Occidental Petroleum (OXY) 3 Aug 232023 Q2 Earnings call transcript

Good afternoon, and welcome to Occidental's Second 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, Drew. thank Call. participating and Quarter Occidental's everyone, Conference XXXX afternoon, you in for Second 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. and are to Neil, I'd like afternoon, home you, things good drive X today. There Thank

our table of the First, for record continue set assets portfolio to results.

investors And to operational to Second, make last year's our excellent our how last and teams I want quarter's bottom line. see metrics. that outperformed sure the flows

strategic our take to shareholder support better even improvements and continue to drive to returns. actions our ability operational Third,

a XX% reservoirs in The Oman, assets in XX% gas assets. conventional. Permian is X international begin operate and shale blend shale with portfolio. We international of had than are Algeria. complementary our Dhabi from assets GoM and return the we and are short-cycle, and the of I'll lower and from XX% gas our the conventional that that the Oxy's solid oil with Rockies and assets had. States. Abu our decline, countries, They quality in and is high-return More ever in Permian, highest oil the United the most unique along reservoirs production only of production

gas approximately Our NGLs oil, United in XX% XX% year XX% production be to XX% XXXX mix and worldwide gas of is expected and the the is full States.

This the shale resilience during provides adjust flexibility for opportunity to assets from high XXXX oil scale help done performance will provides growth has while during quickly activity assurance price along low so we cash and cash provide The and similar to The of combination record and To decarbonize summarize, way cycles. XXXX. portfolio, had others generated emergencies. midstream business with that in and by the with exceptional portfolio provides price providing diverse that incremental throughout during low years gas and framework in for cycles assets, deep if ventures the catastrophes over support a has last at we carbon shareholder a environment Our and needed. OxyChem a flow Oxy moderate the of levels business Oxy couple versus the and cash support necessary to conventional the previously our to flow commodity shareholders. the have assets cycles, the generated value our flow price and flows return sustainability

Rockies, new of midpoint accumulated us operational now shift the outperformance Let's raise day, along full production the was guidance. production to Strong with the XX,XXX to well year by again and per by quarter BOE volumes operational base our exceeded of production performance performance, higher-than-expected enabling royalties. In driven improved nonoperated receipt second and guidance excellence.

including basis work of XX,XXX set Our a diligent than faster over new drilling feet record Rockies per the only team's several in hours. XX The on foot company-wide first teams drilled day lateral records, did XX% quarter. of they in Oxy

feet. days years ago, an Just drill of average XX,XXX industry to XX the took it XX

and operability particularly in precious. higher production well better-than-expected X our Permian new top Our in delivered Mexico, New new units drilling and spot performance, space

about the XX time reality. made pumping hours ago, XX teams Four have same total previous Oxy's hours and minutes. a our of record unthinkable, then hours but continuous have taken Delaware nearly XX frac was XX for Our back hours. for shattered completions this XX job years team would by a

in pumping efficiencies completions by to We the generated that time advancements will drilling cost result expect market. and and in reduce lower

Mexico, on safely the asset completed maintenance we longevity. Gulf activities and focused seasonal integrity Offshore of in

in that of result a impact to base planned this maintenance, X Excluding Bcf This our investment. we means a expanded continued than we teamwork online the incremental Internationally, of a results. very as platforms. now or across uptime production the day performance together, months ADNOC. improved benefited Bcf day planned, with capital Hosn X.XX plan our expansion and higher came delivered partner, X teams deliver strong to successfully stages have multiple earlier a small Al great from The from

and provides the prices. consistently awarded Block Oman initial are XX-hour OxyChem BOE to in than provides the exploration production our a due decade, is it quarterly a per a day to Oman asset to month worldwide. XX, cash to which we flow quarter highest subsurface during with the is near-field the high-quality where production we soda the from and in collaboration of sales second generating XXXX cycle. business X,XXX our in less production benefits well, caustic was resilience of price the of show our continue This on drilled greater-than-expected in It are Energy, In rich we our reductions in OxyChem our which outperformed and and opportunities the country initial we also a one about of were positive and now by completion. portfolio in oil characterization techniques feedstock in test, commodity gas test balance block delivered producer. throughout Ministry the of largest valuable differentiators. and diversification independent free We the

results of our wells excellence to X in how are get portfolio last to well like shareholder deep the I'd we sustainability which our focus years. continues by talk returns. to And has resulted the starting same in that is Basin, improved XX-month the we're on X enhancing Permian, exceed better. The the DJ at Now last designs improvement extending and volumes where subsurface to design well supported roughly long-term improved proprietary our cost. are operational in well see and And rate near- stronger maximize in less we and delivered over about to about well have cumulative XX% getting XX% inventory, improved pace in are on years. our single In significantly our X XXXX. productivity the have reserves Oxy's the of application with modeling,

secondary to -- last This replacement modeling our year. addition, for top-tier teams led ratio sorry, which are organic performers. expertise, our In of was to reserves upgrades the continuing our to key U.S. has benches XXX% advance

of our top-tier benches, to our were secondary adds. to that these our Let again. me actually point benches to make XXX% year, try upgrades to by replace we reserve able with Last because production

XX the a downturn of XXX% Secondary bench in progressing in upgrades XXX% to with Overall, XXXX years, only in with replaced have our XXXX we a in XXXX. are being annual production. pandemic. of price XX last exceptions The

Converting down DD&A lower-tier development are our our will and producing more we benches adding to ratios. adding than lower high drive each Not DD&A cost we further year, which top a reserves achieve earnings current ability we're are only rate, that will extend to than the up. tier finding and is at production replacement reserves

our shareholder results strong of delivered portfolio and execution framework. differentiated return support the by teams XXXX Our for provided our

and generated we've billion Common along of completed dividend equity. share our common the of equity. quarter, have approximately $X.X repurchases, flow, approximately redemptions now enabled of second with share $X repurchased billion To we free $XXX repurchase program. cash additional the During significant date, XX% shares preferred our million preferred of redeemed

to the call over now Rob. I'll turn

everyone. afternoon, you, Vicki, and good Thank

$X.XX quarter, we second contract and driven by posted tax profit between impacts remediation of During the the profit production our on an settlement. PSC share $X.XX Difference noncore of deferred from per diluted impairments Algeria undeveloped reported adjusted was and per environmental an diluted share. offset a renewal, for by profit partially sharing or reported adjusted acreage primarily

enables execution In working flow several the second free maintenance of and despite of oil cash billion capital gas for quarter, businesses. over across $X strong activities planned our operational

equity LCVs concluded with common $XXX in and nearly power, in quarter We payments the debt capital $XXX settled third semiannually $XXX share premiums, in related experienced of net quarters, we working redemptions barrels million second Following unrestricted preferred on second quarter of capital which by and cash. change approximately positive of first billion second investment to a repurchases reductions and million a approximately million also contributes and working the during change. prices the paid in quarter over Interest fewer quarter-end. commodity generally positive are shipment driven primarily $X to

of second this our capital. taxes quarter, the $XXX million cash payment U.S. paid made netted year, a which $XX taxes taxes of subsequent are working we state year were made this state million, cash annually. and federal in similar We of federal During anticipate out tax quarters those first we

international tax quarter grew prior income the subject second mix. in effective which income, jurisdictional tax a proportion The from rate the increased rate modest Our to a to of change higher quarter. statutory our second quarter is during due

We adjusted we therefore closely more a for with guiding tax second quarter rate our are of quarter rate. to as XX% will expect be tax third going effective rate aligned the forward minimum effective the

turn third year full I our guidance. will to now and quarter

us guidance a also full X.X midpoint largest Vicki year. driver catalyst reduce strong in and across the production to This per the As is year this the our outperformance fourth the year primary our to to anticipation expected oil over slight raised before its our businesses. our outperformance quarter a third serves grow is Rockies of production guidance. enables gas in just lowest in discussed, and point year of oil year to in continues to quarter. to BOE excellence our the mix technical to beginning operational to and change Reported production full guidance day raise million drive full exit just Rockies to

guiding a were compared the In the for slightly Mexico, due second contingency in of production quarter quarter to to Gulf third lower seasonal we the weather.

opportunities we turnaround reduce impacts downtime the this due weather Al the from result Hosn highest to less year domestic basis half quarter on in of ? costs when $X.XX per to maintenance BOE first sharing in a brought as various international XXXX as production and planned project third expected expansion forward plant BOE Internationally, well contracts. than production operating expect are to compared our timing higher to contingency The as quarter. as normalizing fourth to well overall

but is flow. new have decreased the production, material a mentioned, which increased As have international impact will the previously cash to reduction we imported slightly on be operating reported not in the barrels PSC, offset expected by Algeria production

was and businesses of Permian Overall, the characterized first nonrecurring from in by of Gulf production X events. XXXX strong Rockies, production latter benefiting with Mexico, half also

and the time-to-market quarter in only momentum anticipated the the second per X.X the below be we better third to result average in the decrease it implies of contingency of company the weather where mentioned production lower quarter be previously year-to-date, which year year half have Mexico. third the million production will the by The is BOE compared from Gulf in of likely year, to the second day. We first. driven mainly in to is the total benefiting when will wells is production expect quarter production Reduced in half and

guidance [Indiscernible] XXXX year our expected the largely volume weather to our full enter GoM expect does we in X strong shift production the quarter production a similar XXXX, approximately anticipate to We due of However, XX%, of quarter with will not change improved represent to and be a fourth in production first output Furthermore, fourth production quarters our cadence. implies contingency. trajectory.

now OxyChem. Shifting to

quarter. and in in second the we weakening see PVC during guidance, original anticipated continue the caustic to soda pricing As

pretax full strong will ever year third our midpoint which pretax income year guidance another highest of OxyChem. at in a for However, our unchanged $X.X remains represent income billion

expect for represent years, recent will to that the seasonality also our the meaning quarter a earnings We the normalized chemicals to return to year. more compared lowest business fourth

business. reliable fourth year As full typically the previous changes marketing the our inherent due year. year to from calls, not we through for second We mentioned the have in midstream on seasonality the over market of and ahead roll guidance a half expected forward the revised quarter is this

pipe our expected a the annual Midland are to revision, further approximately margins has barrel. tariff generated crude by from Gulf to following Coast U.S. The the cost which compress $X.XX FERC increased shipping

capacity decrease. to expected Over we the the market same long-haul is period, price

quarter. Additionally, have opportunities soften to continued the Hosn narrow first we sulfur market to pricing anticipate the half the is multiple second fewer of as spreads for and in produced gas year. find at across expected opportunities basins in Also, generated Al

approximately billion. spending during was $X.X the quarter Capital

during fourth We the quarter. business We settlement. expect third fourth plan. our reduction more quarter gross million decrease $XXX capital was reduced slightly which working the the in the alignment quarter pronounced second a activity interest with anticipate receiving the expected with and in driven original by is decrease in quarter [Indiscernible] to in The Permian, with primarily associated

full expense report our year on will down, adjusted guidance While remains basis overhead our this an it unchanged. to drive overhead settlement --

Turning now to returns. shareholder

approximately advanced $XXX As further of second in quarter the preferred enabled first Vicki which return mentioned, million equity preferred we in million the second the additional preferred billion shareholder quarter, of we've redemption equity beginning $XXX a year common $X.X we resulted of After annual to of framework redemptions. of through that during the our been $XXX elimination shares, strong of over repurchase of equity have was redemptions triggered the preferred start million at to the in Year-to-date, the outstanding $XX XX% holder preferred premium quarter. of of date with equity approximately or XX% payments equity million. Preferred dividends. the over

for concentration $X.XX third repurchase drop share. XXXX, need that is during redeeming equity, with the commodity we coupled third shareholder EPI remain the share the common the curve distributions of likely curve, As of than for higher prices. primarily the would Due fall commodity quarter XXXX. be the preferred below will it the trigger, presently to of to share price influenced likely the rolling our begin XX-month of August the $X indicates the to will cumulative be what The the distributions common $X to totaled again, heavily per in above X, per current by If remainder forward ability below trigger prices redemption us quarter.

redeeming committed aren't our of a $X equity shareholder billion program, share the we to for period remain term continue Even we our if time, purchase program. including able to preferred

share Sustained years our our efforts the common believe and investment-grade our pay at to over several of earnings our count asset improved to as significantly status Oxy grade return it quarter the investment debt basic down lowest the the third profile, that range common exceptional have is to Our resulting per diversify in flow the culminating since high-quality past ratings to We share deleverage credit reflect XXXX, portfolio accretion Fitch our shareholders. and in credit upgraded a when May. operations, cash matures. commitment

reporting strong full year second guidance our forward the Our and solid quarter towards progress progression to on for We look advances. demonstrates year Oxy. year results additional another as

turn back Vicki. I will to now the call over

you, Thank Rob.

also closing to dioxide this Before the the our pleased removal that agreement we briefly agreement, that sequestration first work announce carbon Japan's the like a platform accelerate and management and We're and week. sign the U.S. that X carbon we investment ANA made intend agreement mention we'd to that subsidiary, We were hubs low our glad ADNOC, in credit with became in UAE. first-of-its-kind to shared opportunities in will today, world to goals. ventures a carbon capture direct air them. zero carbon from partners, to long-standing purchase to with evaluate dioxide this With develop net to announce announcements X.X. Airlines about a airline our We're excited happy

LCV, year. exciting We update you of providing look a have to more towards developments and this end the many taking forward comprehensive place we in

will for that, the questions. With we call open now

question [Operator Instructions] Doug comes of America. Leggate with The first Bank from

the about that your could My you Vicki, in and guess, as frankly, the productivity at on going you're grow you your strategy? interpreting I wedge production Because wells to wonder meaningfully, is on seek years. cut not is to I the prior summarize, showing think did suggest going either you're grow you've repeatability latest suggested would step-up correctly. to budget impact slide of refer productivity with guidance to to or this your to a capital -- you production hold if if step-up question, focus But level. it flatter to as with deck relative that you in performance would how a stunning your that I quite which production the I'm

are you Or production? with capital curious, CapEx? going get take I'm So is more to the to efficient prepared lower it

I've lot least put I've started industry had with it. Doug, thought shale or we I'm be go that play team to when extensive in long a a shale. XXXX more the do incredibly you can very what model was It's where But some going of we have XXX than conventional. it over you, Well, would And for needs as we plan just work a say keep were time tell that in intend our that much the could of our drill statistical at really together and maybe of plan we the to the we a and it this in to as teams good, of XX% reservoirs conventional more and time, our activity years. seen a capital we wells and would took okay. kind I be been done done XX% done. to impressed back to had development, work complex them step be

on So we incredibly that the work sophisticated do put we they've possible, on done that most together focused well. trying the and really a to subsurface could sure team make

how to But able in say, get slides where that out with you think. be would it. do, proprietary understanding to And the this more with our but for stop teams the had phenomenal, beyond doing, asked it. highlight to on continue I I to well to the most to what about being as I to lot to to some thinking on -- can get we we were to pretty the we've X today, and plateauing a and the respect years, to were X learnings subsurface because we past as talking now today keep slide are we're but the that things prepared do in what using our we and out sharing is the we do. to just not that too they me, We But something able close share I've company, is, it's I was And go teams where things would the and ever shareholders we're years, shared surprise only to are. also we so to oil in it's -- pathway continue important thought to map to getting our we that industry that's this deck, of understand

done We're to team River those the from the now Permian. going to apply the to it the And learnings it. also using taking They've in we're and We've -- Basin. and I well Permian this, taken mean DJ in we're the Powder Permian. the through incredibly moved

ideas will River. business methodology So also to be success we're bit to we with appraisal And to what next terms using our a phenomenal it, will our able And on River later. going to are of across think River. we're has and done similar is do seeing things rate And able do, some about to sharing excited there. there. Richard same Powder team by did sort want other in I the improve Powder the to in we're we basin, beginning good team think take that where how results the work see that Gulf But units. part of Oxy. below-the-salt of amazing within been Mexico while they've areas the it take we to take concept being the northern about more say noncore an is, little the of our The a one Powder Southern Powder River impairment the about areas, And we to in

those has ideas GoM think you with exploring and generated strengths, the I the this the for put subsurface team they the take I but take, our they we use shale really team But that think more development, this our start various that to to think methodology shale approach and we reservoirs even reservoirs that conventional have and and there learnings conventional. flow this expertise the today, working conventional of and I that conventional cross be apply shale from with it would conventional to applying

I is in I've or doing it today. industry the think heard anybody it's beyond seen that what about

and and the we're execute to question with is doing to a teams net want that comes value at your happy value. grow. present we're going to is developments to growth production to do the well. back when get it generates the don't that in from going We said our said, be to pace production, target that. just the to with are we and And didn't We never they're target. it increase, But looks on So capital want like result program, And the ready most our doing value creation. incredibly that doing creation that them that, we're

we're what getting here. So we'll take

hard Do it production -- out margin when anticipate QX? any that I what what I've the about got My very follow-up, the portfolio. as something We wonder of Anadarko the happens is fourth have those -- quarter just dips profile, ordinarily that and assets are of think is to you the in in kind capacity? quarter. do confirm in we perhaps case if legacy flow capacity quick And production the portfolio. talked in the you before, and lost you a highest we've is, presumably, so know could rebound earnings the second which today? and cash it's you that is can question your you third

good. We acquisition, The trouble to Mexico, Yes. come are equal the going in in really, -- they were Anadarko that get really here. in do myself tier. and knew We would Texas, the our were I'm really we thought New had to to and Southeast working top they almost legacy we be when Delaware assets

I were, New I think they Southeast thought, than while Mexico. a better for

that on and would say one New prove happen that. hallway decided think they in the I to Mexico Southeast I wrong the team day, me

forward. going So you that incredibly are They add? and Mexico say of something are Delaware Richard, a and quality, part both both to us. to our would important Southeast they're I very high had Texas New program

on and Anadarko. even just portfolio that in talk when add Maybe help we assets to legacy about to Yes. the

first And XQ kind guide you impressive, of the Rockies I and in year think first the of we very implied trajectory, our of about talked the then strong would better see I guide core, grow. And think wells half year, then about all for if decline what's better, half new think through the I first that while and the we works knowing the not was and to efficiency, also think well. XQ, only base recognize for we the team the second but our creating that the the I'd do on half capital as while how half deploying was production. are like certainly

and think test. a They've been the in more EUR in able our able to Rockies efficient a able designs, really think of they've is like industry, think, about artificial been of lift creating well. is surface migrated tankless the the And gas example kind they've the rethink great lift I of being cycle our spent of beyond to to per of some earlier, these lot but earlier lead to that helping infrastructure, I things production. most the dollar bulk

so one when production proud of from think that base another year-on-year, we're is the And that look you I teams. really

the very doubt, Rockies Permian, impressive No of well been pumps and their as very, and the the the up in actually as Texas Permian which the and gas it's Mexico. there, the applying intelligence to has lift Rockies management artificial New

kudos expectations. above So the They've things and gets exciting these for to definitely we're teams. us, have to we gone -- and are beyond

The next with Sachs. Neil Goldman comes from question Mehta

to the of capital. return start Yes. on off [Indiscernible]

back stock? preferred. the taking back level thoughts the you the Just which on to get around buying absence just aggressive commodity you be curious the out at how that, price oil on in you of or level your believe price And can can

share we to do at the probably environment. growing repurchases is not lower a would -- our could per common not almost only of we it for And are cash value share have at our really with And when means at shareholder trying share that main to share framework because we and purchase to program. much do that production to we're both. the value investors. we're create where to There's to continue what create feel we're capability part any certainly, flow $XX. share, price But a above, that's grow common we an share our capital certainly, per at in we're do repurchases with cash our Well, a limit current because trying But is of we've that's like trying that got the what thing bit. a program. grow Again, production, repurchases $XX big the we $XX, outcome and need is to

the that's is teams couple incremental is or shareholders, cost, with $X So earnings that I from and about value will developing reserves our that, today the here, this less were the like last script have do creating And to able year, about but of cases. get talking we to like we like and in for thing also we've in versus we we've talked And rate growth at volume talked incremental lower some DD&A our been earnings. volumes, development what again, our the the the creating so now. then the up the development about least funding of every [XXX%] our replace by year or buy that's where very at And right years cost flow to what XXX% are is growth is creation we're back to doing the DD&A And shares. seen those reduced important XXX%, binding feel reserves, we've and cost that production develop to growth and and undervalued and fact income the we reserves from cash the given to with especially

should So share to way the we happen of the the both get repurchases, period But next will that. into do do point we're above, whether we common, really able year $XX triggers we do time what expect, only But going triggering what's both with back will take near preferred believe buying a or that little do macro. we to to we'll to buy out get to not if it in And a plays the at to here wait going. doing probably program macro before is but the be the important and watch not is a to term, can we within preferred, some at it common the program months next that or few able have could to us.

billion part quarter program back-end that the share of did is was just $X.X year add of in across of very that we $X.X just last have of the the weighted. of third year the billion challenge I'll half our second concentrated that that repurchases We alone.

And last the prices it year, so pace at really able up commodity we were with to matched against the that difficult retire X stay the it's making to have which this shares year, consistently. that's we

in look gas So pricing, QX, last we were in realized to realized prices oil over if back over year, you $X $XX QX.

And that the that's year-over-year we're big so change seeing.

follow-up on Al Hosn getting congrats gas expansion then year. is the And on the this

East with incremental perspective flow about associated business love just the or Middle and cash we think on your thoughts online? asset the came any Just would that how should

Al exploration the capital, expect was good were an had production a coming in good incremental similar XX. setting us the The month online that just and a very is in of from looking than of have are for Bcf for for year certainly, Al production getting that less the get wells to in that fact for towards that the also day do Oman out Hosn Block We that to well record opportunities healthy that having Oman, East. -- rest able and back another in us. production Hosn Middle project good we to additional this was gotten sign the on, to a the X.XX with we project And definitely little

in year, -- past this the north So year, this on and field Safah Oman.

there, been in production set over for the operation that's field a XX records years. We've and that's

-- we where out a of through to modeling jetting, about year. reason in do up been that's or in working I can and process that on are we want base and and jet the well, and and when that with being base new get maintenance, finding from record a formation that achieve the this innovation into there's new to I process do also, go And one wells there. able you to Oxy that go and quite mention, too, existing of the with things it production wells -- as innovation brought really hard use area guys were called incremental and to there Richard of part we coming production, still production. subsurface bit Oman proprietary we're So talk

-- I a as East like happening things mentioned be script, it in is Middle we my of So operations, and over in are could to be we're countries the we'll X and a here best our those being from else. best X minimize focus countries, eliminate that and we like focused lot to of distractions on or not spread we in the in but the anything internationally, feel lot and and areas fact countries, we U.S. good on

from with Dingmann Neal Truist. comes question next The

My of the question is Mexico. on Gulf

we see wondering production GoM notable solid. classify in there today incremental look in would current Your activity change continue quarters? how Gulf? I opportunities And just was coming the at any operations quite the in and could just you to

data we that and say the when going to analytics, believe keep excellence be the Gulf intelligence, have to of I be Originally, my based to at the -- actually expertise fact production capability flat the technical Mexico believe, would is for -- advanced flow and to elsewhere. use and going the acquisition, Gulf has optimize believe I cash a past our use game invest year. changed thoughts made teams again, And those the that over bit plan of the I a believe, now, just the changer of I tools. about of have on team was to our I Mexico. our I working is artificial the do

that that growth to the become generator. year the do next in think looking for I forward more area believe could X cash us this next rather So year, X Mexico of or a than I Gulf years, of not a just but

been that has wondering, I ramping up, in I little And other forward? the guys wondering, there. changed have believe the your your recent talked the up. you have just And about you around on are, I'm I'm DJ, as completion ramping then thoughts just agree. like completion there. just on I design have on like detail secondly, -- already, now design just -- and maybe about thoughts a think you space gas this I spacing. well or what pads XX-well slide spacing months, and been maybe opportunities more have but just going

of So that? thoughts change there's to I'm just wondering if any any

all I with we've with I how starts but our reservoir spacing, Yes. to terms described, continue you I base. moving I DSU. would the the to unconventional. opportunities. of few those the many especially that. the And well positions like I really done And as across try teams performance per to a described, X about done XX on less, think the right I'll think that's It things what recipe. wells look Permian, and like Great. about from XX really less at take the the But very cost. we've to the just we This us of really in noted, Richard. thinking think the consistent And excited say deliver in to I challenge EUR subsurface in in same per section the the for wells is DJ, new pieces allows mean

use able reserves kind lever wells. additional intensity completions really to have help drill We to and without to to capture of up been the turn those frac having

up X,XXX So prior to I think our about designs. foot, which we've gone per from up is pounds XX%,

would inventory, the the is spacing unit As say drill we thing and think I about spacing is not same. every

changes, changes. geology the the development sequencing So

where be areas be there'll so that And may different.

last DJ, a just design of cautious to where horizontally the we're together. And adding wells points at just holistic But in DSUs think bit, a of reservoir. of couple And little vertically the but the highlighted and by been that, do looking Basin, performing contrast we've It's to the section. unit again. wells actually put warranted. attributes the those we I drill it's able kind unique a with success, opportunities the again real operation's are Delaware both the able to we in that per have team's of kind that those against added we sort spacing where that were of maybe

peak time production. have They to a lot done reduce to

term, So they as deploy just those longer the to surface optimization, the not And at those in from able to quicker. really mechanism to production of analytics flow. things type allow plunger These but are where these optimally be cost. actually really predict being right to Vicki use teams described, quicker that only how eliminating wells failure our teams can we operations terms so can our and that approach lift of lift then really excite constraints adding about wells gas us go

comes Michael Scialla question next from Stephens. The with

extensively and this Looks spend about a know I have been the now, productivity, to going like anticipate X% XXXX improving You with right here. level. estimates talking production well pretty current about to flat you lot softening of than the year talked about did service year consensus you're keep companies costs more next

get So on view give outlook. but early 'XX, for want it's too your that to to just know guidance I

we're the wanting the to settled to expect to costs, things people I to would kinds company of cost. still we're don't year. and -- and the any jobs. the But But trucks, next labor tight. what We're we field any us. kind reduction of of people think a in that. skills get while don't we've around truckers is being need increase are welding jobs big -- just start so challenge plateau we seeing What much on those think we're as also reduction change in that seeing seeing where drive not we're important do to -- But service I of not getting expecting though, is, and in some terms many a bit labor seeing that's seeing to It's that matter there's field, not we're

That's I focus. agree I one, mean, with pleased just I And really few. the of Vicki. our with can we're, efficiency add maybe always a our operations.

operations has fuel, us. sand continue. seeing for but years, lower the reducing efficiency obviously OCTG, is nonproductive added over of of productivity relief, just component, of kind we a highlighted time, of goals, about individual the next X.X going the really, the we've as so think similar, we've kind we're And improved from rigs some But that lags, kind and generally into year, been but some which of seeing last

seeing a those opportunity work to we've of little with in really, So have. lower. But things got continue bit types we the fleet the come we're to

steady is this the where very of pace in different We're a to at we've pretty couple years. operational last point, which been

opportunity us, down. And utilize that get and of optimization it's really so the an really for to resources we have kind

look So We at company the on but as we going continue pricing that look longer benefit really keep there's hope both next to be term, service efficiency. challenge. if operator the and year, we that's anxious to working we're can to some

And Neil. Michael, I encourage much period. time to coverage consensus not rely our always this add. to too whatever for group on just is We'll wanted

it goes, the know, sale more the there. further in be data you As out that can

time. conversations the have us, at to the continue with just we'll and So guide appropriate

know based I feels keep to to flat. based though, spend numbers that you more Got those to you. need say I on fair would guess today? that suggest guess just on summing all that up, it Is conservative what you'd production

just production I while teams barrels. more or don't lower where We're either both. wells. graphs that more would because recovery execution know our the the more same the say mean the from increasing cost. we get efficiencies of look wells are to I we're out at for of We're continuing getting getting doing also

efficiencies we'll I'm say I been take to we're have to have have again, least because for a And more I'd We'll some bit industry, we still that starting I at we've I -- do to that dollar capital think believe, at just with we to all that I barrel be at capital to think the per prepared that. look impressed into that And that spend we'd to stay on think able we the So the account. don't of look to are checked wedge the flat. being now, intensity lowest the spend a last production, but what basis our with it. in time gained,

done of in couple we that Now haven't a number months.

to again know for So sure. we to check that probably need

Stratos? any do to company your on with kind detail looking have that. cover of follow you you the capital point? with agreement spend what is Does one the The at ADNOC. on sense And for up Appreciate this to that

-- achieve cover the things, with But net us set And for we help not deck XXXX. the are doesn't Dhabi. set think, focus get big could to by but of not Ranch. it just try to what themselves And does versus is that done have air and the we've had it possibilities we I currently today, things group It other together to sequestration zero, what a cover probably goals was to put here each that another talk about worked ADNOC King we Stratos, States work ADNOC and capture out. the for the to cover first direct goal to in United that at the Abu

also processing that ultra-sour a gas what on companies the we to world. collaborated making was it, now away they're several and and didn't that. -- that the on and the is they -- from that They largest plant fact time, we even want There in at and a walked goal, largest the do try mission. were the to have attempt we the what So given building

to The track record do we Al ADNOC Hosn sulfur or that things different. a with of to working recovery are serial X. through do X have things difficult in So units are numbers

to over -- us that not to going to cost returns is going it's focused was go for be So and way a it's the this that's way this that bold each is into bold looking step us. now taking to It's ADNOC well. going a because for help other, as to in help that on a step shareholders And we're -- and doing also we're our be time. to deliver

a around how we're similar this. objectives So very we doing all have of

best continue in us chance that the the the so we're starting at work now good with will one U.S. and ensure team and start right sites the here of looking gate, out and project. gives the And UAE a the pick to that

Wells comes question next with Roger from Fargo. Read The

from your to there? on look guess guess, lines? at some like saw up those was the about about had follow expand I the can opportunity examining along EOR. any you anything wondering, own trying conventional of look I'd We others occur, ago, as I at COX I month or of to have there, operations inquiries And you Or you transaction now capture. carbon a sort a on

one carbon of too decades. I very decades it, this. Richard build least we happening things a we look probably a couple can't I and don't that much EOR not comment COX the even closely, or U.S. or that when are we -- had worldwide followed follow that at say capture can happened. for on of in which But we at But there's few any what's will on probably or

we that are: do things So we're the we talked in understanding we what subsurface. things, that call, one, this best. on that And have focus the best do things the doing now can as we've about the we structured so

COX for have is since for a EOR to now different into. COX the And XX years, different what used just doing we way, kind a put almost we're reservoir of

looking a in sequestered, it's into or of same but So whether an techniques same type the all or we elsewhere modeling, get and the EOR reservoir in and the different at whether Permian work the all same into it's a goes approach go reservoir. COX it we saline and it how in handle how the

We we returns upstream invested So our business with either of shale business part kind that don't is returns expertise. not can need or it really our feel conventional. the the are get or the own generally dollars in to that of pipeline because pipelines

our So we going to what the that do do sure to are dollars we things is capital make best. that want

the you partnered We're midstream in in that operating processing and significant again the plants. there COX -- sequestration miles We we we've referred developed. pipeline have have XX companies but We've with infrastructure. Permian. of mentioned COX do as X,XXX And do hubs to

and Permian. for of footprint the sequester a a are enough the to zones the do XX big think be in capacity sequestration straight and not can the all the There have estimated we EOR, implement multiple to a a work so for States Permian, COX sequestration. from And the think I only basis of but where Permian lot have for to we as I we in lot the years, of United is a whole, emissions large

some doing doing that want in hubs? they going because companies on lot do projects partnerships give best time, Obviously, there's Oxy. we're that from the required for be want capital sequestration these you of don't So collaborating do to. and capital the want Richard, return to to us we what over of we a comment coming of best all other

mean just minute. I yes, a -- Sure. build

continue work our I opportunities. Permian to EOR think we especially in position, even or capture Permian many carbon

that that's and emitters us capture to terms going for able of being the opportunity real we to subsurface because present economic in and that and especially the legacy think retire position in have, COX. continue We to of

the know Gulf said, that the Coast, to reiterate, we we In sequestration like be as we terms of want really position, of going of and it's best have Coast. are the we I very that our Vicki That's I around it Gulf add learned could on piece value, but focused that. in the hubs about talked subsurface before, where

come well wells of going online and X drilling We're that really these continuing the in wells year. next few end put years. moving Class are over may projects process, to be we our strat the permitted hub to the capture the every X think together and got be as We've through of have up by several prepared are to

think security So to really certainly around be the COX sequestration, kind we're history. we because the our providing positioned low-cost of of

that, companies subsurface and around that for sequestration. midstream with focused partnerships we've but in great the before, Gulf Coast they're developing So announced Permian in the and both an really important piece, we're really on

Paul comes The next question with from Cheng Scotiabank.

or decline. question. be you that I production seeing the to and years? the you pace Vicki a improvement think or has will in several the expect that limitation on the in regulatory, That's and assume we the you're activity but past from than about continue, what the with that? production team, Should the may that that slower the you concern do should for at inventory able the better for trajectory maybe next been first with I on that we the the decline mean, there DJ, think

actually turn more closely. to that looking Okay. over at that Richard. I'll Richard's been

Yes. Sure.

Obviously, cycle. kind years were levels, really continued sustaining me of underinvested Rockies back this shortest couple Let to back the significantly capital in We year. last we just walk to on the of this focusing capital to the through the teams more but of downturn, restored out where were the really you coming year we outperform.

year, better. year actually has half is shallower the And but bit growth the had the half happened of year. growth in second a a expected this so what really first is We in decline of the the

kind second at look think we're day. about growing a X,XXX first half, barrels we're where you if of half So at I to

But well competes in to capital -- on production that of capable these the So next takes asset year. running Rockies us portfolio sort really that terms that seeing we're work in to really growth. really into you're a flat our been capital a for capable decline to I going into in -- the -- of the year running from rigs, see how X. the we low-end think for this -- continue X, and improvements moderate And deployed

for Rich, can next the led able to you modest the we to that assume maybe that will that several that's growth? do years be minimum

place challenge But teams think Getting capital development, the but able team it job we a great the have in really continued do really be to fit position getting everybody, done again, midstream land Rockies in this. terms more. I to Look, permits, has allocation. upfront on -- needs the our of to

bit would call them a I the, Texas, high returns. lower cycle have at also a longer even but These lower bit prices. very than in competitive Delaware they So they say, returns decline. do gas are the

for we year. put so cash the really capability they needs have sort flow as it company We'll well. together us, of fits. needs more, And but do fit the really more that do for outcome to that as next capital we fit But can to

from comes Devin from question McDermott next Morgan The Stanley.

Stratos, the to in Texas. first plant go So back to DAC wanted I

the from some talk we're offtake well? for about just made carbon some range the that capital key I demand And at level in in some of spending wondering as you progress ventures seeing could year. for Could lower where just one higher a of facility? of there. that contracting this was you I that the You've DAC offtake talk think driving was you're factors trending on offtake signing the if within then ranges

Yes, the great. CDR sales. with I'll start

fit into and continue market customers of I product, decarbonization. pleased that we our that the aviation with think and our I strategic A&A following larger formation sales CDR which recognize strong believe of the a talk strategic, believe really really the like expectations. mean, a is we've as really to clearly kind are about, in

So like aviation -- we market. fit while we about that sustainable CDRs broadly feel well into there think fuels,

is Really, at the on better continue DAC. if $XXX a to marked in range for of to going in we though, a settle to into the fuels, market we're may those of some terms you us, down aviation we driving well. believe look innovation sustainable ton the equivalents So that key cost as talk, $X,XXX probably market and

in focused innovation in our so we Stratos, center. parts with their only going makes not And development, with on the very but also but carbon construction remain King progress pleased Permian the Ranch with engineering

want I because do important the So believe this is market just to long down term. we talk to didn't make that affordable for about cost us

other things per The how kind put CDRs you, of SAF I'll mark $XXX requiring are penalties Parliament give in terms starting ranges, just some and of fit around mix in European the of XXXX I and some together think in about thinking COX. of on ton the those price sales X% April

think compete So really We cost. how us can a another that's how we can competitive. directly about think look mark be at at when that you lower that helps offset we

the think carbon Can factors. as one and swing off give finance sheet ability to that us just on update Great. was the the then offtake plan well? this just year, balance your spending the an in lower process And you on I of

think we look, longer think long into term, carry financing and that near continue term. come financial able I with but this that us, progress. No, we going we're remain need term the strong our understand about good that optimistic been have this to to We've to we we partners to we -- ability as in partners Yes. be make

the we've And of partnership stayed about to for year. the room capital, $XXX year. by talk reflects the million end that that with the to the capital million to really, that in bring Just range $XXX

for to say, of Yes. we sort want in some and thinking more would to November. it's update continuing thing. give what CDRs now And to will Devin, your I it's an a announcement, with an are major demand of Richard bit I just that update and gave appreciate things to have just like I It's respect because interest anybody of change not. sort

little you November. in that of give a we'll So more

Yes.

I say, about I we're date. to think I progress, construction XX%, should think,

follow-up construction come together. on last market. So that And progress. more we'll some think these of year the kind have updates dive on we had We can we more how kind to of deep giving pieces just point

The from with [Operator next Gruber Instructions] comes Scott Citigroup.

Yes.

of that to into running X showcasing would investment Stratos equity DAC you another investment? thinking an you're up ADNOC In from do to with, partners Just had equity progress just terms do funding whether partner? is encouraging. that they do or capital about into making one the quite and question, it's see ADNOC The Or point. program? constructing following just the on manifest learnings sufficient and MOU DAC, up in or want But last that to talking the Stratos operating be trigger X attract costs, getting and pull lower just sense it on in DAC that the

who's Dillon track projects our building manages projects. of would know Ken know actually I our they they say major with record and ADNOC, well, major

how only probably phenomenal. -- were we by in innovative us in expand expansion Hosn, seen XX% to how we just So -- and we was spend XX% innovative but not way is under we're Al almost this they've the with built plant recent also

think ADNOC be prepared so happens sooner that with And what to I waiting on with will forward move us Stratos. than

through I go without through air the having adopted through think gone been down. a go direct large they same been we'll all of kind thing that technology our cost with technologies that's in worked way understand that never capture. There's and a

the or I add, as the ADNOC able there cost the term, we like We a term. But be down for value and like can get the with them I obviously, that down think partner thing not others we're we in. different really over the of the right want set up next part only only capital, long I is that to to strategics parties move And economics both to decade. bring Yes. right mean, would but near as definitely

and part to forms, our market I And ability development. long costs so really think, expect a capital, that we that's to as the down, open scale course, bring big of we term, of

answer And more -- that presents do I over to your think opportunities changes yes, time. so question,

final One with expertise, partnering it ADNOC, Yes. comment is, capabilities and know on we their too.

So the bring they what we to table. know

to and whichever a combination this of having we capture. that's their is aspect the the And other and experience, CCUS both knowledge the or their with so exciting of air combined ours, direct their expertise do do

with The Cowen. next question comes from David TD Deckelbaum

I'm start fact distribution going to try priority mentioned to higher to obviously, bit now, to to you free sort pace you or flow ask of in year? that it similar a think in the curve one curve perfect half of see about of change more question. And capital growth sort of how where year cash I it was expect sustaining this we a it perhaps back with before, buybacks the Does where need should redemptions. Or allocation, cash quarters? next versus curious, milestone change harder you into the coming capital it's capital? the the relative via preferred the or to that achieve does is irrespective given prosecuting is

that going oil a large gas our I in execute not upstream say growth to would and business. program we're

delivers the we to half, I on will that what is intent take year keep level be a moderate oil not we something a to similar the would and to second want best present capital what of we But do basis, just returns but year half So the whole we have is second activity gas it year -- that this be. our our activity the a is value. at project level want and next spend, that to what into say consider program

to So capital framework change that. we're it. mean a dramatically that right repurchases that take our is doesn't of going Share part now and

from say it's I the we I -- will what see And macro. what discount -- important on of that's -- wouldn't with part what now, we the do would that. the depend an our be. what But And better preferred see it's also believe, a both, realize able repurchase because do some to environment, I year price redeem than going to to ability of the some common shares do whilst being macro next to I

of a So to I environment. are pretty lot there think reasons a good pointing

part it our but always that the be discount framework. opportunity do wouldn't I do So have both, repurchases share to of I will a believe we'll yet.

I'll as thing add, prices whatever necessitate concentration XXXX, foundation is far, other far our there. creating overcome thus because share program us We're for in our don't purchases with XXXX. The that year. last or have ratable to too, in David, is oil many slugs repurchase to and spikes in get more We a

it So not buy repurchases for continue with retiring as we this even are or year the laying we're next or preferred year, share we groundwork whether along to not.

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

for say and would day. a thank have I great joining to like you us, just all

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

You may now disconnect.