilling Basin, lateral showcase XX,XXX this Among most on Basin of Lulu expanding drilled boundaries focus lateral technology. the lengths the team's XX Midland longest where record days. this was notably XXXX and efficiently Basin, over set well safely in well in our our slightly become our Milestones like and

XXXX. an Basin teams Our came Delaware of rate X,XXX also over averaging day achieved for production from wedge productivity, initial in a Oxy all record wells that per XX-day online BOE

Spring that the the initial production New Mexico X Bone X in in amongst of achieved believe wells formation records our operators in all respective our Barnett their wells in Basin the of First We of XX-day Midland and formations.

productivity progress are In offset in capital-efficient, impacts XXXX, similar expect consolidate enable optimized acreage to trade via longer that laterals, through and required infrastructure, optimize The which we partially laterals, as exceptional to XXXX. more longer we continuing addition, infrastructure. and the inflation benefits well help we

Oxy of Mexico calls, of in our earnings Gulf X operations. pleased another assets, announce offshore I'm highlighting Horn After Caesar-Tonga Mountain production and previous record to our on

to milestone. gross Mexico platform X of reach Lucius Gulf production XXX fastest oil, than BOE from Our in less years first million of the becoming this developed surpassed platform Oxy

Internationally, Al and day completion. quarterly Hosn is project per Oxy. to at expansion Hosn ADNOC, net we, remains production progressing record The BOE our XX,XXX for track well Al achieved mid-XXXX along with on partner, with

production ultimately per We day. expect XX,XXX Oxy's Al BOE Hosn net reach to approximately

successful along We program the created including of share in capital a the are pleased $X.X of we've debt value with reduction billion. and with $XX.X shareholders billion XXXX, the for total of billion $X repurchases,

sustainability. and bonds we framework, strengthens our shareholder $XX our outstanding program will less our from with focus capital consistent debt growth and shift dividend share our repurchases, With that down to billion than to further a

and term, strengthen to long opportunistically debt balance repay our maturities further reduce intend the structure to our we Over sheet. and cost retire

In future to of will flow the earnings grow dividend support repurchase our program. of and and seek increases share our continuation years, our cash to we

reduction While through company, we shareholders do intend our to the outstanding grow growth value as want proposition, of also for and per of part share increase absolute shares. we value the our value the of dividend to

over common opportunities oil & our shale from dividend redemption a earnings well business conventional which assets as of of Carbon our Board our as Directors our billion and chemicals will and repurchase a cash Future portion authorized the ultimately, could share ventures equity. trigger increase growth Accordingly, authorization, and XX% come an $X a business. new in and Low gas preferred our of

now Turning to XXXX.

return low our Permian Our of future asset-enhancing business include mid-cycle Battleground chlor-alkali by and shareholders projects, million announced our investments with for OxyChem strengthening the Mexico. while modernization capital of to and cash plan investments prioritizing a in to enhancement flows. is previously capital including also expansion along plant gulf future support new to plant on the of maximize EOR Oxy's These return designed sustainability decline resilience $XXX the and of OxyChem's

million will plan mentioned, we EBITDA spend that generate million of $XXX combined $XXX $XXX OxyChem I which to annual upon on million to a projects, we just $XXX million. the expect Of completion,

to XXXX. in be Battleground the online expect We early project

The volumes, call. to logistics other efficiency will costs. a operational this OxyChem enhanced and We deliver forward enhancement detail more plant future higher about production look improved on providing project

portfolio years. EOR spent be of The we strategy, Oxy's asset subsea infrastructure initiatives Mexico. the radius of return to existing in of to and core increase the for higher the of $XXX capital so million sustaining platforms, including in spending will a to essential to capital will this remainder EOR our In are pumping compared projects, will and glad be remains investment level the productivity component year. drive of the Gulf future Gulf Mexico, recent tieback

X-rig Basin the half investment XXXX. requires of middle Permian in the to also program focused we returned last business, similar second activity our our of last an begin moderate year. a high-return to production In I to late short-cycle We're program on run DJ by year decline intend to should but additional the unconventional businesses.

assets growth to portfolio. deliver offset unconventional production best marginal in elsewhere our to Permian declines Our placed are

Permian JV. expect industry domestic We Basin XXXX due slightly to XXXX to Gas is will for anticipate expected & to Oil XXXX. inflation Delaware on this decline from we our capital the impact our be the Overall, that continue business In challenge unconventional to XXXX, XX% approximately inflow inflation from capital compared initial a year.

to by offset we and and supply continued capital always, our reduce continue on will chain our leveraging As competencies efficiency. efforts focusing inflation

reducing on net years. reductions XX% emissions to operations emissions day and These we've progress Another the to And carbon venting our marketed decrease made projects gas our important address methane to intensity aspect methane from the doing and flaring. and on our reducing Since is sustainability our methane XXXX projects a in in it. intensity we we're XXXX estimated pathway in XX% as a XXXX, We company-wide decrease few past resulted emissions focused of production. have what and over emissions of focus our of capturing every significant zero. progress

target. Gas to pleased We Flaring routine X a was That & operations ahead that our first major to World XXXX I'm of were the Zero Flaring endorse initiative, announce gas the & company that and Oil U.S. years oil Zero by Bank's achieved achievement. Routine U.S.

have international World Our on and to well significantly reduce flaring, meet of track to Bank's the projects target implemented operations XXXX. routine we're ahead

invest We Ongoing and be capture be in construction operational DAC, first Carbon and Pore complete the and Gulf XXXX, zero of late also plant net XXXX to to our expected will In to commercially Permian capture, opportunities intend in Low among the begin mid-XXXX. direct or compelling in our certification, of anticipate and advance our Coast large unique our hubs, pathway. space sequestration facility commissioning we investments. in our including several development that business air direct capture air will carbon

This later timing months our is than target. original few a

environment new the the to faster navigate optimization As support and technologies innovation. and of we chain on and construction focus sequencing supply current application

Carbon investment Low to subject million these projects. the is for funding the businesses million, of timing $XXX Our optionality expected third-party in DAC to XXXX $XXX to total capital and

our on net zero funding We call will of program. capital outside allocation prior our historical that our ambitions Oxy's mentioned

most the for our preserves first However, stack we are our prepared utilizing shareholders. fund our value if ourselves capital to

in of includes capital carbon Coast the business, wells. drilling development both announced appraisal the and sequestration Our through hubs we Gulf previously investments plan through our

and other Investments X that X reduce projects emissions Scope in also continue. will Oxy

intend pipeline of As the Magnolia that to part Coast build point through transfer sequestration development will our develop Gulf low-carbon in sequestration from our to with announce Parish, DACs, a energy source site area to we be along hubs, carbon source our goals Louisiana. in we're greenhouse pleased network strategy to and working Allen emission emitters long-term with customers. business, support we our develop and will point medium- gas our and This which help capture Oxy sequestration to reduction for pipeline

want turning to success. capital on best over to projects that Before reiterate our Rob, plan position it focuses I Oxy long-term for that XXXX

we in us allows a which flexibility, necessary. price retained spending to adapt As and high past degree if reduce of years, commodity fluctuations to

Now I'll Rob. call the turn over to

to Last the begin our all which we retired $X and Thank to rate afternoon, you, to billion a everyone. ratings. on of seek debt moved program breaking over will $XX.X Vicki, preferred repaid year, share share we us regain $X metrics and over of improving to as redemption shareholders, per balance our closer trigger completion common swaps, investment-grade remaining equity. sheet repurchase our The good credit and interest our billion returning of

a in the financial free position, I'll allocating ago, year begin terms Today, of X enables are partially the redeeming by XXXX. cash where flow begin to I'll proportion improved excess where to fasting then met. mechanics our we $X in is redemption to even a preferred greater trigger equity, shareholders our compared detail in of Our explaining us scenario

on a The daily is triggered of shares returned. equity shareholder This capital trigger mandatory evaluated $X common based distribution, outstanding day the redemption a deferred XX-month on is rolling has cumulative with which per share.

trigger share per included distributed an the As of In we distribution per $X.XX common have a we illustrative after is the $X have today, reach share our shareholders to presentation, reached. share required to example of $XXX is million $X $X.XX additional trigger.

share limit which with incur made, will redemption principal conjunction total trigger $X distribution million a mandatory outlay. with through repeats a to to cash $X. or that mandatory trailing of redeem share trailing XX% the of common $X per shareholders exceeding distribution, $XXX This is is to -- no example, equity as would will as million long common In process $XXX this million There shareholders. XX-month or, Oxy additional versus greater the than premium. common half distribution distribution In million the be preferred a $XX matching a

trailing Consequently, still trigger distribution additional XX-month even equity will redemption. shareholders the partial if to decline, distribution common preferred

our the preferred expect share quarterly to enable refreshed to share repurchase exceed program trigger share We us per to begin dividend redeeming $X $X.XX the our equity. combine with to per

While preferred expect enterprise way partial the our by a in in shareholders will debt ultimately created redemption the value benefit magnitude and and pace value similar of to resulting balancing commodity prices, reduction. we driven XXXX through the to

tax I'll now $X.XX $X.XX to adjusted share. adjusted related quarter already noncash reported was fourth benefit organization a profit new and to per an reported turn and of profit our per of of diluted We driven posted share Difference results. entities. a diluted profit by legal between

a approximately billion shares for average cost per repurchase XX.X of $X new a of following authorized repurchase below share. recently Board our mentioned, the year share million program weighted last Vicki $XX As

quarter approximately billion retiring cash million swaps. and interest We paying $X of billion unrestricted $X.X of to the in exited rate debt notional $XXX after

we For balance of over costs -- We year, which the executing interest that year. XXXX XX% improvements eliminated financing interest a $XXX interest sheet the principal in completed and in in will of reduce burden. resulted $XX.X reduction million rate debt sizable outstanding repayment, estimate per over by and billion

maturities decade. than reduction year of -- debt $X of have and single in the profile the future maturing any of less efforts debt that now for proactive we Our billion so this company's remainder leveled so we

reduce it returning XXXX, debt maturities shareholders Going additional partially with clear of runway forward, third do repaid We until matures also may repay have to cash quarter debt on $XX us the January as and opportunistically. approximately we preferred. and in million to not intend the and to redeeming a focus providing

$X.X higher with to Gulf of In inflation were generated free impact than spending. the life cash environmental expected, result annual remediation. Domestic primarily continuing of expenses work billion a inflation. we extension costs flow, to fourth platform and of increased capital the in winter quarter, approximately and to related the operating storm pressure due and as and accruals higher Elliott, equipment Overhead upgrades Mexico of even compensation

company facility & increase OBO our We activity receivables the attractive ever Delaware further expected in working improved impacts, investments securitize our quarter to offshore in was the projects, million. spending inflationary to rig changes for higher amendment oil $XXX our JV. due liquidity and to Capital than areas in scheduled starts higher and became position to an when first XX% to gas receivable by Oxy accounts leading

our cash In XXXX, line of taxes estimate. $XXX previous we approximately with paid in U.S. federal million,

we As we and move all utilized NOLs our have to carryforward general cash credits. into full business U.S. federal we've XXXX, U.S. as expect taxpayer

X.XX XXXX. We expect average production to BOE full year million our day in per

primarily to case last than the to first was it operations. be preceding quarter lower the is year, in expected maintenance production due scheduled turnarounds, As the our quarter international in

Permian our be over wells local Rocky our wells said, online come our of to the the with only process. with That turning fewer XX% XXXX, in prior fourth than X% production to our and year is trajectory wells have for to business onshore We'll quarter, successfully in permitting in about Colorado the U.S. worked smoother communities overall navigate regulators we production. Throughout XXXX year. the and expected of

Our of DJ us back end X rigs by to the add XXXX. work the in positioned

the likely is in stabilize to the XXXX to in of of materialize. last the second from additional fully picked Rockies Production last last the benefits XXXX quarter year is year. expected our rig once be Given years, over fourth production the the activity levels half few reduced lower up in

with other cycle plays. a was that up. time ramps shale lead simultaneous but is and experiencing on business, return development, for regulatory an are market to to creates time to for impact to market we This this levels our environment the Oxy, now which and by predicated as costs exceptionally high pad efficiency Colorado. Basin in as rules additional permitting welcome negligible return activity development have in remains of DJ capital noticeable to typically linear asset our in operations sustaining operating a certainty compared we year expected approach a Colorado to The the

expected net is The production in change material expected the approximately are & Gas tax a sharing in per XX,XXX new we DJ XXXX reset March. rate costs our of XXXX across Once with approximate is PSC decrease year effect take barrels to by under Basin in our half second operating place, Algeria to agreement flow We announced remain the our because to which production Operating day, Oil were Oxy cash in guidance. inflationary lower-cost BOE also declines. last pressures in business is contract as will the do expect not reflected the

to In the downtime reduce maintenance platform work Gulf operating will and -- planned further of impact extend costs. Mexico, plan lives time

maintenance due We basis, barrels COX are OxyChem in an Algeria of downhole On a work exceptional to business and income. contract. may increasing reported the as costs exceeded operating billion also BOE year for was purchases. internationally XXXX EOR increase $X.X the new lower

to by standards, We match historical expect XXXX strong be is to unlikely another XXXX. year that

Caustic of second environment we the pricing in sharply XXXX, soda in macroeconomic of now but fourth making remains PVC highs pressures half to XXXX, reached fell quarter all-time as pricing begun stabilize. the has but prices the uncertain. are downward

to before, to what integration derivatives position. strengthen multiple further margins will investments mentioned capital optimize our across and chlorine enables our market the business, OxyChem's our optimistic the We remain competitive I've production As us and demands. mix about

the advancing return framework. success to remain now forward will dedicated back the beyond, call to and enhanced of of rest turn over Vicki. I we extending Looking and our the to XXXX XXXX

questions. ready now We're to your take

DuBois with Raphaël Societe first [Operator Instructions] And from Generale. today's comes question

of was we X And have be be now a means end The instead timing, I the XXXX. operating follow slipped seems that wondering if reached to bit That should be my little it will other with the status to first first also that DAC -- delayed. it's one consider which mid-XXXX please. ones that could DACs, is about question,

in don't we're we other that experiencing delays No, DACs. situation today. of the The supply came expect because the delay

more we'll We expect that have challenges address out, to since chain supply have time today. that we the and those further are prepare of to some

schedule change. So expect the we don't to

for $XXX Low follow-up better my for is you $XXX Can on maybe us help Carbon. other what is is understand And why CapEx the million that And the for left one? projects? dedicated Great. to million

the -- at out broken haven't you $XXX We $XXX do anything? have point. million Richard, to this that million

was give I I add, kind to Yes. just the couple is going Gulf to color and years we next we've program. develop some mean, partnership Coast of I certainly, X as of help this Midstream the that disclosed, We CCUS year allocated announced of on you previously with we our for some obviously DAC construction the started construction pace. mean, hubs on the and continue around with to today. continue do our that

And we and DAC your continuing then I South We the go into that's is other first as think to partially answers the Pre-FEED look FEED meaningful. question piece, Texas and work it think our hub. at

X, optimizing as keep DAC that for be our which able development we're Hub, and learnings South we well. parallel, to schedule to us we're the on think and And pace while the in same that progressing we'll applying so for innovations and with working Texas

and ladies comes Cowen. our Deckelbaum And question from next David gentlemen, today with

bit to I a little dig in more. wanted

priority. as capital return at on we the preferreds reaching supplementing looking bit now in a get your off, think versus, of capital as trigger threshold preferred about on $X 'XX the quarter as that the share rolls How trailing say, lump benefit you a work sales of $X this second talked months on of 'XX? that retiring asset kind with the share returns the do a about through of quarter per view You this and as that and especially second beyond from notable year, especially we XX

stay How that kind try of think you about other above And you navigating to sources to that? forward threshold? we do cash pull to should expect of

value we has really has proposition to that threshold year. critical target, of this to a sure this wanted the repurchases such evolved. macro We're our Hitting going Share that what is really a not the towards part is been execute outcome not of it but is plan do way the an end anyway. the a of

we we any available. in if pace, So -- that doing what of in terms on to really sales value asset value keep have that dependent see do and would is we the what the what

But sell. list on to I we anything right say have don't would now, the

now. half continue sale, Of additional second to we without that we're for course, But the allows And engaging believe nothing asset environment anything right for year it's any is the there's have price. could that that in a right actively macro us bring potentially of we marketing sales. the

Law. Carbon in second That's to seemed could under the funding for ventures funding. helpful. It I some Maybe if quickly sources DAC the around been DAC. like obviously There's made potentially and flexibility some around budgeting just Bipartisan to Low the switch other that's you available alluded Infrastructure of

maybe would us you any Can through that of information process the walk loans have application around for how time more through might some sources when potential funding? line about think we might other or be we and the coming

life Richard. plan. is we partners, good but pieces, I that. over of of to I'll two continue answer only have we this a at capital you piece the look to as X, our David, for Really, capitalization mean as development DAC with not discussions described. try

an fresh with. important that's that to so part And stay want we

Texas Hub grant but part not are projects intent in that we really for The good is, position advanced then today, our of really type of think well. X detail of are program. We in specifically. and communicated you associated we're on really directly South puts program. design talk that -- state and think go before, into a programs as we us and position the We're we the into second that the a some -- in DAC very in the as that with CCUS that DAC have and The mentioned, fit to

contemplated when just the a South particular, the Texas for XX the area. unique that I think sort at build-out in opportunity we've look as you it's large-scale Hub, DACs of that, look to at

year, updates, we'll answer we'll So have go more I but that at think for on this your we it to as now. leave question directly

Jeanine question Barclays. today our from Wai And with next comes

two have the I we if could. questions, around I Permian, guess,

one, maybe inventory. first on The

second it the sustaining wells wells for even compared break looks for XX. the inventory, under CapEx. versus implies location And current slide that the XX-year The like one to on in about that sales It version. really updated different, after prior for isn't a adjusting inventory at On your we count all which the pace. 'XX,

just talk in any wondering example, your cost. can So we footnote if the on And of uses the the saw it's differences between whether costs? well you there look updated and old about For would assumptions cost you use development current that the different new how strategy? calculations, budgeted inventory on that the in or if 'XX inventory

Great. to those. a that. answer proud continue I that pleased Jeanine, we team's to Richard. with our of try have very inventory few obviously very help good is the advance I'll acreage have to position mean ability accumulated, of this but and

in especially activity, you thinking less say resources occurred, in of tried strong breakeven slide we highlight that the So long have is even noted, one some $XX as I'd longer with really Permian about that than laterals. to changes

to lateral. to able that development acreage we're patient So and where really core our the sequence accomplish developments allow in longer to happen continue be at up to areas to

that obviously, much more able single we've made were to may well a but one, valuable down that, as inventory. go do So we

or back to areas since to the environment program as new some capital the over The restated I just in develop is really into the capital we That's put couple other XXXX. years, last allowed thing of began us say zone. really would

development Springs advance those to happened really the continue technology investment So under we zones. for the very Bone wells we that during proud that example, those. work First What to the cycle, and noted, plans of

so especially are allow type our also this our those inventory. restoration to we further like believe But zones that us advance and will capital, And in inventory. and areas year that advancements adding to

have wells year. replenish in XX that XXXX will wells this target we For we drill the fully believe example, we

that how and inventory. that terms thoughtful we're And approaching expanding of so in pretty we're

go, And the Basin, grow so some continue year. River in resuming as activity But hopefully, to Permian. we in that will like this the areas even Powder we're

Okay. Great.

production sustaining In Moving know is $X.X lot the has 'XX versus production of to levels? areas, CapEx of much there? allocated different a ways billion to the got CapEx that keep keep flat how to We operating And and ton flat that the there's does Permian of different sustaining estimate, Oxy Permian? a

it's think capital When a capital could do have, when do we employed levels, that for you the on sustaining on ensuring the Yes. return how And each for we really multiyear maximize we we for while that basis. about that example, of assets resources fully about of is the part. capital the EOR on part the actually the facilities return way to and the there's been Permian, EOR keep able employed the it talk business maximize loaded all The the to part, we've for of time.

gas business, the of the did AUR And that reason lower capital. $X.X about decline are do billion for our combined certain in us. get unused it. EOR facilities those to business, certainly lower of flow value this the business, the that's have part fully to this to out Resources with the up We capital. been increase require and to those capacity able EOR to the beyond chemicals business point, loaded the most year, level we of So critically we're what East the decline to the we've and a The to and requires But have continue that -- of the assets we sustaining important don't is potential keeping Middle grow business of not that's that. would do our EOR

cash that very we And initially sustaining is as generating you asset lower with flow provide very Hosn, decline Al expanding not we're as our cash the higher about capital additional us much. low increase know, there, like -- from by most having that complementary. but diversity will the assets which will very of well. that will higher decline least combined And that's is assets this in portfolio but decline, the flow what

all that have. portfolio have the the best worlds, I we think, diverse we So in of

Portillo comes our And Matt question today next with from TPH.

be to the business, coming hoping the the see if out? that Just look total some up maybe on you an of how may of about color you're LCB how on And give maybe start things Bill I source. out, the update kind and you've you IRA thinking able the progressed through point since we sequestration Day secured volumes maybe to us was are the first guys any having with PointSource to start have on so could far project for when conversations might

to for I'll that you Thank pass Okay. Richard. the question.

U.S. well many progressing for Yes. of Great. things I Matt, post in think in IRA. certainly are us the CCUS and

going emitters I to think with sequestration. lots of transport on work to

secure really similar the & focus in deals sort can get so best of economies be be way we also able that both are to putting Our these really to oil to scale, as scale, develop provide certainty a together. of but to those sequestration sites and the working gas, has large been

we're we've So that well are we these about. got as several Class as important. We've providers that progress hubs VI The very working talked Midstream have really of in wells X characterization sites.

partnerships able being the aligns capture the able that. do to site early, be And I really secure from think, so to downstream those to

and able begin year years, we out of this transport more couple hopeful we're how couple next the of hit combine to over that projects as as be So sequestration to go that we then FID think plays years. will capture the the of this about over sort next and construction really

over done to of really that there us. the years the work projects work our in back the of some the last going several some helped inform capture around even Permian I think we've

that good kind across partner how about as Hopefully, the you of value a chain. manage do

develop puts position again, us And as DAC really good focus sequestration. together that. take synergies That we with that so our to on the really a is, in

and having role And again, that more good to updates. playing projects. expect conversations have we're this those year so towards And

just start Great. with OxyChem, around follow-up, my guide. And the the then as year strong a QX to

if we feeling for curious into the caustic expectations baked Just you all are what's PVC guidance the and progress maybe XXXX? about through and outlook as

Matt. sure, Yes,

demand PVC about So to higher about almost the an end as what did that demand down X.X% grew the in we was was XX% actually industry actually -- demand for export saw we domestic year-over-year we 'XX. was X% But ended up relative total year 'XX. 'XX PVC being in what

we what's and but that And what's is early XXXX, XXXX. on quarter, our out softness through PVC into in so appears we're that late fourth guidance in the bottomed saw it looking going

we seen And So we falling. all announced prices PVC many PVC trend to upward largely buyer buyers as in significantly inventories increases adjustments believe bottomed all also for the starting are have domestic price export prices were that, And that construction not the most here only domestic in are season. PVC. low recently. the as completed sit producers were we market as market, actually today, we believe but enter We've

uncertainty So domestic the it of in guidance thinking global trajectory PVC, the the that going business. that's about reflects and economy drive to of the

impact an construction pent-up from to this quickly still as continue of the low to see subside demand peak rates, still in course, may impacting we while impact the flows anticipated. headwinds there's so economic be pace higher or is DTC And to begin interest huge globally for and the business now not China there's of increases just inventories, trade in the And as PVC. as which early to the of going activity

early on what's down as China to factored the dramatically decline, in we as conditions soda loosen business, this come soda of to European and That energy the export markets impact into The again, from stocked costs economy prices, from market of market tight the my to winter. significantly kind up caustic PVC. have fallen. So has murky not conditions in restart, we started Europe discussed looser went comments into certainly just also for that's prices global but taking, outlook operating I from we saw longer caustic

the guidance to of this time for on a unwinding and it's European of economy. assumes going opening gradual caustic the take this inventories business, the Our of Chinese side

May at or of So we as construction know months it. February got at -- heavy more We've June that We're but time. about global domestic than the look than a weighted going total GDP. say, trajectory here again, our so to we I is maybe would in the year in in and and couple business a chemical lot talked we've the more to do will, sitting past, in

the So both the point. just around reflects Overall, for sides that at business that uncertainty this guidance year of

America. comes Doug today Bank from of question with next Leggate our And

had area just we've at the the me I understand haven't what to always in asked I Gulf about seems little It First decline a been a from to was is looks this cost. hope an like operating questions legacy of portfolio. murky least of all, Vicki, -- it's ask the and Mexico lot where been already, that bit late the getting development of my a little I want on, apologies. the so today. on a backlog trajectory to but bit cash going

see you guide that latest seems a the what trade-off Can Gulf? trajectory the a longer thoughts it higher and on bit better for production us you is little you OpEx. the But maybe as the term doing lot on are give your

plan you is cash at us. the keep generator continue for know, of to rate to a Gulf for production significant right It's, it flow that the as at Our around it's Mexico now.

So we we where is. and production part grow lead current level significantly laid That the we exploration the to be to and of will maintain have what -- that of of it the have can to we outcome plan have production. to. intend inventory, the ready We out to some could ensure development of don't the development the

lumpy. and will But intent it's it be our

there said before, our we've timing. be our successes, on those level exploration production about and today. As But is on average, how depend capital should go it the will where

For what period?

have our leases, the X somewhere work picked as say I -- preliminary now today. would inventory We're trajectory XX would to certainly I maintain just what doing know. we we potential that between is you those of between some that say on leases. and years up

Has favorite And a may, is be you point, I When is let's clarification to obviously. some the breakeven, dividend about I today? I but understand breakeven as onset if $XX. And capital. guess DAC that about sustaining how your as for about new question I become recognized to you've questions think My say, but Obviously, predictable, the little lot a for of thoughts? your the breakeven, you trying ceiling dividend you like That's ask capital think of that bit. what today part capacity helpful. well? about follow-up inflation, What capital of business really are breakeven, we've had it's your a including I'm want Vicki, or guess, that there's DAC, a to been

that somewhere we would that where our were capital. we we I scenario capital DAC DACs development are a we down was certainly, the say as by not the If on breakeven significantly supported in Well, $XX would or were for including part sustaining of cut our from we inflow had in unless unless capital significant others. development back the a environment, else, a

wish in or what so model can price dividend to it's a been to levels. kind still said say that would where times would to we've close that that when are I if that today, true at I $XX we're about -- brought we because in oil various where dividend. support in people. up we're had keep think to the the breakeven never of and take that of So prior us difference so misleading still term say you breakeven we sustain ensure it's for want our we what that less to We maybe And we is we going that I is we've the that environment a

where to to breakeven want that at and world really scenario would the have through we never what I the a it price But would like $XX. go what again. is, cut look

would numbers than the what to back investment calculation higher into $XX. be, it obviously what our the We've is breakeven it take and can't would right and be be our show expect would than you elevated it now So capital what today.

even you're the of us cost. the kind for and And be is materials, breakeven of than that OpEx environment, -- take dividend then in to environment environment, that it look that our be things services environment, on means our that in then would in that all services those could and chain, materials labor if a growth. would supply at would adjusted So So what $XX it cost we cost, to ensure that to sustain today less we

we how would that's calculate And that.

capital -- -- So different. sustaining and that is and

and earlier, level from facilities the have the infrastructure I asset, have generating the returns that is the you where point that sustaining the investment generate you at explained capital you can where As you resources every have. and best that you're

we're we as back of reduce that what today, we've will our to cost debt preferred, cost the our from buy we'll continue doing our to reduction, with as well. So we as interest lower as structure some and we lower continue

can our primary can use grow dividend. two measures We much those we the as we way calculate how

And it interest that it to is dividend, intended the with on available continuing continuing as share we're be per growth will basis, to preferred of for help repurchase well. as dividend. increase further share as So a get the the program the to reduce that capacity we're our reduce to to

to program cap we allows So share it's an well number have increase absolute that per dividend over a that time. repurchase as as continue share that to

today our Paul And Cheng question from comes next with Scotiabank.

XX%, to first That's that going by Henry -- the how that that change $XX also gas we number, back changed to questions, the and If how I less mean cost, and get go Hub the please. to of I for say, inventory. and XX% X Two into the is will to That XX question. to, the way changed? for those return WTI I want have apologize. than internal

of peer your of second peers make think LNG what some your lot question least the for -- suitable have the actually or signed think in investment them a largest will game And agreement -- LNG the equity I plan Want plan. supply and of at that Oxy that see a that, there? that is And investment the if be to you? investment one

that to question, as that LNG is make competence. LNG Richard do always core pondering are one I'll within do we things first of The sure the the take question things other question. is tried our that we've the

getting our And is out oil of the so handling gas most COX. and core competence & reservoirs

we that's gas best. the a [indiscernible]. that from do to part not it's going We're how investment something we to be would too in. our that that we that, development not and a as our put a If or far & something what not to So don't builder be part oil And of builder a in dollars not want would strategy want LNG it's our know use to something is of we if of. of go

a sort Paul, that Richard. I it's inventory, still a very that I try you against we answer but to rate are that numbers of obviously, bit, would this inventory. question as the on about mean, is the in your inventory. discount higher, change strong think if

that there. as in XX% we lower price think than example, look we at about show gas look and plus at gas price at DJ fluctuations, what even a we program For we returns the program type

things. impact will it So

our But that expectations terms sort to have what strong the drive on return inventory we think that, on Probably than to I in will manage of say exceed continue with of really we that returns And we to drill we that are those inventory less wells breakeven. year categories. thing other $XX the on breakeven the this the basically, all develop lower capital. into

result. we'll time sure expect So our we've as ahead make And of the of grade those wells earlier, this targeted we been to that to able drilled I we sustainability that of carry returns. to that high mentioned XXX% year, same to wells replenish have

Roger Wells our Read And next Fargo. from comes today with question

discipline or of I'd for couple up reasons. obvious years discipline the Relative like the last of even to on side. aggressive capital Mexico, on over follow guess, the really, maybe secondarily, capital maybe EOR the I Gulf

catch-up wonder maybe also sort couple capital maintenance declines the that, of you're in the the it growing sets outlook Gulf the flat the and flat you terms to are EOR, of for to how your over comfortable or in for and like of but anything just years. in any that Gulf whatever up next Just base maybe EOR now,

with Just comfortable what you to get did outlook? that

it restore better. investing and why And was wells never have capital been that little both doing those And that's in things to But very helpful. I high-return pandemic, bit inexpensive budget. a the the that making our putting of starting EOR of is think well had those stopped those just of during to making online, maintenance operations each which and of we the those assets is down are some barrels. the getting OpEx in increase back wells gone the business increased

infrastructure, to we our around maintenance around maintenance any down of capital of kind equipment. in no starting shut kind decreases And the So didn't the that. of do

on were wells to Mexico, and pumping dollars of extend in So still spending run the we drilling just from the expand our was of standpoint out putting the with time and subsurface to also equipment out not more there, aggressive reduced our increase the time the getting -- reserve capital surface in really, ensure only by And opportunity back taken run to productivity we've there. spars could it on improving EOR. there to we that productivity Gulf and not also wells work online increase as being of with the improving and radius our lives for

Mexico the the done the back work the both in we've in without has and Gulf really next that any beyond sort to Gulf prepared sustaining levels, kept of So us to get year X. of issues EOR, or

anywhere lands Okay. or federal And in Any just as permitting a issues waters? federal with on quick follow-up.

that? was Permitting what sorry, -- I'm

so but offshore. much onshore, Yes, federal not you're permitting since federal

far. Even we've done things thus able had issues get approved. and permitting still out, get not were to the things offshore, had permitting moratorium we when -- Federal came

And for so us permitting I to point. see at be point offshore issue don't this an the

JPMorgan. John And our with next question today comes from Royall

year. for last at 'XX, XH And your which in domestic per X.X% So like with just up the think about in from line looking XXXX. it's looks more in I prepared of said barrel comments. It OpEx guidance Rob the

rate inflation better capital on on the is Just comparing inflation the you talk the why much with there can side, OpEx CapEx gap XX% that about the rate? inflation than the so

of barrels because, is the to offset increase delivering going Mexico of a of in declines bit some comments seen, got the some in time Gulf some and little prove our and and on to just the OpEx then itself the as to just was for information terms saying, it's some I storms. year I'll increase up ability from this year, a Gulf of other was and but of run to that next for did Richard's onshore. we as But our there. little areas the Yes. the your work has of Mexico, helped bit of about the I that made And reiterate you've

prepared some you have permits? better Richard, we're So offshore productivity. the now do on for higher

OpEx. mean, is XX% that what I Maybe you just bit little on on kind when seeing capital in then difference Yes. OCTG. major look OpEx and at of onshore we're a one

to While single less our that kind year we and exposure far have that last the us. category activities, was some for really in maintenance of pronounced, biggest it's

of there, down GoM onshore, price So price and things U.S. it's were the that. Vicki's so a then indexed activities was COX things OpEx gas the things. OpEx, perspective, for WTI little or really, kind some an of We from which break a of processing, like been inflation of into would describing really scope be most inflation, really power, it couple and scope unique like it like XXXX maintenance

downhole pretty was We really of And up -- maintenance and end scope the a bit picked EOR. maintenance the activities managed. mainly our year, well at

as XXXX, As more into it's go Vicki balanced. said, much you

volumes resumed as If inflation a increase, kind the more carryover activity bit in lot terms a bit of scope. you COX there of and there, see of for are is little up but it's a processing year this EOR we've

been say we it's maintenance look the and show improvement. as water things cost large, in for kind kind able pretty type of compression, to run thing onshore, of U.S. We and we've last rates, structure activities, activity been really 'XX resume management, of since lot our Probably those a well. similar OpEx cost very uptime back So GoM, about we've holding type I'd these production of for good at up. begin by that. first to us, quarter and that the go structure the hold to to But

gathering So able in third-party just and be with to through a within sort companies continuing resilient fields good weather and our production work to of to and then processing a be this way. manage

year. significant to So uptime the adds adding that value

activities some there of OpEx-related as our so been And focused well. have

And Great. later same on the the XQ the I guidance project you do something Hosn is but full of year, apologies just production have progression one the have that the quarterly versus here, Permian if And I stays missed ramping then the of in the see in you year. next production. Al midpoint and but starting

other the the do of the of then you are year? So that what throughout pieces way? expect how kind things to some production are And pulling progress there moving

by onshore end of sort better steady-state position perspective. to I'll and a ramp much really puts just start U.S. last for year the kind up secure resources to Permian of the us growth. of the Maybe in a able of being end the year

noted, had or quarters other However, on XX% the first -- the the versus fourth wells lumpy. in little It's is as about quarter, lumpy against quarter. online a a we We of even Permian kind year little less

And then Rockies. moving really the the part from several capital We've is years. the been underinvested sustaining over last

resuming activity And so as we talked, there. some

to quarter out 'XX decline actually sort of in day Rockies into first 'XX And start of the XX,XXX we a We growing about half the steadies second the have that quarter. fourth and the in year. then barrel quarter a about second

moving of perspective, from that, big so our part. then that And is And is onshore one weather an part really other the a GoM assumption.

other consider the at trajectory the you total. that's think to I look So piece when on

up a little a Hosn down will Yes. Al In be of bit, the end international the year. bit comes on total, Richard and GoM comes little stronger as mentioned, on towards

for and of question-and-answer conference any session. to Hollub turn time, gentlemen, the closing remarks. Vicki And ladies interest back our the like concludes in over to this I'd

that amazing your generating above questions. for work first I'll Carbon for businesses today in the to and our rest core teams afternoon. all call beyond. Thank you do joining for a and expressing you Thank emerging Low and diligent appreciate advancements always Have contributed gratitude my of and many to you. our pioneering going their for all much to our good focus by so so you that cash

attending today's This all concludes conference for you. thank presentation. Thank today's call. you We

day. disconnect now may lines, wonderful You and have your a