Occidental Petroleum (OXY) 8 Nov 232023 Q3 Earnings call transcript

Good afternoon, and welcome to the Occidental's Third 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, Anthony. thank Call. participating and Quarter Occidental's everyone, Conference XXXX afternoon, you in for Third Good

The Oil of and available we and will call us X financial made Operations, non-GAAP to presentation Gas the that in also includes slides and on Mike call a forward-looking Vice Executive and On earnings our with Management; to of be President, Avery, found nearest Officer; and few Senior please Vice cautionary Hollub, a and Carbon the Dillon, Manager Vicki. schedules Richard on measures Chief statement Essential website. President Chemistry; today. Jackson, Peterson, President, the turn afternoon, President corresponding Rob ahead. President U.S. We'll Ken release on Resources will afternoon. the GAAP XPointFive. This reference regarding section over now Slide today to Onshore Investors Executive go I'll Reconciliations the to are this call on website. President, International statements Vicki, Operations; and our can General refer Vicki our measure the be

Neil, topics you, X would discuss like and key and everyone. good to team Thank The I today. afternoon,

increasingly Matthew, family. a to thoughts We excellent our and Chief Air by prayers financial Capture, performance quarter Sunil which our once VP portfolio how is the before performance. role on our Sunil and important third Direct we managed VP begin as our update and Chemistry results important XPointFive and note and Rob guidance of will an by Essential Officer, to send today. Senior in his time. of One reviewing quarter, family attending we unfortunately assets we drove second, First, to our I'll Executive record Peterson, emergency. begin, which Financial line. And cover again teams portfolio this bottom to flowed promised over play an expect

earnings further our strongest strong the our from that assets and and this to a well framework we've fourth operations delivered return this date teams had quarter advance and performed with shareholder exceptionally for quarter. us to cash again trajectory Our established flow positioned year. This

Let's to emissions is team and products needs forever. to African it and gas making them producing valued underground that it finally, capture most to back marketing to molecules the sequester where our the returning follow the moving lives. And from as improve the molecules oil we world and

in day, increase First, let's exceptional review in our oil XX,XXX gas full third to oil the exceeded midpoint day. guidance production enabling production gas. performance us quarter year guidance per per and BOE XX,XXX results Strong of by the operational and by BOE

Mexico. In well Rockies, year. of and well subsurface Our a expertise, as record the continue higher hours, second over Permian cumulative third Gulf for full set record continuous performance This was in operating by Delaware production conditions uptime guidance combined favorable drive our our DJ in increased to strong driven the basins new inventory, high-quality as performance outperformance to this well record Production due and with time the the team's previous the the our exceptional with activity our our and of and doubling a guidance year audacious drove third well time, Delaware operations of quarter, increase. In the plans the year at XX quarter. improvements. remainder that in production performance team pumping

drive Our performance. high diligent. advancements continuing teams hyper-focused and to are are Their

gas completion we will over Additionally, forward-looking deploying an technology, reduce pump began deploying innovative during new frac believe that in with alternative Liberty the quarter Basin, which hybrid e-frac as well costs Energy. emissions. natural time a third and as this is We the DJ

cargo and cash in OxyChem, to our story. synergy due improved prices. say can't I you'll our amidst quarter, plays and sales earnings caustic large than And demand. as PVC And portfolio. largely the Our to soda Capture due midstream business to commodity finally, the guidance performed to export flow better exceeded so of expected which for Air hear, rising role enough, generation Direct much it provides a timing OxyChem

third shares program. repurchase Share XX% equity. the billion of have completed common million and During our of the our enabled $X we of now $XXX preferred repurchases quarter, dividend redemptions repurchased share and additional

the now outstanding. have over preferred We redeemed XX% of equity

are Now Capture I'd the the our Director using call, for the chemicals and or expertise of skills turn technology like recovery update our to DAC. with business topic XPointFive and to second The on experiencing business. enhanced Air an subsidiary, that our is DAC big progress we our ore leverages

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use. First, we commercial for DAC advance will

and Second, to low will pathway achieve carbon to it term. our others help neutrality the And same. long over Oxy's shareholders the will it to our and broaden resilience increase generate returns solid third,

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have very are to We BlackRock our partner. as happy

projects into potential development jointly sequestration the Our reached of agreement this deeper explore in DAC the our of an market a XPointFive with Energy dioxide now receive with UAE. and momentum a morning, gas UAE. And selected X and DAC Oman after dioxide U.S. it we Oman shortly Networks, weeks, just with the announced and in ADNOC our second Texas call, for quarter to of carbon partner that facility DAC Department transporter carbon removal Oxy over has South opportunities together, delve initiative plans. engineering for call and and the will the Hub. And a long-standing sequestration who preliminary announced magneto to first our capture natural OQ just understanding Gas the sole of progression announced And in team carbon to scale, earnings also turn hubs study the of Richard with memorandum our ADNOC the to grant DAC the study U.S. development in a utilization in I'll ultimate. the

how update welcome glad and business Capture initial facility. This are a DAC we in execution comments reiterate thankful we DAC I'm will as our market. Thank investment is the focused first our provide BlackRock with I Oxy, recent solve we today. and you, STRATOS, to world. Air is Direct strategy the essential want carbon our on for our both improve discuss to Vicki. business on determined also the partner provide the Across removal credit and dioxide for approach, Vicki's Today, resources challenges development aligned which to milestone most are to our to

highlighting key to DAC is Oxy begin for value key related of Our business an low be expansion in that several carbon our a accomplishments. strategy, markets. I differentiator will positioned by and it's of emerging

low forward-thinking transportation to a can strategy, commodities our Capture emission lower with and partnerships markets. businesses or decarbonization a valuable to carbon larger for atmospheric deliberate decade. Longer and that sector advanced targets From to many credits dioxide CDRs to product hard-to-abate we products solution can strategy hit development, businesses term, across new pathway carbon this create from Direct a or are in term, and at cost other COX been materials COX a other believe and As to innovative atmosphere removal road fuels provides lower solutions, necessary both provide working provide and was team a carbon the the heavy-duty we has to our technology especially industries. map for required Removing for advance our business cost-effective access than at sectors. Near Air recognized DAC as technology. scale technology,

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with product. early CE and recognized and power made progress innovations, for for advanced development of XPointFive to both removals technologies, worldwide for well-defined and focused the to catalyze policy led integrated gas, reached for purchasing oil momentum, cost-effective exclusive businesses low-carbon Oxy. The partnership today scenarios and formation groundbreaking durable with larger development support a Oxy's STRATOS, COX demand measures market DAC Airbus with carbon shape. more volumes work like begin and our voluntary to development was development a CDR improves a and new tomorrow. market U.S. CDRs. X emissions on like and strategic plant CCUS to Act, and process through innovation center engineering CDR XPointFive emission being global large project the and CE actions U.S. DAC. This critical was capturing Jobs early and X to at Early their team progress of measurable Infrastructure for Carbon followed partnerships new CDRs with for Meanwhile, key an support more enabled measurement allow including leaders license Investment Additionally, commercial and take

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at advance to were and carbon ability maximize rapidly need We across also we where demand. DAC generation DAC our value fully engineering builds. This support helps DAC this to sure of our growing partnerships of CDR make CE the as comes technology acquisition our excited the accelerate critical. to meet a integrating innovation into next Finally, supports is while innovations time plant they

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aviation, reduce offsetting international demand presentation ton, through we still scenarios CDR at begins when grow is point reach of the Civil our We generated through is the CDRs have enable price DAC the expected may reduced. industry to annual the scheme cost end market credits offer CDRs for to market reduction Aviation rapidly undersupplied. market an carbon us International Reducing known CORSIA. how aviation to lower significantly decade for offset earnings of in or points. In an expanding capture be where also will as airlines the this from CDR the costs cost of and for expect included X the in capture to to scenario DAC their emissions inflection remains at as illustrate Demand requiring XXXX a per Organization market to $XXX the

airlines Operational reductions. emissions improvements limited opportunities by present for

We effect. constrained expect demand CORSIA SAF as into that and come from SAF supply emissions also fuel, aviation anticipated exceed reductions other or to once is be SAF, sustainable mandates will

is zero be and we to CDRs deliver pathway partial priced emissions ability net SAF a While can decarbonization, DAC than that to remains and Already net to the reduce X. lower SAF true aviation's demand of importance meet unable the while SAF true having to scale, also a solution. solution recognize currently

their an [indiscernible] targets to market these will which and be facilities for we will The ability several cost-effective industries to will solution reduce cost. markets. compliance achieve be demand CDRs at DAC within develop DAC pace driven expect We by our essential

our to to in flexibility our optionality local the on technical can have into our high partners excluding shift likely laid to R&D If continue forecast. efforts the our refocus we've flexibility but at our grows CDR cases executing technical would year out, DAC knowledge, towards DAC develops becomes If resources the intend we per be rapidly. The goal development through on capital, or with $XXX acquisition faster. can be as high of and current positioned XXXX. while operational the CDRs most increase to CDR will we the valuable plan with we plan, capital million demand the cost Oxy and CE market DAC capital. This license. licensing Regional market medium support supply this a will focus can the costs on CDR market anticipate line third-party to and through developed a heavy with developers program capital, technology slower CDR more the down capital-light other unlock support that than integrate our development secure expected, down the for helps demand with for in partners funding, then bringing development we learnings then to A line high with technology build-out LCV up approach. Based development

DAC X and developments. to the Moving on X

invest million business. BlackRock's its through first class DAC progressing an STRATOS approximately facility that STRATOS, complete. excited in world-class by managed investment diversified well, a XX% it's fund investable announce DAC becoming We will infrastructure and Construction institutions. for our demonstrates are financial again BlackRock asset $XXX is to is

the future identified to at Engineering opportunities on the debt. Center several costs Innovation Additionally, promising Carbon lower already ongoing has work

also X into demonstrate DAC ready implemented improvements be the process To these expect scale the capacity STRATOS ensures XXXX, into schedule ideas technical mid the may builds. commercially and improvements, costs. trains. implementing operational to the at optimizing of development construction are but our ensuring previously future remains are be STRATOS earlier plan and some latest planned. This future process these can on be while we We face than several to optimize to we accommodate in advancements This help for for schedule XXXX

has commenced Our and engineering is South progress. DAC stratigraphic Hub in well Texas front-end design testing

final and work through and and appreciative of grant yet selection details. doing the grant to DOE we We Energy of amount Department forward that from additional are process. Though look announcement timing are the the very a the recent meaningful U.S. agreement of the our are of not the for known, we

We shareholders returns to and DAC for a principles advance will development partners. within have us that our and to value enable continued framework delivering of customers our investment to work while

reductions cost for investment focused to DAC demand additional We of decision market increase X. future accelerating capture, to final CDRs which drive are on factors in in a expected the DAC, attract turn, These partners. including of pace is and development will development

to advance long-term Direct all, these with product companies Air like it low-carbon broader we who that BlackRock, OQ partnerships Capture continue ADNOC will networks We our ecosystem. Across for also and and collaboration Oman's vision share appreciate business solution call products our essential lower our we are over focused that and enabling turn Rob now financial to the the carbon can for discussion. world. this Oxy, are of will for on this for delivery I supply gas

you, $X.XX of of earnings reported driven losses difference per offset sales $X.XX primarily derivative adjusted premium profit and profit by diluted in reported adjusted The noncore the of paid Thank was gains between partially Richard. We posted and share per preferred a assets, on share. an diluted by redemptions. equity affluent on

in partially we cash received modest driven negative In working free by quarter, $X.X the the concluded a us settlement $XXX enabled During unrestricted million earnings last during the to cash. We operational working of remediation over prices. capital the environmental change mentioned in third in quarter execution $XXX with flow an million third commodity billion in call. and period, strong over of the capital, increase cash we before experienced generate October, we

operating weather favorable billion, maintenance a company-wide of oil decrease fourth the expenses common fourth moving through exceeding a and quarter. our was of the the $X.X of of in production of from high slight Gulf to shares, cut. Oxy's spending into assets $XXX in our third the at coupled shareholder during third guidance start in Capital outperformance, guidance, contributed the the of the with of portion planned quarter. representing Mexico repurchase a quarter, resulting quarter further including $XX.XX quarter. We third of the settled per where quarter quarter domestic for Mexico, third advanced Gulf end of BOE million, million approximately As midpoint each highlighted, the return the better-than-expected $XXX of framework higher-than-expected exceeded Vicki second the domestic including which production

deferred equity over during equity third we of and Additionally, have quarter. deferred million redeemed now with $XXX redemptions the redeemed XX% triggered

rolling falling below the distributions trigger. X, XX-month year, concentration the shareholder equity unlikely in above totaled November preferred distributions repurchases primarily to share of per that due cumulative $X XXXX. is will common $X of common $X.XX, of again be the reduction second this share trigger It As the shareholders to half

largely the committed per share accretion repurchase cash that a we at However, is share by and intend derived shares program, flow commodity pace remain from we continue our driven and to repurchasing prices. to benefits earnings

Vicki guidance mentioned, As year production outperformance through full are in we the the raising our quarter. third

the the of the typical ethylene quarter, per the a to a seasonality October. in hailstorms guidance costs per domestic caused guiding are operating Mexico Ingleside plant. power in planned expected for production that ever quarterly BOE. Fourth decade. in the over outage total the damage early X.XXX million quarter turnaround day highest This these are result crakcer year in maintenance first Property of our of and interruptions Delaware [indiscernible] was Basin approximately reflects the of fourth quarter fourth DCM in first and our to Permian storms complex and $XX.XX Ingleside despite impact We BOE well Gulf in turnaround at plant for as OxyChem as

and that bottomed. are soda see indications prices early beginning to have We PVC may caustic

as the full have the early rising macroeconomic including of until business global next of interest from uncertainty remain, impacts the not fundamentals year challenges clarity may cycle demand upcoming and However, rates. on growth

across our during of increases the in approximately proportion performance rebound domestic tax third Our we effective as in to a fourth income a adjusted resulted domestic expect international the during period. XX% the quarter, businesses lower-than-anticipated corporate rate quarter which of

to Moving capital. on

higher other we was capital Permian areas, sought certain program in planned elevated a projects end spending activity In the production. as to year Third in are higher full we and of spending quarter OBO than guidance by of developed to originally working as capital our optimization. fourth range. Company-wide interest operated balance and date planned to or mix at spending result quarter spending the likely result

we which our to assets. Our activity following approval. look international call we XXXX our expected on all from expect XXXX to are revisit for calls next onshore would forward in teams finalizing We announcing like to Today, in anticipate our levels material regarding capital I Board previous to several plan, capital business, plan. In no spending domestic average add change our XXXX. Upstream the similar points

expansion Gulf of Battleground run to X of work as of part investment year in drillships expect plant Mexico the the program. OxyChem we mid-cycle next Additionally, commenced our on this year. modernization

we advances, battleground of $XXX guidance. third through Oxy. continue construction quarter represented XXXX a strong in operational Incremental anticipate and to quarter starting million to compared expect for XXXX the an spending As XXXX spending the capital incremental of in summarize, XXXX. To financial

we are the on on framework. operational we As are focus shareholder this delivering of year, for and conclusion excellence XXXX term a with continued preparing our near

are where determined the report cash again, when expect prioritizing now our were call the trigger by repurchase forward Oxy. I call we flow. The Vicki. of over debt to progress pace the the date turn our macro and intend that another to may timing in exceed the will to look We in with driven repurchases XXXX, largely we of preferred to use program, of on year of instant next share which quarter's framework retiring equity we back our for completing the by be strong I to share environment. in addition will X continue to the matures of pleased

Rob. you, Thank

expect tremendous there. explained additional premier exists of role portfolio important in diverse a our potential to assets. believe play earlier, and Richard more As DAC we We

Oil who major -- the of -- mentioned Joining session, be manages group. Ken the as of us major and President projects also our Gas today operations VP Senior business Q&A of had but International projects Dillon, our will the Neil for part earlier, is and

And Avery, of projects He can questions DAC. business mentioned respect answer construction will the of DAC how with surrounding Mike was the run we'll of Manager the XPointFive, running he to of the aspects we're and earlier. General some So XPointFive. President, as the about other and answer questions

turn So the call over that, to with moderator I'll the now questions. for

first Nitin come Mizuho. from will Kumar question [Operator with Our Instructions]

want start, to with on deep to consolidation. topic recently, the has with highlighted. obviously, know a Vicki, a there you of been M&A. the I and your I deals focus industry that out some there's inventory bench Oxy But

So just wanted to get your thoughts on how you forward. see Oxy fitting into that trend going

Nitin, acreage consolidators that they Well, we do our that for it in and want gain us understand Anadarko the reiterate the us, area made were the I we and possible to to And with in those were to subsurface industry saw there. an synergies. we that obvious early to And synergies acquisition. were was because did in significant those

is or see be our we of happening of need do now while we that do and we've a more to don't But we and considerably forecast. of than that more acquisitions. no had synergies than it. aware that, strengthened today. achieve are production anything with And our the Now $X we what's good to where Therefore, keeps part up done to is the doubled group have in BD feel with -- acquisition. We've industry, billion we our it's have we that thing

technology technical productivity. you around recovery been you about Vicki, strong talk performance talked want I last Permian know the back. That's well work as your improving but some very and in really the as in helpful. on focus to There's much else. do LCV basin, rates the anybody quarter, go focusing improving on I is today,

deploying any in if to are step change lead that deployed seeing So just could factors? technology have you curious if being you or recovery a

feel I already configuration subsurface we the and And to we've only but as improvements not subsurface wellbore can design been if that been factors. we've standpoint. those the think step from like understanding around really a most the perspective better dramatic the have jobs from also of go and most far design, back our being get but recovery 'XX, back of an XXXX our seen improvements better for as and that out and in modeling a had have change frac I the operating look also you so able

access We artificial the and most doing wells And hole operating continue subsurface using that we we team have with to to the from best other pressures of a to on advantage that lift bottom we things efficiencies. is on be lowering that AI an with our by making get to and artificial the lot that of an intelligence, the perspective. operations and can out the then surface respect sure we're take ensure

of chomp enabled others to what to proprietary. would bit but to others doing, and in the the we're Richard that's we're able Now, we've like at feel some be work really to follow And some doing. I technical disclosed that and about a to all talk you I consider be amount considerable past the

be in to I'd be of to some we recover perspective, now. And things out to Oman. honest, rather mentioned technology proprietary more that what right? of just from is at And ourselves have the going really definition probably say But just I'll just couple you're we're doing with recovery, So a internationally keep do to of also want wells to leave you careful stuff that. Richard for to minutes. it have a the our

in Yes, wells performance The what improving recovery slides to our Vicki wanted in thing as is stay our We're doing. We great some is appendix, a we that the year-on-year keep it's And the of not to at obviously, look advancements which few the [indiscernible]. core proud right. on Rockies. over the shows had factor to, I'll were in alluded our we it for we're well. I on only just highlight that's point. talking really the And not and earlier, days. X-year in as Permian, Middle Ken East it's

success. The wanted to other was thing I our appraisal say

quarter record and what as technical Wolfcamp new The well. the forward. we important is benches that to this do believe we ability these B on core through go engineer go the to came highlight So is well those things for

we that drilled of And that appraisal year, drill this replenished so planned wells really this the appraisal year. already we've proud The wells for success.

doing in at So it adding inventory. low of and very breakeven terms they're

those team So they're just to X making. add recognition to our I wanted and to the give progress things

have I off them to there thought second to but going I was good. cut he for did a

I but wouldn't, great you job, just that And guys. hoping was Ricky,

come Neil Sachs. will question next from Goldman Mehta with Our

about update your gating about building on LCV. start? It's you it Vicki, are the plant DAC that really mitigate wanted items talk how towards get helpful biggest mid-XXXX those feel how to around and do offer What risks? to ability up is that the I you take And Yes. to to to construction completion?

Okay. Ken We'll to pass that then.

So say well. is far, going very construction I'd

procurement While engineering, extremely QX. [indiscernible] -- at performing of move of we've by at site moving the around where the phase to we site is people basically through trades we're the and X,XXX up well about into and XXX project different construction the got we'll are people in phase end

had We're that far, of the of no material we So paying construction procurement. needs the terms XX% on meeting labor need. value around issues committed in of the we've field and at we've moment,

in locked prices So at moment. the are

going are well. things very So

the we're that that we I we're and construction the digital carrying bit we out We're saved going a we a engineering engineering designed think that such and Worley's system quite also, so AI today. capabilities in based can on twin replicate are building of forward. that using money

supportive basically like are difference chain, who supply talked We have that's I'd huge On the companies about with and aligned for that early visionary working vendors. truly us. made on. to who a CEOs We're highlight

doing for for to one helped the for one very know man-hours. equipment. any over you has As X.X really our been years, one equipment know, could of visited way can gain electrical this we on They've specification, assembly many our down been to in Industries thing do one the performance us the what to supportive save I'd don't exceptional, last million have attention there's vendors pressure reliability like of experience detailed to huge couple U.S. to also the of Siemens in we I vendor Energies project. to that. Safety on one packages so. highlight is specifications. I how and that reduce awful bespoke money. change example, committed lot are through to, the instrumentation standard equipment out. really very Technip but they now all going forward And visionary give the we means lines, we've The We're don't it if received right been suggestions and an CEO. from and And their cost extra you

things overall, So on-site expected and terms that are well as the of required don't out are dates, have going any. with really as we in materials

piping takes that labor of dactyere generate site. well with work we That's piping this air on future that broadly get We We working definitely generally sites. pilot have can fabrication, you the did to point worked racks. well. site. built We'll at So the can very fabricators, a together as contactor do reduce at materials built into and you you or where materials, build a without decks mode all of, you the doing frames vendors,

a doing of So vendors. from getting help overall, well and project lot

is been that more I'd helpful the very just interviewed on for was those vendors. went selected us and what through that like various to like saying the we vendors as we visionary. visionary felt were build What's about Ken

And the global to climate show today. be no that change. There's thousands mentioned, the using more also and out And the you from facilities atmosphere, work and going about important XX% getting around credits. would very model to X.X fluids, SAF, Capture Air can that look much because X something to sustainable X means this that model that reduction just both of of making comes there's getting at world. to that's gigatons the you going realize look and into to like these at, and X at at climate atmosphere anything emission-free COX which were gigatons, with Direct to really the for it's you with aviation when or transport to what's the not earlier. It's must was atmosphere visionary a decarbonize transition respect in We transportation from companies without credible committed stroam gigatons look and into XX what built dealing and matter too Richard hard also that it's globe benefits the do transportation do more is atmosphere, XX that's because cap or carbon of unless that's if warming what no you is that you COX our degrees completely today, them and what found these they

for design that distinguish a aid battery for a degree and and as COX industrial Capture a emission. some necessary to technology of replacement battery into to or wind ultimately, that's by is generation said, world. And the can this important, one wind us some That's makes goes totally it. fully not But if important that solar. type Power generation. the be build it's Air So a Direct of the or I can and power solar between to atmosphere we be sort COX different and from can for if -- addressed

Neil, just question? move your with So now to that, second

billion Vicki. call, about follow-up can it considerations. just like last any CapEx. was 'XX And I and 'XX That around good And of starting great. looks from say the recognize, be is range thoughts capital point? but annualized on on to fourth crazy that's quarter, 'XX won't you a great, to talk you quarter $X.X it just it the get that a Is I the would

it oil Rob in gas, next that same wouldn't script, the to what it's our level in back the and activity and go say be his is No, especially that. that upstream year. had have I'll U.S. that to crazy year will said this

X XXXX, of we'll drillships to for for in we'll incremental the have in run $XXX those addition Gulf million Mexico. In that, and Battleground

of that total the year. So you that first of that, in all to part as work to go gets that. next I we'll hopefully, more on or And guidance above think have you

Paul come will question with Scotiabank. from Cheng Next

construction plan higher model? maybe rate seen on this growth for the Have meaningful first the questions -- That's interest the also, in is impact business and inflation you And any side? Richard. rate question. does your Two the

Sure. help the things, -- -- back prior if -- and goes we going as maybe and say few broadly to start gas. a we a this the more inflation well. is to But need with that. We oil I'd I'm can I to question go assuming I'm little bit

things of and the X And X. and a our X to optimizing if contractors, last XQ X is of allowed with As crews better us for seeing and the rigs optimize that's down success and really rigs, trajectory this and over with to the frac quarters, we right that then seeing bit in right per specifically resources and quite Rockies rigs Delaware. our the the day another end both doing our some couple foot early the of hit returns that you'll kind a we've sort we're been year, follow down really of

like I'd our I quarter, we think the into areas fourth improvement, next things also to project not bit are rigs, oil hit year. are we can efficiency. that our as focus these ready kind little on But some leading goods, play fuel the of of say, been we really across But which we're optimization things softening, country a anything forward. seeing of sand, hope tubular on to has

and So -- question. stop sure that maybe make I'll answer you we there

it business And an question, that say is with is very ventures bind is can also not is be Yes. And the of model? actually the it of up inflation rate look right that the well that have carbon can the low financial on may signed business high low at we that people institute what term referring as that that to you we and like fixed in hitting that is look kind also to inflation what also that lot and seeing my that how on want ask pricing second may and but we oil also on and deals fixed which share different is and you direction. And impact now? the of are just price expand you price, to the some gas, carbon does a offtake moving even kind CDR, that

to you can talk the -- Great. Mike I the to as do on a start want this, market then offtake. maybe I we'll what with to DAC and it relates bit seeing way I'm about we're little and going think certainly, have inflation

of that's I important part think an our message.

would see cost cost the And from but the and it's XX-XX it in a Yes, did I general now probably of just in pricing. we was the industry we because of Ken. point prices, mainly of also result CEIC. as learnings basically terms the estimate, inflation, back general It's related increases impact steel et project in cetera. We're locked the not of inflation of materials, we where say increased on so incorporating inflation, to specifically STRATOS at DAC industry moderate

us to handling electrical solid filtration designed recovery for also. systems, good efficiency heat pretty included upgrades feel and DAC give the long we So improved and optimizations the were upgrades systems term, upgrades,

I -- things definitely only of DAC. and number inflation, not a to specific so say, not not of would

Paul, this is Mike Avery here.

progress the for So and that STRATOS. process on I'll an made update give sales we've

of this to beginning building here portfolios. so of buyers are we're And is realize that lot to a with what going Capture getting of within strong in attribute is fit Direct their of the momentum Air market a how growing sort market importance to pipeline the now. We the

that's also other recognition sitting a think affordable when to scale. It's out placed is the ready future. the people think in next Air growing And of is that Capture I Direct at there. more a actually alternatives technology that there's not to commercial out go than some now

the markets I towards integrity higher think maturing. moving the have been market these solutions has also carbon been as

Airbus, range sales. agreements. ANA, Astros And with Amazon, They fixed so the announced a and from to year deals Bank, range Houston Texans. They X price we've XX terms the There's NextGen, to on CDR are date, of TD the years.

stage we've that the that's And capacity XXXX. term price capacity that so deals if sold the a we there's we mature with and to at have and out out growing negotiations to net earlier volume about to And together date, also net XX% pipeline strong XXXX. got STRATOS up sold look that to about XX% is behind XX% takes negotiations us that then to to where announced couple agreed, of we

with Leggate of Our next America. will Bank Doug question from come

X? wonder into up follow-up, signaled I I forward. in going you Richard interest about But for interest? first efficiency strategy misquote now, could where strategy? And or license you working do I I if I've you'd the that it you've Vicki, which our said partner fit some And think don't got in DAC please. DAC plan Clearly, given the where working How ask want -- a before. I think you to the see here, STRATOS, business but does revenue capital see you think the your do of I

in benefit continuing we're from the sale to our on Ultimately, strategy. part our a have well our -- to and very technology with that a strategy it go-forward of only Not of provide lot Well, technology of basis. are going this sequestration we confidence reservoirs carbon a customers. and also reduction of while credits lot we we a for sailing fits and this as confidence

want aviation convert fluids. to customers to sustainable provide COX to as also to product We a

of and emission-free want revenue the necessary air then we've it, part aviation to that going thing enhanced we world we to one truest the potential it our -- deliver it reservoirs products fluids, So that's through that's of that basis Sustainable the the investments on net our and that form need. extract made. stream. And said, oil the fuels thing that to potentially we and of aviation do that providing with maritime that COX develop, a support oil Richard doing is used can of then because as other another by recovery revenue the it we're needs in the a have is out developing

or than that's The more can critically that So is the use you you people understand it's generate produced reservoir COX that's That's into to ultimately or for COX of negative COX created jet important transition not exist will incremental oil. that is only happens today. it because that is to on important. But out does it climate zero about really to cost net curve on whole or fuels. The What getting that then converted impact to going the also the net that oil that equal. emission way emission or perspective can when because lower inject thing is change that the chain be the and zero limit net a oil is use. more of important supply that's oil reservoirs is itself a basis a so that the generates thing maritime you're by fuel

upstream that's is using lower the you're which associated existing part part that reduces the of and of infrastructure, the are with cost. a using other that -- emissions infrastructure, also the existing So that supply chain. Then

will world use ultimately the -- X that's cap So cost afford this emission to degrees. is level cannot way world Otherwise, the needs at what the intensity solve highest lowest need at fuel warming and the the it's climate lowest to world or global the that to transition. the X.X

much very So this needed. is

from at we So into be we of our when options, you will that bringing the all those look all can come -- business will those revenue streams of options.

as for going thousands from potentially all business. are fact criticized be get benefit could built. But then sometimes down And it's again, to well. not be them into and license of having only to is get been And to of start this to to making to by world sustainable. we plans that we So that. build hundreds the beginning critically but that to UN And sustainable, we But better if can the not road the then has others now. we no instead it, it's And partners the the in this technology further once world we're building move of the the of get the to needed without we we XXX faster these out comfortable solution. these they've laid us for get as where not others building are other -- point, could expecting we we're a that to important it's that commercial, right build the and then a afford the point would cannot --

much kind the and a business do think forward, faster could And to make going pace happen model our happen shareholders. build We're have ourselves. we value just best create of partnerships the it just this for to it what to the significant we to at make move best solution we so that's will than

revenue. thinking point. at? as these guess, Oxy That's doesn't obviously Am the really my growth potential so -- forward. stream ambitious right require Yes. I I capital, capital to the Vicki, was is proven plans clarify, going I license technology once like just has a that in getting a outsourcing revenue a it's was that very It to be what

also world. the oil There's because for and continue oil incredibly in our we We continue would to grow important investments or our oil to gas because oil We'll carbon is our oil business of all negative Yes. and We're absolutely an carbon gas will do to important neutral time ultimately. capability and and be have capital. the be no the That's over can't provide to that us. way gas it. going

world barrel to in reservoir of from the the an from And atmosphere. produced recovery come COX last me so should the enhanced oil using that's oil

will we that. doing be So

of will talked can And right, this these would out. back concepts, their be partners would Doug, those in you're facilities of a construction licensing manage own world But as And around we go. come lot be having drive we that regional licensing the to and what that fees. us about we've

Truist Our with next question Securities. will come from Neal Dingmann

question first My plan, Permian your on is specifically.

Just wondering, there? maybe will more you the broader plans in or discuss just all completion turn future to co-development your Dell

[indiscernible]?

Yes. couple think. I'd answer a that ways, I of

of really would terms really together but this we that's our us, intensity. we've in to say I the have those it's one frac the about think way increased we developments. year, to mind. how intensity, generalize of pretty in important those in think been I'll DSUs precise to and -- highlight our with put completion some tried we been again back secondary We've I benches is

back was us Permian increasing some into that that of the of flow some this the And put for we that capital year. delivered cash

portion that good of a completion increase intensity. capital due say I'd increased our was to So

playing the last kind programs we portfolio. looked changed But I I development that to ability Midland we They'll success, some I of appraisal due we we've our the as in to about year. say, way the think activity improvements of really secondary X-year benches, going would into type we're Basin the seen about our ultimately think in methodical optimize in of bigger we forward, to even X- next year, of to the surprises, several be the there this become years, half the in benches. we've part as over our continue these positive develop next So think it to with secondary those seen a plan

purpose really the to we do, think DSU do subsurface. want is what We So on across multiple for our to be continue that we'll area. which to want and to for fit we for outstanding, geology make the is really I benches focused through recovery

then And on second also Permian. the

largest The morning. if know impact? continued just any disposal and too just was wondering, you this in changed discuss that you early to earthquake the I'm could the is all if I'm second recent direct Perm process probably had years? reported has wonder in

I'm sorry, Neal, question. that I get part didn't -- first of that the

earthquake. the was the... Hit hit -- looks This the morning, largest announced there like it second it

Earthquake.

And the early past. I'm process know impact just discuss for you there, could -- asking things I'm maybe in just disposal if I had changed but not and too wondering you -- the wondering some

quickly. If you could maybe that hit just

Yes.

big a what leverage is work a of should general, to that in plans do. part we've Our continue really of hazards. use water I'd of the any believe water We just recycling, independent around just offset the peers. for we in trip we done we say, of responsible recently of that Basin. And actually to continues that with here Oxy large only partner facility our Permian, actually had to there to the together recycling Midland but the put helpful not revisit some got our be the

we So have. future. we projects that think the is nice It's of Delaware. really use water important Responsible technology link as other a very we're expanding industrial that think a into carbon about capture is you for actually that the

identified. about the of trying of recycle some and some front in in asking of again, -- water of operations. hazards what you're more in aware we're just that So in areas our But out been of that's all to get general

Portillo will Our next from Matt TPH. question come with

I Mexico. Gulf out wanted the on of to start

year. you'll be running there X mentioned You next drillships

just the half progressing I potential, you and a give of Vicki, of asset you commented quarter second opportunities the XXXX? last growth you're idea bit Just could on if think, curious out for key of the an of in projects expand decade. the in possible the maybe little And depth tie-in

from about things perspective excited development, the we're has also some really to new the doing we're about just Yes. we but that development have a and we're you and what capital good doing Ken share not I just what that. really reiterate, with would with

back the facilities the If wells manifolds to capacity. off includes I development of with with tied and to initiatives, complete we question, of our proximity subsea first X as part part drill your existing start plan to available

XX%, in test our on We partnering. around of of the shots of opportunities also a approach X through have on to interest Eastern promising [indiscernible] aligns do exploration probably that working goal more sort

portfolio the If lenses. and I worldwide can to ESPs. and we gone subsea primary basically context horizontals call, on Vicki's X with lift, is with last some optimization maybe which give is Oxy's as a base aspect comments artificial production and recovery, drilling, stimulation; including is see one One company water secondary and including pumping of flooding second strengths through

as and analogs the significant of of we've been in for that some see announcement done production And Lucius. and new Gulf have portfolio majors these water adding to a reservoirs, like with low easily from Mexico significant decline reserves could back approach that the a [indiscernible] successful in success direct to saw including base. And forward, recent going that On of partner long-term terms very tied on built came past new quickly a exploration, the flooding in the assets, the you an that base, part little be that's of reservoirs looks upside now and has our already nearby. we of in been

So option. we we stool and between of tremendous legs on see this see capital of as these the a X going forward the secondary moving upside way recovery

I to our back remarks. Vicki the concludes for session. Hollub that conference over to would closing turn like And question-and-answer any

for call day. questions joining much Have great and your our it. for a all you today. Very Thank appreciate

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

now may disconnect. You