Occidental Petroleum (OXY) 10 May 232023 Q1 Earnings call transcript

Good afternoon, and welcome to Occidental's First Quarter 2023 Earnings Conference Call. [Operator Instructions] Please note this 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, Jason. thank Call. participating and Quarter Occidental's everyone, Conference XXXX afternoon, you in for First Good

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

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

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

Neil, into I XXXX we everyone. and The Thank good our as call. afternoon, continued operational first achieved year you, financial and quarter last in will detail successes

disciplined progress enabled and spending approach capital return excellence shareholder operational our Our to meaningfully to us framework.

efforts Our an Moody's. to in rating regaining sheet investment-grade credit culminated from continued our balance strengthen

will of first market call will covering and equity our during before Then, gas detail the increase and and OxyChem and our will on light by redemption business. covering several Rob followed commencement on an full financial in last go made then oil shareholders. cash performance, the guidance, year of to enterprise oil flow afternoon, pretax I transferring the status common priorities progress In earnings. to results production an including This accomplishments by preferred our value I and and begin in volatility, over our quarter gas update recent established highlight the our

before redemption to of price quarter's approximately in capital. share common success in towards working free generate flow preferred Excess even of cash enabled program us nearly of the equity. share repurchases $X Our first billion $XXX lower was for the repurchase of cash allocated and $X.X billion XX% accounting of primarily our approximately million operational triggering commodity million quarter, $XXX the over environment

Operationally, prolific in Mexico, approximately our quarterly first by midpoint achieved we In of Gulf our BOE following across a premier This driven Mountain was highest which exceeded our per asset the in production we in the and outperformance decade. day, over project, portfolio. production higher expansion successful guidance December. quarter a uptime partially XX,XXX outperformance subsea by was the system Horn Caesar-Tonga following completed

new Our in well. strong well turnarounds. performed than strong in of Rockies, operability benefited Permian work record. achievements DJ ramp-up earlier free The commenced and annual because ability to the has demonstrate In expansion and has integrate Internationally, production. higher Basin high-quality with project cash anticipated higher operated-by-other in volumes ahead Oxy's our and is the the to base foundation expansion for provide and daily new well performance strongest and talented already production These assets from history. the Al businesses production Hosn of teams how in led flow gas Texas our schedule performance Delaware. generation primarily the notably, team's higher-than-expected production a resulted Most the

the our Our established new well quarter, and and records performance global Rockies businesses, exceptionally first achieving gas well Permian. perform onshore teams strong several Domestically, the to and delivered oil in accomplishments. and milestones we in operational continue in unconventional

at for over longest just drilled lateral set ever also DJ feet Basin over at well XX,XXX record days. X Oxy team a Rockies length feet. XX,XXX industry's the well Our new in This

design design. We as out DJ across plan delivered our by the Basin. we this addition, develop new a single production further Basin roll record enhanced well a we utilizing inventory in In the DJ to well

in optimize horizon, Oxy record the and our generating an BOE In subsurface with Permian, and single XX-day day by initial for a continued to interval. X,XXX rate success deeper production per Delaware inventory, of Wolfcamp demonstrated this teams the unlock well as

Our of wells, Delaware exceeding also completions time of far XX.X previous our of hours record about set team another achieved hours. pumping approximately on XX a continuous

that We such faster efficiencies we contribute and early to lower increases signs Though will inflation. our market. time a pumping to faster year tempered and increasing XXXX, likely certain incur expect as of some price seeing are completions this products utilized in services to compared will cost operations

and impacts through Our chain teams working towards partially are efficiencies competencies. supply various inflation offsetting operational

For the to of reduce $XXX,XXX frac well. savings optimized for assets average per water in Delaware designs example, around an Basin, and we've utilization

has helping intelligence team into costs. Rockies lift plunger base our production artificial and reduce operating successfully Our program, integrated maximize to

our On a the current inflationary manage shareholders. pricing environment team through across opportunities ever flexibility that is chain with broader management. are to than These scale, thoughtfully portfolio business balance value more we capabilities in deliver to continuously pursuing cost to our contractual important continuously our strive partnerships supply as

our mind, review cash With now XXXX in points priorities. will these I flow

discussed last priorities XXXX disciplined quarter, the prices largely in volatility to capital exhibited incorporate we As this a cash short-term commodity our year. agnostic flow strategy

focused rapidly dictate. sustained to projects. reduce plan commodity assets, portfolio low-breakeven flexibility plan are prepared high-quality in securing short-cycle, XXXX to and landscape we resilience. of flow possess Should our our sustaining through Our demonstrated activity capital macroeconomic current while continuously remains on during maintain should in the on track a so We our to levels do again our the intend environment. prices long-term global downturn last the the conditions and monitor We market and our cash downturn, nimble occur, we approach capital

upward an pace follow accelerated. and redemption be the share our prices the preferred equity to though oil may of priorities, changes flow repurchase trajectory, our notable cash program expect not we do If

future expected single digits. have We about production be previously how potential the spoken in low to is growth

future contributions we flow. many outside anticipate investments in to our cash this growth. However, result cash flow the to opportunities making mid-cycle we production have will that We of grow are year meaningful

in with benefits to EBITDA, For million $XXX OxyChem expected example, our are million in start annual project benefits to full early XXXX. projects XXXX and expected new to late incremental in contribute expected $XXX

the of businesses the flow expected potential volatility. emerging assets from enable to price value position exciting We debentures investments detached shareholders. our combination low-carbon cash commercialization with businesses low gas of the that forefront are near-term high-return believe in for create breakeven, at oil and our uniquely flow to generate to and technologies our our the Additionally, us cash decarbonization of industry low-carbon

us Value cash priorities. creation phase reduction our past framework. over allocation common of years of positioning excess our governs initiate the flow X toward our for next cash in return The was to shareholder key debt the shareholders

which in our efforts improvement an interest dividend of increase and and program. growing share financing completion costs, contributed Our year's to and reduced last sheet repurchase sustainable balance the

completed quarter. of our enabling to over repurchase already trigger Building on equity this us current in the redemption of the success, preferred program, of X/X share million first approximately we've $XXX

flow redemptions. our As additional we continue by allocating excess which, towards cash XXXX turn, flow may dictated priorities, preferred to trigger cash free repurchases, equity intend in share

these future of and for that expect on serve per flow In that as catalyst measures goal for these common combination, value our we cash enterprise further accretive will to our rebalancing common believe will be continued shareholders We appreciation. a actions a equity basis. share

over to the Rob. I'll now call turn

Gaining a everyone. good Investor is the positive and acknowledges and want outlook Vicki, Moody's upgrade Service. investment the afternoon, begin you, rating highlighting that by for day financial grade recent significant to our Moody's transformation. credit rating Oxy's I Thank milestone March

flow redeeming our Continued opportunistic upgrades. cash combined that equity. reduction, The redemption to last with quarters story of future points preferred equity, compelling facilitate the of execution we begin the enabled several preferred priorities to will debt deleveraging a us hope over

redeemed including payment far approximately million. close year a have XX% approximately premium $XXX have of We to equity at preferred $XX million, given this cost of a notice $XXX of or redeem million so

To shareholders. enterprise annual $XX date, have we transfer also our while million value dividend, approximately common to eliminated preferred of

this $XXX the During stock equity all be XX-day mandatory preferred last reviewed how for requires quarter of end XX-month addition week, common will first of least a agreement redemption. at of By each reached call, preferred The cumulative quarter's share. per when rolling redeemed. triggered the the preferred million notice redemption shareholder triggered $X distributions fully a is during equity for we

have the to we remain repurchasing above shares as We XX-month long the May rolling to period. part share $X able. trigger intend as continue of share distributed common over we per $X.XX shareholders are X, in for common to As per

share We repurchase the the program. latter due recognize prior above the challenging pace $X that staying trigger become in will year half this our of and timing more of to

evenly common $X distribution if surpass fall we Our the are spread trigger continue But is prices. in remain trigger, to that the plan influenced to the shares even trigger we above ability year. future quarters commodity more throughout so will by the heavily to below the required repurchasing be

may result of the opportunistically, where be enterprise similar we period may we credit enhancing which profile. debt a also retire seek below During our trigger, shareholders a would to common achieve $X and to further value transferred

our quarter between $X was profit difference reported the premium diluted reported a share. our quarter profit equity. driven now of diluted primarily adjusted preferred the and Turning paid to and share by first of $X.XX We posted redeem results. to an profit for The per per adjusted the

notice the with had due yet March as $X.X but holder preferred We billion equity payments nearly concluded of quarter to cash, the made first of to unrestricted not XX redemption requirement. XX-day

sheet balance in preferred an made. to quarter on as preferred liability captured call be holder equity cash and first in the our accrued statements reflected future equity However, the flow will as payments the is

lower pension and timing environment first was a prior commodity WTI, as partially accounts capital, flow negative during domestic payments the quarter, on realizations lower quarter-end change During we of debt, lower in a a as experienced capital interest working production of payments under and are free and which by the $X.X accrued annual were compared despite working decrease prices. sales which tax driven items, by primarily the liabilities before to price property billion payments compared for as by generated approximately cargo offset commodity typical to our in cash largely quarter, We driven and receivables, plans. lifting to period, and These modestly payable due a classified lower which compensation first accomplished Algeria. semiannual quarter, was the is net

in throughout many are the the annually reverse capital We in these the year. of first since but see payments made quarter, the for second accrued working potential quarter partly

we As financials U.S. is to the by our discussed in last and reflected be quarters. provision compared tax income our deferred in flow prior XXXX, taxpayer statement call, reduced federal which full to a expect in the cash cash

pleased OxyChem of many reviewed gas of the are our in quarter factors These expected portfolio. full business update and for to us as our first having contributed assets and in businesses. production enabled oil highlights that our and our gas excellent production a positive oil Vicki some both result performance outperformance across guidance to are year We year. quarter guidance to in throughout to the our continue on surpass high-quality first impact

Specifically, Al BOE originally per than businesses planned. the positive gas acceleration day. of to project yield confidence to production with year performance the new and in production well us increase guidance are our the full provided expected midpoint domestic higher to onshore These million results expansion our Hosn X.XXX

anticipate ahead, by the reduce optimization that the Gulf the schedule downtime and in maintenance of will timing activity we second be domestic year, Mexico. to in the of quarter of driven the our production planned of Looking onshore primarily lowest

online have production, we the X XX our the Permian unconventional the quarter that all will case our XXXX, respectively, and on U.S. first proved as the quarter. in expected discussed to onshore to and wells This last come be As the call, fewest business Rockies in turned wells first year. businesses of

expect in online turn wells by optimization the on the impact In in timing we significantly resulting and which the fluctuations fully resources and Quarterly will wells benefits the second to the year. number production half and the timing. quarter, production be of are typically second of development of driven realized higher primarily of bringing pad

to and the completed Hosn at have higher be first to production to to We which expect Algeria on Mexico and expected offset increased international annual oil will the XX%. at turnarounds will compounded is by first cash production our compared lower operating prior compared quarter production reduce quarter expect -- finalized production Hosn. that approximately second quarter we production production we scheduled Increased as mix material ramping in the sharing contract, up. our flow. just slightly Al were production of oil decreases reported The not impact production by gas Algeria, Gulf but is anticipate a Al Internationally,

of it complete. with that year we mix in second our once the oil the be the in of in our in Gulf line half While the expect year Mexico and will is will second maintenance more guidance full lower rebound quarter, be

lower volumes per to a the receding and second work a will of operating increase quarter in year. cost the of $X.XX basis the domestic Maintenance contribute associated also in BOE the latter before half price on BOE

guidance In year confidence provide another to plans reflects production anticipate latter summary, activity to robust production production for the first XXXX the strong full inventory raise OxyChem us half chlorovinyl products confidence we Despite of of the midpoint quarter. seasonality first the us to OxyChem's to OxyChem's lead in the with anticipated stronger of income to results macroeconomic approximated remain year for of second year uncertainty, the the chlorovinyl billion. reduced providing quarter and pretax Due in impressive half raise of first results, quarter. our the the orders, us the and despite remainder expect $X.X guidance XXXX. guidance year in with margins customers' levels

pretax and the in of Midstream $XX marketing quarter, our generated range. falling first income guidance million within

First timing partially transportation to due offset of marketing income capacity; oil by the optimization quarter were gas business. as the items by well method favorable results lower These as sales from equity margins WES. were from crude investment impacted in primarily

the close billion plan, XXXX which our and spending quarter to of Capital $X.X XX% capital remains billion $X.X to at billion. $X.X in approximated

capital and and to due in development the quarter We project. first the Battleground timing spending of second expect higher modernization the Rockies compared and expansion OxyChem in Permian advancement to

the fourth quarters and and second in quarter line guidance. be year spending capital full third will with that the anticipate also below We in

Overall, to excellent start an the first quarter represents XXXX.

As to shareholders favor on common our we long-term. in and we structure near advance to execute the in year, our look shifting our flow the priorities aim rest continue shareholder We ahead to of favorably and are return cash our positioned of capital the framework.

the I over will now turn call to Vicki. back

Thank you, Rob. We're now ready for your questions.

from comes question first Neal Dingmann Securities. Our from Truist Instructions] [Operator

more it basically in both you potential Permian a -- Would Or take for efficiencies, the about. very is cash with continue you free if continue with the you the I'm just heard potential areas, other question we've with just savings, call the those plan those things. you're flow have you having back those into benefits would and buybacks My that seems and get there's you of remarkable and like all? would maybe growth? at nice wondering and OFS certainly then softness

the No, -- along that would flow generate preferred any sources beyond would and incremental repurchases, we can hopefully we whatever -- cash with the of from that, go to it. share redemption and

many Great Okay. check wanted there the had just expected, as in as you really permitting, questions going anything to you like to there and you're have you it then as to off. I activity, pad completion just side. just take X secondly, fine on double hear. comment sounds to secondly, I just on just are could that's expectations -- going be the in guess quarter didn't and far size doing DJ as the Maybe really all, you're And first on think And that. different at the I On pads, I DJ. well then

I'll pass Yes. Richard. to this

Neil, Yes, our out good really appreciate quarter it. team. a for looking and well Rockies

connect really good things. I they're the a putting So pieces together, just maybe couple of appreciate that

were is to that A playing thing that first really that or lot that But quarter. they've in X most of in the is to now at through last thing has meaningful end that, the their we quarter. been quite of gas very the in earlier wedge less on those wells introduced lot they've they've into wells We wells saw really quarter of second which is they of done, base a boost. a are lift continue think performance, strong addition production strong system. production new brought the on did The some performance. few year base. I that in these do all even base turned year optimize first and us the to able in We'll legacy a gave of

But helpful see the of won't been much side. quite base bump. on we that that's as So

included On XX-hour see performance down new to peak side, out good C able obviously, I to to ] well to continue fundamentally this to well. mean, the new the in space Rockies. for in our of the a we're this we our record certain thing been Nio well similar areas, do I'd we say We've in how And see development Permian. happy [ that's performance

really there where to profit been increase have then we're peak talk And spacing, continuing been about which concentration to very XX it, have and down that just able We've only XX%. then the about the market time X wells down that traditionally to that reduce, areas there to per of many XX. in turning able is and our but the So production. section, couple been frac efficiency might to we're we as increase team on, been not time to with a to that the online, has focused

we're about And the very in so year. being how for thoughtful of rest this the operational building ramp

outlook. But second XX wells couple points, you of to end in anticipate plan. we I through we last of the that as the kind XX per that the of was year, had guess, quarter, wells fit first said, quarter X the quarter Really, per total delivered year

definitely, on delivery. back terms picking So in up of that well

second at looking are better of just plan. So That some last able half we cycle then be of bottom second first and the up the line, second half really on half, to the we turn if than year. for growth of as to those the the we'll activity expected in both of last year, we half original the decline and as communicated underinvestment you the look call, through picked

with pleased the very team So there.

Sachs. Mehta Neil question comes Our from Goldman from next

then bit short-term and second carbon. quarter, like of The is looked low question is price I -- just question in the were little more first realizations around the soft. it a a

of delta that, drive so did clarify on But it can was you it just as about talk turnarounds some just like, sounds around and And some consensus? that side. versus refining the

X think key were Well, there components Neil, I that. of

First of price, to really impacted all, barrel. per NYMEX end realizations switch the from March, the by of backwardation we've at roll looking seen at of terms market average in $X.XX the calendar contango about month the

the across there starting So portfolio. domestic

But there Following on. going that, time, Gulf at of amazing quarter. same turnarounds refineries that it terms of Coast Mexico, in on the had the an the Gulf had were

fourth from realizations moving per first barrel. about the to WTI quarter so quarter, And against by the dropped $X.XX

an was well, there a Additionally, realizations caused outage, there barrel. by about outage the third-party Basin as in DJ $X to which drop

really with oil So altogether, impacted realizations. those that components

That's that if DAC-X. of give -- the in What to market well development? you the voluntary And as really the what's progress closer towards to the project as you terms bring the can thoughts as could update then help on money? latest the And business helpful. then an low-carbon is on your

had I'll with a -- an the market? start under teams Do started where we're And headed carbon it at the about excited we groundbreaking the want it. we'll Stratos. construction. excited DAC-X, very the well, called and the now that It's official groundbreaking. naming about already are moving business, low-carbon with and work along talk you at be to really currently about groundbreaking the We venture finally building The last quarter. had on It's Basin. Permian official very in the exciting end of

other in that there. forward on the Yes, subsurface progress. sequestration the moving or understanding Coast, of updates move just DAC-X continue to but to on hubs with couple kind of in to sure. the the continue And Like Permian, then maybe low-carbon doing said, Gulf a obviously, of work we're kind Vicki our with progress broadly the add

front we our Ranch to then in wells that, of we're to kind we've X there. King submitted making the and X Permian Class stratigraphic do support of the continue go of piece Really, test so more submissions to that. call more X X X hubs that'll wells big to plans there our the for -- drill in Class operations what In area,

side of both prepare and upfront to So both the to those DAC areas. that for continue in from work really side kind development, point the do source

see growing In for to the terms voluntary market, of strong continue the or sales. our market CDR

few things lot airlines as close removals to there. of over carbon I around as and sort some well think about, compliance continued specifically kind part turning on aviation talked transportation have having these form to continued a say, really solution. I think that of anticipate getting that of of sustainable we've next in of to really updates especially some as portfolio But the months, is globally up, to meaningful market things that fuels we'll have as heavy-duty I'd Europe, recognize the

in seeing kind to we're addition the what we form So that. with the IRA see U.S. to help in some support policy of

with of appreciate strong is So market working these removals, the the role markets. of the that voluntary in front emergence understand We that. partners understand carbon compliance some there of

to catalyze this And so they're compliance us really technology, part long-term doing while we market help need. their down, cost that fit bring this

certainly think, makes we updates, on more I progress, So expectations more ranges DAC within fitting as give hope year projects. for revenue the side but have the this our we and to later the that

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

I And the something night it don't a it the the you struck who a because guess market saw earnings, of Mexico obviously remember of people this Anadarko didn't cover least price of cover share I that reaction Gulf mean and watching -- like. lot to me maintenance. perhaps last I've follow-ups the didn't of couple your at got seasonality

just of explain relates minute a running to take production? as could you it if wonder I that you're So how seasonality business to the

Yes. for right. up. Doug, you're And you, bringing Thank yes, that

want good I first was in because, that a first What's that we Mexico. an an such What's quarter that's we a typical. realizes. quarter our make that, is well year quarter. of by incredible operating pretty with Mexico in This Gulf happened in performance, teams very reason understood. I terms we've is for the lowest that different And very, for of not had downtime very first all, us everybody now sure this to forecast incredible had the of It Gulf had of had the is, think the while. performance such very, first in we is

Caesar-Tonga excellence we subsea expansion -- come system online. had the or system Secondly,

So from project. from day that incremental gross we had increase a XX,XXX barrel an Caesar-Tonga, of per

was been Mountain what some would good So propped maintenance Horn second have first and our really the QX in quarter performance, of lower by up transfer downtime quarter. the to

The some reason we to was in the the that moved issues from materials second first quarter needed just chain supplier. supply quarter we getting from

any had So normal this had the looked -- would have our year if do. like as maintenance we to been able to we do planned

Now is gotten a biggest we what's the people I number quarter. concerned is going offshore. from in of to Horn producers such have second lower think one But Mountain that XXX the

in a that So maintenance along we along have another schedule with is we want to quarter on doing projects impactful. do. some with the couple that, maintenance of work And well that given

full We day. the a year So still looks were really XXX,XXX good. barrels at

to much higher much, the that than again, seeing. looks QX, we're used than that it changed. -- we how used than people it's the in And and others with much be that are used timing of just done maintenance along QX wasn't It's So lumpier will and in production that to to. done because bigger hasn't are

So the And... for thanks question.

that the remarkable entirely was thought of seem appreciate primary clarification, the be I legacy it'd it to Anadarko night, that just after and discussions Yes. normal. I that, worth because last reminding everyone the focus Vicki, be that result would

guess, you did a or clarification. quite things question. Rob, is bit. think So the at for But thank might still that wide. remarks Rob inflation, mentioned is a My really, rolling But follow-up Vicki your it's least her I guidance in CapEx little over be you I

as us trend the going? could wonder the you hat you see where tip just give I if a So of to

Should led? starting was to that chance more that you a we be more a in is -- reasonable might coming that you've the got of it had lower Or of end that baked already range? think amount now inflation activity not happen? Or in of towards

from I Richard, that things we comments, in a seeing I also is think plateauing of and are as point. at Vicki's discussion this sort heard

fair inflation pieces pressures the are There's wage Some amount a over. are we rolling that still Permian in still seeing. of

going say roll maintained to that to are we've year wouldn't over ready committed for we're and the of balance I to that so things So the guidance. fact the decline

the lower back are on activity and cost, earlier we repurchases fortunate the off, balance to we the additional some things would into commented share a to level of if in the that Richard comments. that then it allows enough Vicki same fall As year. additional probably roll has question continue for of us have And

Yes. is continued was Rob. element I other would say in -- efficiency factor I that's just I'd add going one. the we improvement. to perfect,

up getting half the ramping anticipating these with in We hitting Doug, our frac we're improvement our mean the rigs highlighted total, the year, So we continued second it's year I cores. on last this year. started kind of of singular steady wells expect and state do but efficiencies. some of in records, really

the little a bit in as faster just efficiency. leave of gain little that. gets burn on we So a room where rate we

question Our from Royall next JPMorgan. comes from John

chemicals. question So on first my is

full in year in XQ, but guide. line were You raised your you

housing feel year, remainder be giving it to there more does still So you're seeing the like the the challenges confidence should something some market. you in but that's of

chems looking in So appears what guidance on the just year so for in early some an and raised to uncertain color the be environment?

I actually in pretty you've your John, think well characterized question. Yes, it

to demand compared you the if down last first year-over-year. domestic quarter XX% year, look So it's at through PVC about

is year-over-year. However, first that quarter as XX% almost the what up business has in export the picked it's slack seen up we've

we converters believe mortgage low regional what PVC demand the many there's that's that calls, for more encouraging typical time sector. and X.X% demand, about no last rates of But this year. the entering by X.X%, build heart construction. bank prior up construction is So for domestic remain combined for a in as on inventories buyers doubt, little have sort to the of conditions macro inflation, year issues be construction for between PVC season. discussed housing really that reluctant a we And we're driving of would versus country inventories for up with softness end driven being as on We that still

and at lot the So reflects ethylene construction, continued of of some I and business for of in lower macro cautious create the does prices the be lower stickier and with energy a global also the they're in would that prices business. prices present the still resulting That's margin but gas still there's uncertainty domestic guidance part demand firmly the conditions. trajectory the our demand We pent-up just terms in for believe that business say, levels. even that opportunity raise. however, the might lower these of

of caustic on the particularly automotive General would balanced along side certainly is the this year, business, sort off prior remains subdued. we're I of say conditions. manufacturing from type seeing

domestic year, it but higher So than is certainly is to demand before. similar availability last was

seeing erosion the of business. in that in we're price so caustic And the side some continually result

still happen the economy to Europe assuming year continues certainly that open balance Chinese rapidly, If take the of favorable business. of of into more we're the inventories middle slowly. in unwinding the and So the would to those the one either then be that

and stability lower things of reaching reflects in increase with some at preserving a some feedstock costs. of around margins least next that quarter guidance then point so kind the So optimism really or the

question is next Great. on of preferred. the then my the And paydown

including stay go-forward about? million-ish just that buyback assuming price the below up downside end expect commodity you to $X go a going rate, and the a the run a is think we some a back case premium, it, and $X think share? gave on LTM. You you click that might there share above on Is color $XXX pull below to if And where you good

to cash I on just do to we monitoring But and say going available. -- would shares the We're to free can as trigger the the have we're that buy that. use preferred and to cash it's continue we that. based

an outlook that. have on We

pretty being around the what year the like. look of rest we're So thoughtful might

Yes, year, concentration in it is because it's share it last and of certainly of program QX. the lumpier, this year more makes challenging

our probably $X, be But oil we've the program $XX earlier, above range even stay think shareholder would basis be comments return point. annualized our we on to in as of we the I as talked prices an below intention continuing as Vicki that stock. is is continually would fall her to the buyback able want made part to trigger

to to below if continue buybacks. the our to is even return we so $X, through fall And shareholders value intention

Paul next Scotiabank. from comes question Our Cheng from

underlying is to first spot didn't the deflationary prices second half? back want see build into have material much -- how suppose the the included you That's to the inflation budget. I And we subject in go raw you question. if deflationary? that regional you budget? any the that and your do And in this in just What's year service into your be really will Rob, for

The prepared remarks, will Permian? question DJ is that about And I the second come on in about the talk the remaining Basin in be each the well think, How the of for variable year. quarter. that, on pretty stream

both try start I'll -- on to me let Paul, of those.

This the of are look we terms year-on-year, around U.S. when In really XX%. is we domestic inflation, in

efficiencies. of Of that through course, XX%. internationally, the we in that near didn't offset had that. budget about see We embedded were But in operational looking X U.S., around to plans our at

for target on generally we're both. So

bigger and Let me the then of few a deconstruct second of half kind components. the

the some of of fuel, costs we some OCTG, you the are we power those as the are second think obviously, potential. of soften. So and things see When about types that labor seeing year, things half components,

front. our a either few and we'll there, exposed of are rigs relationships that about, also that a pricing and balance like of talk little quite we're we up, that with We longer-term frac service so we to with able short-term our partners have and be kind long-term way cores bit have on though,

areas for to big see has see but do kind to fracs steady, this market the OCTG of we're is and continuing we'll market. Obviously, rigs We'll do. looking the watch what rest the year. So what the we're of

us the we the primary we're watch or sand that regional probably on supplier that in point front more would but sand. and so be We're using even is would some impact then Rockies. Permian, choices, to different some other continues the our sand there And seeing opportunity that. in There's in

change variables of we're that will us. did the to budget, the the So thinking that about our or way looking want we're not at watching this note point, change those we're are to we key but kind impact outlook

similar of what little kind wells had as And lot steady a the XXX, XX to in really, give more bit DJ. change, count as drastic then seeing of the we're in terms But sort of as sequencing. not quite that first around of his see said we around online what in We'll quarter. well the type Permian, color, of more Rob state And hit kind a XXX. happened, prepared in just remarks, development

had So count. with well quarter, going smaller ramp-up you're where the weather, pads then and fourth if you think exposed the about we into to

derisk in fourth was really the really and we production did that first to in so it production the kind quarter, quarter. of the And

well Basin, wells As Midland pad. of they've quarter, north we of kind pads, our in the XX gone started Basin, first of Delaware many per

the standpoint, sequencing online. So production does for and we lot you a state well as count both that's second in But really low that of quarter, to -- from residual was SIMOPS count and the change go have steady of do grew year. on definitely the more those half quarter us the kind value the second first expect we of into of see but better while DUC a it the kind hit we of in

hopefully, there. bit helps little a So that

next from Leo MKM. Our from question Mariani comes ROTH

sort money in that NET get I kind just just the on I a it that maybe wanted you follow money here. recently, And guess low color around more business? bit kind more I came here. the is what venture confidence up putting of wanted there? guys business Power little incremental And of into of to out why to invested carbon the some

I the in here in see point you this carbon something all think for funding? here out just do at wanted 'XX then there? time. funding maybe be could the conversations Are if on ventures, in of really Or sticking detailed And to sort that having you gets there DACs on there was done low update any

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combines look -- with it, it you when hydrocarbon gases of instead combust hydrocarbon And gases at air. oxygen

of -- So is turbine, you drives organics. have it's created part captured on And volatile the no the the which the COX process. as and then

need of and of it gas all all at things that a well. these will the do the a the build opportunity Appalachia, other the there, you And to the the of we Permian that needed creates in and So it does look Haynesville, the gas to lot as things. DJ, companies the gas lot

Our and efficient. turbines confidence this are Baker now they the that it equity have we the in was process, also fact to redesigning more by owner bolstered as make an

a will which power traditional capture So you carbon than maybe before, would start the we little we in bit be cost when this able that of are the put a XXXX less on plant what building time should frame or if it. expect be be this, to

it's a very technology. flexible So

gas to that direct emission-free our the We capture will be and future, oil the the use our will units. the air power one operations, of first sources be in provide for power we building for Basin Permian one then it and in of those

a we've well time Power up lines obviously, have. help Yes. would for to like capture, COX. first is team, Power, and fit with that Vicki thing getting on but and But not that to other The very that only only what the plant we gas said, FEED decarbonize on power, offtake the oil I need of add we for NET NET great that operations started XXXX the it's frame direct air

a as COX, So and use transition more able to really we it's look be anthropogenic fit. to great

DAC, with and our beyond but development for To success on the we commercial Vicki that -- as that continue not to able the too, we that know with financial for growing reiterate, beyond. absolutely as support we Plant develop can go will this, market to DAC-X for So to I and be about only especially DAC-X think is think funding us We really see the into. fit plan. X, to we need help

forward. of it continue to into of capitalization to to prepared on answered CDR But go We kind kind we this think this meaningfully, to any be give about we want forward. think updates next the the the progress as or then to as and give and late project as progress Obviously, I how the on that market able comes year. we So we'll caused updates project that be sales as of earlier, as year go year meaningful continues. want we I

what too... I guess add I And would that like to

That's Okay. clear enough.

the to out next to be range. will basically, look that have One what than the this what and years. be funds that going of that Leo. more million at to cost add lot million over provide like It X to to of is to a I'd we in $XXX us for is wouldn't as Sorry, be X would our free the cash $XXX thing flow we it

that our that, a which, chemicals, looking So I is we've capital is development, one forward, program our gas so That capital to that we're the people with that want oil important is that. a corporation's think don't to, that midstream, cash as of make in much spending can't capital we others, way of sure fits our of shares. understand as future, priorities to of big everybody want investing And flow to going the the be the accomplish established, in going and that, in for any invested priorities. ourselves. the and That's part that have repurchase I

we go repurchases, had to our for X% of programs, with a cash, situation programs. of capital to we XX% and would If reduction, -- debt reduction. X share those capital available out but to year, XX% programs, capital to that and up we share repurchases potentially XX% similar go cash last XX% kind debt would had that the example, and to For $XX.X billion XX% to debt to share the buckets, went repurchases of reduction,

a So need really where the able do. -- we're to point we're that something let to this it's grow committed not that at to is a not buyback capital shares we is our level to to very not

Very kind EBITDA 'XX. of appreciate on comment $XXX million of of over sort then follow-up on to chemicals. we kind the as Okay. Very just expansion thorough $XXX eventually much this get million towards answer. time on guys. that, your And to getting a

Can the EBITDA early that would in late that XXXX? some get ramp could as a Could trying of get potential of sense mentioned how as to kind start number comments like You be next even as you of that Just year? prepared something 'XX. significant as we that soon time. X/X seeing to even start over

to project. days Leo, the early the million million Yes. project smaller range. the beyond given for The million that the $XX is contribution from the expansion we've number battleground in $XXX $XXX from It's to in going XXXX. project out be that's EBITDA

Roger from Fargo Wells Read Securities. from The next comes question

the about want Leo's I make NET just understood I off to or clarify X just DAC that. Yes. Vicki, other? Maybe CapEx, your inclusive per and of question to to quick Power just was to million sure the the year. That's $XXX X X million comment, or $XXX

with That's if our good with -- a capital. conversations And partner next or that year And carbon maybe not could low or ventures having in this we fact, is assuming -- this are that bring all year with preferred X that really don't a of materialize sometime partner. we in year. some

So that want that, that Otherwise, with at we to to expect potentially what do funding. we're guys But of is than we spend make if partner. relate looking would maximum we lower don't, a spend that's get the have. we to we a some sure having you

maintaining question, of the is and price going ties on to be. know other then the this what appreciate my I None commodity of goal of an the clarification. annual And repurchase basis. $X into common trailing Okay. us

simply X the it anytime pointed as back acreage -- companies things be bit little other we something they We've guess, trimming in out of the identifying presentation, some holdings in got as, could the a call completing noncore I soon. You've some or won't right, the upstream U.S. largest or and of seen drilling

if used be be would any plug coming acreage is those type of to there appreciated. of front or that sort sales on can forward? lumpiness Just anything proceeds So they you offer that's arise to asset gaps the offset other or could

considering being the And do of do the reality we the to we're of value scale mature be we of continuation cliff would to the it to for the would that whether say -- it is for there's is optional repurchase certainly position that is option enough think relative valuations things other make the you right a of one to do, an now. meet soon be divestitures, be this large source continue things that that looking options would decision preferred, to for would at the But decisions? how smaller program, the we're are point. potentially us and I there. when the versus best continue you facing doubt redemption funding that of have we consider. the Well, And we at -- when that you about enough I would right always do make this we today able and that's is And we large. We sure the where are making you're to though question our divesting when

I concludes This for more closing are Vicki There would over any to the our Instructions] queue. remarks. to no conference [Operator questions the back like session. Hollub turn in question-and-answer

of our our operations, starting doing in And DJ, Doug and But losing fact, of to in think quality there's a new say call are that the that among any as reason the doing for teams reaction to seeing innovate, Mexico in to there's performance, to I clearly new industry, technique that we're looking improvement past well you subsea our show of losing pumping Permian Rockies, they optimize. we're could asset installations, asset -- differently. at that about some any productivity if investors at what Oman Permian as continuing wonder think our out, earnings in ways the seismic in And And pointed continue quality, question are that with in in our not been that also lot performance. what talked at to today. things We're next show the assets. we'll our quality, in mention performance. to our the the the that's looking with particularly at nobody well technically also our of not I will we're respect continue today, data I systems performance as look I a And closing our capabilities. the look had execution, of just know in the in part of Gulf with concerns the there and trying I

the in And I to continue we our our think every that to teams. our year teams for I company, have want better performance because thank they push the quality and seen for that or of and degradation envelope get not better.

the productivity where strange And so a scenario where, today are a is to year, get any our doing to think what I be don't production of in there continuing better. lowest the is and we we're should second but happens of and about be it's just quarter, kind concern it

call So with thank today. you the in want all participating that, for I to

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

may You now disconnect.