Occidental Petroleum (OXY) 8 Aug 242024 Q2 Earnings call transcript

Good afternoon, and welcome to Occidental's Second Quarter 2024 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded.

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

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

Senior Chief On and International Vicki Operations, Ken Chief Mathew, Dillon, Hollub, call U.S. Gas President President the with Carbon President and Operations. Executive us Onshore Resources Senior Officer; Management; Jackson, Vice Officer; Oil Richard Financial today and are Vice President, and and Sunil President, and

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

the Vicki. I over will call now turn to

segments. quarter highlighting Thank execution across you, today begin Jordan, business by I'll and afternoon, exceptional of everyone. another good our

performance quarter. Our strong the teams operational delivered during second

midstream as an December. our guidance well afternoon, and guidance, cover technical strengthened as our also results Our I'll across to full meeting our we Basin. in were results increase earnings. paired then week, Midland asset announce high-quality CrownRock the the operational to is review the businesses. Last our deliver debt clear a in further continued the year reduction Sunil with targets to of strategic have will sight performance portfolio of portfolio divestiture we line This financial CrownRock's value through We addition and announced deal second assets set out operational integration including that program progressing, pleased our and when excellence for we last our we and plans. quarter our

segments company total quarter, second highest the in of guidance, production business for we midpoint free driven Permian well onshore. $X.X by with years uptime in exceeds the X This performance new both our exceptional production and flow and execution Gulf the U.S. This across delivered of working production quarterly company was Mexico. capital. outperformance higher notably generating total In before in cash billion Oxy's strong with along

We're new half efficiencies execute our our program. lower ahead seen gains to operational we of nonproductive of onshore our lower continuing year, us utilization, market savings. for all wells savings planned compared frac time, This in first production optimization exceeding costs wells been free putting are our approximately and and operational decrease last cost as year-to-date, achieved basins our capital achieve improvement efficiency well cost, time our increase to These focused to increased XX% program unconventional well flow. expectations the we've part of to facilities have as through cash across and

the We in half market in time anticipate further acceleration of the year. second to

economics industry-leading deliver development secondary to on look continue we many long-term into supporting Importantly, inventory bench performance across to costs year and translate replenishment. we efficiency of we XXXX. development, improvements and The capital momentum the as end the toward should and generating are facets

down driven relative and quarters. over decreased addition X operating performance cash domestic a to our of leadership, lease across assets In a per $X.XX second continued our the X% barrel, enhance capital the prior expenses have In teams operating lease improved well efficiency quarter, to expenses the average improvement BOE our our margins. to

us second have of outlook half should initiatives year, favorable several toward year-end. optimization We the a give the more which planned for

artificial also we optimizing utilize finding our our EOR For maintenance example, lift, reservoirs. We're more led to in COX associated our to reduced efficiently downhole rates has which Permian in failure are and business, ways costs.

recent I'm to of remains the recycled Water Midland of in milestone a a priority facility. and Ranch cumulative our treatment by we barrels doubling relative costs in disposal water million to our volume water which stewardship in decreased South key a Curtis highlight XX last operations, we've Basin, Delaware half the recycled first In the year. pleased

now In barrels New recycled million addition, we over in since XXX have our XXXX. Mexico operations

Overall, move the to XXXX. us production BOE of for despite momentum maintain half we we our of full into solid divestiture and This in the our company gives oil and as second excluding gas day have expected segment quarter. year the total per Permian guidance, assets CrownRock confidence built XX,XXX fourth

in more Our pretax higher than outperformed with midstream significantly second adjusted midpoint. income than the $XXX quarter business million an the guidance

teams success pricing quarter marketing regional of intelligence gas first transportation dislocations. the domestic benefit their their followed market Our on extensive from by utilizing to up and capability

Permian high planned stable levels the on quarter and unplanned takeaway maintenance in year, earlier healthy the as second Furthermore, and output continued from abnormally storage presented pipelines.

the on capitalized diversity and asset highlighting our opportunity, teams provides. this value the base Our

to As after for Matterhorn ahead service, coming expected look anticipate second of opportunities half we in we fewer the the the placed year, is the was which pipeline optimization months. in

However, act arise. our prepared teams bottlenecks be will if to additional

We're by we advancements businesses. excited at are now low Looking the carbon our making.

growing. direct air facility forward, Low Carbon that our to team dioxide carbon STRATOS, first credits of capture removal construction As is Ventures for moves demonstrate continues our demand

with organizations of to recognition In of X net-zero STRATOS. as a The from over of largest the for an direct purchase years of is achieve engineering single agreement agreement sale capture CDR goals. help carbon date credits to July, Microsoft the their CDR increasing technology we announced and air the credits solution tons XXX,XXX highlights metric

We like CrownRock be with and CrownRock's to now acquisition on talk integrate the X, continue operations about portfolio. Oxy would August efficient into how pleased and talent. we impressed we to closed to greater the employee I are

addition teams portfolio inventory. enhances and the subsurface low excited breakeven about subsurface have are assets and our undeveloped our we Permian with acquisition of and maximum and workflows these geologic value. potential complements As technical apply generate We're to discussed previously, production their and the to of high-margin eager this expertise premier

We're to scale Midland also looking newfound our forward the Basin. in leveraging

scale years, the efficiencies how other technical has driven and Over operational seen we've basins. significant our in advancements

bringing Basin Midland sharing, integrate together organizations. assets, practices our our as efficiencies best we'll of We from each by we unlock utilization are through infrastructure and meaningful confident that resource

teams On we're organization. how telling combined the our CrownRock each several our and days forward about made call, to in advancing. strides other know the enhanced is integration and Our into you post-CrownRock getting portfolio next great Oxy's have past integrating more to looking

One opportunity existing was XX program to this high-grade of acquisition In divestiture the acquisition's benefits of within of the for the we billion $X.X Oxy's many completed plans our assets. portfolio $X months of out billion December, to close. be laid to

announced our program welcome onshore the is Given progressing at week, the monetize of depth to attractive we of these an we the opportunity as some portfolio, price. last divestiture And well. assets inventory

our more the announced Permian which term. the this of debt robust speaks we're both or address in Sunil to The -- means Basin $X cash steady will debt approximately $X us underpinned to but these track year, go our by in coupled billion on debt reduce sales progress of Since the a near organic towards third proceeds the This well have of on excited flow closed potential. will start we're with future our the billion cash operational divestitures, positioned our reduction. and detail, focus that quarter, divestitures. which during excellence on of from flow to retire we has approximately assets quality directly

second strategic financial more to over to progress results, the Sunil our Now, I'll action. call about details on provide financial quarter our hand and guidance

you, Vicki. Thank

of have December. closing high-grading we flow the in We made of low executing potential the in upon announcement CrownRock outlined with breakeven week. has immediate onshore realized generation recent we portfolio plan the our of are portfolio progress inventory cash and Oxy U.S. expansion with excited an free last

with fit strategic immediately used opportunity of we notes. deleveraging transaction net The pleased Overall, build coupon given years of newly the offering a Oxy, compete average placed We to assets term offering. CrownRock the X.X%, In of the X, we the of X X, Midland in scale XX maturing ] the manageable a proceeds acquired for capital. demand late and long made than July, for senior debt bond consideration our the a cash X, notes We Basin and acquisition. fund XX loans creating rate at and the profile for plans. at to maturity $X billion the investor weighted were less unsecured tranches this issued in [ will highly

our strengthen in debt we of strong In retired free organic achieving reduction. July, $XXX flow success progress and further we and top cash priority, early remain million to enabling are coming is sheet efforts Our weeks. deleveraging a our the debt balance at maturity, in

August, $X.X is $X.X billion the in of the between repaid $X CrownRock's divestiture from bringing Oxy end the debt debt, proceeds Draw over the repaid Add which $X.X reduction almost redemption total of commitment near-term billion. expect of By this billion. notes additional the of early we by to third our have to and and billion will the the XX% we of to end an of Barilla additional quarter, have maturities

We prudently and advance from our will continue to program. proceeds flow via cash deleveraging divestiture free

We Delaware announce of certain were acres pleased around the in Barilla approximately Basin The the divestiture last week agreement XX,XXX field basin. to core Draw the to assets this approximately for net million. $XXX Delaware centers of sell Texas

Oxy's position a anticipate third production. our long plans. reduction in the have outdated quarter is remaining estimate day current assets BOE these While in inventory development the over Southern fourth been quarter closing core in sale We late Delaware the to per for XX,XXX decade, a and Permian

positions earlier throughout from divestments the net be debt disposal year, allocated we Permian, proceeds the Consistent approximately year-to-date transaction, in announced this This $XXX cash priorities, our will completed acreage to million. to involving flow from several total. Separate also $XXX sales brings from undeveloped or closed announced total reduction. these with million smaller all additional ships

progress trajectory divestiture and reduction We of are program plans. the satisfied debt with of the our

balance our quarter, an excess continue and are billion divestitures on to debt near-term flow $X.XX share our will both of and $X.X billion We on until second sheet cash the unrestricted of the with schedule per we of quarter focus we we target or commitments, of through ahead and second profit generated exited reach reported diluted reduction In a $XX cash. principal strengthening less. debt and our of combination adjusted

capital, business flow high sustained volumes. of driving quarter by and of More segments. highlighted marked generated strong specifically, was our As Mexico, Vicki before we oil earlier, the by the driven Gulf across $X.X success diversified performance free Permian over second in billion cash production working

million as adjusted guidance. greater In $XXX substantial was segment, pretax when income through the the compared in evident marketing the capture of than midpoint Midstream outperformance gas to realized, value particularly

second with to benefit delighted base through asset a financial results continue pricing operational are us environments. success for how positions and complementary that of a drove in excellence We the range from quarter wide

quarter line business negative due capital working capital second change and plan first the of at largely contributing lag of which consistent Rockies-related gas primarily quarter, water domestic Our oil the XXXX front also on reported and a the and a in prices property incorporates tax in based end. natural half a X-year payments, gas factor. quarter, volumes and a a barrel higher with oil played oil was AV with We revenue and increased quarter shipments on our are activity. from period to higher second

Now looking ahead of half second the XXXX. to

in pro X, Permian XQ divestment provided guidance of We production the based included associated the excluded forma we we as per late in guidance BOE following assumptions. the expect close to upon third from have the the day beginning and guidance quarter. We August CrownRock XX,XXX transaction our with

approximately from CrownRock, this due day. disposition, our the X.XX for production CrownRock, higher total is to Permian million company to and and excluding Including full production, increased of adjusting after flat outlook. expected million remain Oxy's to BOE Permian midpoint per guidance year Even X.XX has total

second an our the domestic after assets. Building in in improving even we the generated Mexico on disruptive year production our back momentum This incorporating of guidance. tropical and some the quarters, operational includes trajectory of in first downtime in potential for half the Gulf all the anticipate weather

production of years. new X CrownRock, represent record guidance quarterly the in Excluding highest the XQ midpoint would production our for over a

the we changes key of have full summarized year appendix, CrownRock the associated into some our with consolidating guidance In portfolio.

we benefits, these barrels. production domestic high-margin a notable from costs the from anticipate operating adding Aside improvement in

Vicki assets, onshore Oxy's Excluding trajectory costs are improvement of highlighted and CrownRock, by pleased efficiency operating earlier. capital across our favorable and as with U.S. also we

in plan the with out XXXX with performing OxyChem's start the results laid the year. business largely at of line is well. we

rate reductions However, China, interest OxyChem's conditions for the challenging dampened the of economic combined in with year. have trajectory deferral continued

to billion $X.X As of a guidance range revising billion. down result, year OxyChem's we $X are to full a

strong continue by standards. another be historical to year XXXX that for We will OxyChem anticipate

by is guidance midstream anticipate have marketing With online, second quarter $XXX additional year strong we and come full quarter, reducing a as muted third We expected gas marketing to opportunities. million. raised gas takeaway Permian optimization more capacity

XXXX program our execute scheduled. We to continued as capital

the capital in investment maintaining $X reshape to decrease increase legacy the program profile half company net tapered capital Oxy X-rig we year as the While activity, total of second billion. billion $X.X domestic as will to the full a will result range CrownRock's

how announced the is dividend through Oxy and return foundation A along we delivering accretion free with Earlier priorities. raise segments followed that by quarterly improvements In portfolio the laid closing, common from the CrownRock cash to commitment discuss shareholder I we confidence of and December. we on we is with in want our to this XX%. flow made the financial the CrownRock our acquisition raised and the growing from out our non-oil dividend. of gas sustainable The anticipate provided we milestones us dividend a expected on over our when year,

Moody's agencies, weeks, investment-grade from recent Maintaining rating ratings our Fitch. rating including is all we affirmations received our investment-grade credit from ratings key X and credit priority. In a

on return at track remain $X.X of are next deleveraging well and We strategy, billion before to focused on least debt our we August.

to off program. promising start our with are a divestiture We

delivering We we these accelerate have asset increase reduction, and The high-quality generation and our quarters is for sheet. thereby taken evaluate opportunities strengthening over divestment actions further to converging methodically key Oxy flow on balance our recent to to will capability commitments. ultimately, those benefit financial will continue cash portfolio, are debt financial value. proceeds portfolio strategic our shareholder apply and

turn back to now the will I Vicki. call over

Thank you, Sunil.

to catalysts. to focusing the a would on by close few move I we Before Q&A, Oxy's like differentiated of value on

while and achieve simultaneously well efficiency operational to continuously allow basin-leading Our us savings. and performance subsurface expertise, driving excellence technical strength

coming addition of is off century-long phase wait the opportunities. value further deliver newly in the lower history, opportunities improved and and asset. new The and OXY's portfolio recovery given with of our it to growth development with depth cash Oxy's another what quality this enhances believe upside I strongest through cost kicks CrownRock can't resource combined the I see of that flow teams future

our to solutions flow together Beyond decarbonization that to oil midstream businesses ahead. in cash LCV solidifying and years shareholders These the finally, and to continue continues for important market. OxyChem position to decades practical benefit durability expect gas, we in Oxy's material common are this provide to businesses financially And leadership our emerging develop come.

the open call questions. We will now for

Richard Ken on Jordan today mentioned, the call for the are with As Jackson and us Dillon session. Q&A

from comes Neil The Goldman [Operator Mehta Instructions] with first question Sachs.

announcement to start. couple I And what's deleveraging. kind a but the on of opportunity look sale Recognized of days the here progress set progress good team, on and Vicki the That's asset ago, where can about want market monetization? to to Draw Barilla make here continue like? you talk

Yes.

be that but deep As and interest appreciate this quality acquisition very maximize it our scale, feel with in you those our get detail inventory actually strong. fire the sale, said previously what did have and very, incoming details, the assets ability know, and And enabled we portfolio is a assets, talking I of us your bring us about our And a we value this value. the to compromise in -- that provides like opportunity not we certainly forward would would inventory the clear We've is divestitures. has but a of what CrownRock lot this is improve that's we it's acquisition. to of which something now offers, to --

for XX the to said, our to we it assure we can be value just years, high in did core targets. able part our reduction a that we we way to that you of knew not It's bring that confidence debt that shareholders. assets sold way Sunil the the was or, needed makes we're assets, a so the in just And it. it that achieve as talking that we our But to it's terms of best do going our about to inventory I have other stronger, possible forward

we $XX mentioned, definitely, where or billion this achieve a of the And excited as off end certainly, to about XXXX that doable targeting are good start, the of you first saw by headed and and you previously we've and as said. that we're to think XXXX, is we're we're with

off just follow-up acquisition, XX. CrownRock on then building a just Slide the And

thoughts, this give XXX,XXX production more being day you that going you not thoughts guide early you're had on and I profile. know the softer and done a a your recognizing next about about potential synergies a quarter your -- than to Just us but year, a barrel asset the haven't these that, little recognize is full full on and it's hands talked assets.

the So the synergies that. just associated perspective production your profile and on with

rules talk, SEC mind to regs, plans. dive in their or bearing the the to into to our and with teams that not together opportunity the have get but Now and details had

start a the where about what just to the And situation And CrownRock. with had now excited so for week incredibly -- team is at again, the now we've the looking assets. we're,

differentiated I But we team, couple over some think found were expecting that you have versus past happened have additional details Richard's what what quarters. the of

and Thanks, work Yes, are, was new first able today. that with of thought Vicki sort they just to pieces. them be, very team the like some our where a in I'll last would we said, week answer at spend with Vicki, thing couple of and I And is this great. and opportunity. excited in time to after we're and try the that's question start with really say I'll to very about to the excited they close everything guess,

go how And think the speak are, we're first go and we have and some end I we into we'll as and I part, as about updates, more year. the ahead in think, then thinking kind remarks, to that So of where of generally. prepared our then I'll said of I'll synergies the address we the

had insight with a have that started plan lot they plan constructed. the to rules a this again, CrownRock start didn't XXXX of we really where We that. So that

of that only as and guidance, our upsides latest of The term, in kind talk And are. we see. we're saw, where about things. lots But that spent we X-year program, to we the we time but of to a longer positives. in couple a So team, understanding still not XXX think able

to and of singular some downtime just weather had was other One, more early year like events I'd us, than events ongoing. it downtime some some part in the call that. due operational that a

well the majority is really then And mix.

and less I this a and beyond optimize even development on focused their returns some a plans that to tighter little just think really zones were trying shallower year, they spaced that to due horizontal length. bit

And we in our versus constructed the reasons had plan. so what had they different program originally there today are

we'll in again, XXX as see that of It we're anticipated. we -- away. But certainly I it say roll same hasn't getting the deconstructing to of So gone forward. this the process more that. in as we terms upside delayed would we was

A couple only where to say costs well, by of again, they as are but their good encouraged but note. and as opportunities. see things cost, well Oxy I'd improvement not to this applied today, what

into And think, how at and the like diving compare I I And looking notes of stack on pay, we then well think well develop of the that. ability remain even from things so the the to now be we'll opportunities spacing sequencing forward, a going see perspective, opportunity. some performance we

so next will through we're the for be year big year. and a And this of part working of what that rest

scale just efficiency. then and And

utilization. really, a see that rig think opportunities rolls So as can we about improvements. quickly And frac into time-to-market and we core

And see still utilization you of those are resources we market. so to to as time up, able drive

management management. But synergies synergies. mentioned, capabilities. and proud we Vicki that's going then more a team the really very deliver very been I operational when scale as has as think We've as with water what together, cost CrownRock combine strong sort water position to well And our the frankly, put with of of

team. it excited sum the upside. opportunity, up, to to be all same Same again, So with

providing we we rolling and start today, of where we're as to forward from it we're into Just go more looking end the year. the details forward

Jiang next Barclays. question The with comes from Betty

I mute. Sorry, was on

that the about with want on project. that. bit. And want the quarter. get agreement to And today, there. is Maybe project the yes, of And STRATOS this the I congratulations I timing Sorry to that on about percentage start-up where carbon update gears Microsoft goal from sell that. I Really, an credits switch wanted maybe ahead to you time? ask signing what want start of any a to on on

and kind generally, business. the CDR Ken and a in dialogue Right. to rolls date, the to for continue of CDR No, a with I'd detail but question. project I'll remarks, be in counterparty of just more a the the the STRATOS the few future We're can progress, know diligent business that of give the about see the certainly market excited the We flip they Microsoft block progress to after with us. largest can sale Obviously, the you great very on way what mean it say that sales not meant to thanks they're only that. into think what constructive product ultimately that to really, and deliver. it's great product lot and kind

of pleased with So beyond just very that aspect the that monetary outcome.

progress I'd year say roll see the our think next other to future, to carbon STRATOS I highlight, thing think into team. the great I'd R&D we as of again, about and engineering and continue out like then

line And down, the so being to We're release air, which core elements things and of process, is that we in then do about COX see you seeing ultimately either sorbent how it. some cost the that get of we liquid direct and innovative to our we can do into efficiently that sorbent, able think capture process to as use we're sight trying development. sequester, very what as

closely our of of say, criteria set any catalysts certain. so of to too, in -- specific point, We for to we're that that those terms we'll forward, FID but I sales. intentionally. the remain the market. what is sort DAC a target major optimistic parameters will that on outlook And going it be for hadn't component CDR very your paying monitor of to continue to We are would

how project think we about period from be time And next we'll that, closer commercial here, disclosure of over we as that a to the to so think I get able that to FID. of more give

it turn over to that, I'll Ken. with maybe So

We do around We'll people of X,XXX or for job. Worley peak. is Overall, we have our trades we each to of We've an staff soon. summer. excellent necessary. been start at trades as continues which them track where start off site, all to efficiency expected next above at The of be. able is on to the currently rolling And remain

that, piping, the We're cetera, mean in able, into large putting by one. now moving et completing away systems I from bulk one the by fill,

So we're at testing so that We power that the the commission we we live the right up of start now month, then can stage getting can control in room sequence. this means get which and throughout. all and instrumentation running

So going the well moment. at really

highlighted, looking CEIC, from Also, are as Richard these for incorporate constantly And quickly and improvements at really we're down seeing learnings during how improvements. cost as to possible. learning also construction the potential as we and performance great

Companies their cost achieve driven equipment, Energies also for the on top to down of that's the like are focused company. how and from Technip

So our we're future. visionary support great have from getting vendors bought long-term who DAC into

that hope question. your I So answers

follow-up on does. Maybe Rockies. upstream, a Yes, back the to shifting it

third activity guidance very trajectory strong get in the the after of several color -- would on about forward. activity growth. quarter half, down think do quarters production also, But the performance, second again, you how expected you think going some to slow is as sequential is Just that and love to seeing

of years. the really has Yes, couple that a been outperformance last of no, Rockies The appreciate over part question. significant our

So a going of there. couple on things

the to Powder the think, well I DJ continue River and do in basin.

where in been those well operation. seeing mature even improvement of are So sequential I DJ, of terms the more slide, performance the we as highlighted, we've in each in think,

Powder really very of been but against industry, very expectations. has which part have work against in very, with pleased again, only basin, early the the good, an internal so standpoint, And note, that. From activity River in we our this performance not year the also well we the done where

And our we're plans. planning year be really we'll so what pause activity and there second is half development lower of do while to rework we in the the

build to highlights at be have the And with infrastructure laid and you how secondary to now that then the be together Mowry of slide, Turner similar of put position we're and really compete even and expecting development that take a as and kind year in we and with term the benches go out we're about what so to out into do so our this is longer to we our looking able primary we think end at XXXX. what as capital plan in generally

So and forward activity the DJ again, rigs that, I would then but it I in think, a couple with for with really case basin XXXX. putting of River pleased call Powder just a competitive very steady in

The question with next Paul from Scotiabank. comes Cheng

think maybe one is the I first Sunil. for

CrownRock then I have the guys them think interest divided -- XX% have for you you on discussed with fell in purchase to Ecopetrol said for the and that apart.

So from point what that? that standpoint, is on the sticky

And the better CrownRock purchased why better least must is you the average think reason perhaps more asset importantly, at of than the you or be your portfolio.

understanding you're trying for of to to will the So why deal. trying when behind the initially Ecopetrol So asset get some you're logic sell down? that to be one of that the first talking

the that CapEx and on next some number. the know a can is is XXXX for production us question maybe you idea for give it I Second and for but both moving early CapEx plus minuses and bit year part, production, the little that

Dunn in for of CrownRock in lot first of portfolio possibilities had. you you expansion. developing really it. of can as And tell know, of that Paul, we've Tier the mostly question. you you, there's had, we take absolutely asset, Tim the good of great for inventory great inventory. putting seen. there came together assets thank and X that continued And did job they a a did our the in believe the question -- the one asset I'll as I it job the Tim And is a is a -- CrownRock best combined

to was CrownRock. to that Basin. would I something, occasions certain So actually the they the the an informed area part to XXX% of the anything buy way that that Ecopetrol of within JV, If XXX% agreement XX% had as of and purchased we preference had had the a right right they worked is agreement within that purchase that versa. to on our that within within what And Midland to wanted purchased buy purchase CrownRock. have area Ecopetrol with given we we numerous were vice purchase a But they JV Rodeo of we XX% a had of

it to they So to it. assets. of wanted They be at it. part we all, They saw were They also assets. but wanted they be part a wanted of know the high-quality a

So would in that us. a with to valued have partner them interest they so been with beneficial of be we decades, -- we to a fair both and to and a are we've since XX% felt them, for negotiated great working we us, would relationship like partnerships

world we worked thought to gas, the but from March made of he's dealt done, with those and much Ecopetrol the we deal. Petro the and anti-U.S. to And all X he that on out pretty week, anti-fracking, of last And it. anti-oil approve And it that that's of just He's news according very to deal strikes, didn't clear President and Colombia were reports. we

help wanted who Petro. some United we in States are all, part -- to believe they renewable in be of that that should go go the an the gas there are oil we the that forward and all to and with away believe climate will actually, others it world certainly, like But be like a industry Unfortunately, and Petro, transition. that's wanted energy needed it. And shouldn't anymore there and

to that, many is reality going and be decades to know, oil gas is needed the for But come. as you

CrownRock our enhanced our was Basin, had in of it we're the respect part to the the strategy and in to interest going of And COX putting in taking get more the other with And assets including the we COX Midland important very is out in recovery. store strategy. have what Midland oil to ] be the world And in of to that our so [ strategy out in and Basin Ecopetrol that ground. some atmosphere the

they And so were and to excited very, wanted that it. a part of very be about

comes next with Wolfe Research. question The Doug from Leggate

on This is Leggate. John Doug Abbott for

joint out did JV? would reason, just in be sticking associated venture, of Just curiosity, continue how production Ecopetrol the you interested with potentially some much with for they Midland want not in that And that if is asset? to

of ending continued be that we the for ending divided -- XX% is would potential work on would XX% the JV, that way for of the if the Ecopetrol, Oxy. just beyond interest the So

didn't the JV we being, broke of the at each like forward answer scenarios, situation we a XX% us; XX% just all it's if them. just in a would couple have just result normal that So where operating question? discontinuation JV, off, a of just your would it go Did with one

would Yes. may as in and interested with associated production I currently. that you much just if be sort just be to sort curious was joint asset curious of venture how of that

around I barrels believe day. XX,XXX that's a

It's Yes, that's right. Yes. around XX,XXX.

second question, the the rate helpful. And very what quickly, then very at CrownRock? run That's was spending for

Was it XXX?

rigs. mean, I very X gave It's very [ their we XX think midpoint been Yes. and steady with I ], it's been steady. the guidance around X

So think be able flat, which profile we to a and They've that, well. as of very success. I at turns been into looked part that's their production great

-- very think steady. very So you can about it

to the XX,XXX, Yes, production, net clarify that's Midland wanted I the just on our production.

John next with comes Royall question JPMorgan. The from

impact date, To about the $X is asset can worth sell from on anything on flow sold billion the cash We us there. production you offer of give these the assets? agreed was if you've on but there Draw, cash question you to program. Is So expect just know or Barilla side, sale from can wondering anything lost there's assets. you I my first that flow the

really still divestitures would of on can't made what evaluation set under We're haven't the We decisions yet be. next that. because of we

that just Okay. was Yes, I to the but you've referring announced, already okay. billion $X

how a talk you licensees can is Maybe in kind on follow-up for STRATOS. STRATOS advanced operational? future the you partners of with do with how understand potential my developing discussions ramp DACs? discussions being you concept there just and/or or Just you Are sort So past DAC trying of it's out expect expect program. post program serious you proof to looking that of evolve the Or have about would once those STRATOS. to

to I'll answer kind that, Maybe Yes. yes both. of

We're our with wells. sequestration I pursuing the permitting in prove that. capability. thing Gulf think going the storage We're that Ranch hubs subsurface X wells hub, for class continue sequestration we've Coast, we stratigraphic all of done one is really our to King across the through develop

And direct and continues go so front-end that point to able that well. to our accommodate work source. together we've really air both to And put of sort capture be

talked And the really what with past, for we've targeted it lot plant. in is it, beyond about Permian. the of Ranch King we've the as subsurface of has the both next the development about kind really we of that advantages and a think scale balance

emission-free So key inputs, power you about think or advantages. power inputs, other water

And as subsurface Texas sort DAC. and of for so the that engineering relates work, continue South we to to it do

turns important the which then roll is we line cost talked and Ken STRATOS year in I it and and this think of show we to into both of carbon think innovation how it's sight the center the as about and see STRATOS also improvements really earlier continue great in. the on about But yes, and that operations we R&D your to engineering construction part next to do down, question, first as

going important as to do next ramping already continued of FID year. up incorporate Texas begin addition we that sales really earlier. South the we're learnings a capacity next this online, CDR So we that's to We that year, plant milestone from in that some thing mentioned feel these into able process I getting like to think factor a into into that

the year exciting development, the say, about million-ton that's to hub. part thing XX Ranch King really per a And that last

get you tremendous terms to of of down. that R&D really scale cost add the so economies in a we And think improvements these

development really sort into of on the And back part how a so ramp-up. early that you out big that's to next if plan that of That's we play decade. go the presentations see our

hopefully, there, of that some the So let and answered question. intent me of stop your

The next with Roger Wells question comes Fargo. Read from

in retiring paid at returns. then even catch-up the question made the buying like debt back the go were of kind presentation and potentially to Comments get back after cash calls down get I'd on on come guess, I shares, the the yesterday, the to Yes. preferred.

the Or and to back dividend you steady for And you're to again? yourself Meaning, sheet the you once the way to with curious I'm sense of would get what balance do it just looking at make then in preferred all does back it. buying share the want leave is of want want to acquisitions? more repos, you kind terms be flexibility do where raise the the how little that a

depends on than accretive this better acquisition the with me really what shares. to value doing we're delivers It today because is macro buying actually back

the is so did deal we a why But price and lower did. our repurchases that's -- we our especially share still part proposition given given much of where we is be. value should believe So it the than fact that share

get share we a we period we we our then are If back do. And we as in then $XX a back we So down, $X to what buying billion, preferred. part debt to resume start the it on will per share, also and through repurchases. depends at shares this down really macro get we buy then can be point. would that where scenario enough would trigger back of That the the

what to We then, would -- because we the ever situation at rather than launch starting the if in preferred rule definitely XXXX, by were to X% out haven't back prolonged becomes campaign a would a so high-price us if although preferred. we can't Berkshire in it that a buy that that we premium XX% point environment, I think the the be at available bought

The right. XX-year of kind change. Yes,

just quarter? follow-up, the trading. trying the start-up terms downside then to as expectation to I'm the and end that you expectations? And your that upside, gas that's Is like have midstream business of the in just an Okay. is the your understand quarter, guidance into built maybe the of What on on guidance. Matterhorn unrelated of middle

quarter happen the probably update had. would that late is we've mid- last That to

Neal comes with Truist next from The Securities. question Dingmann

My question, Mexico. Vicki, is Gulf on first just the of

as all just with do the opportunities, the the next you given give of you more how there you start-ups then year? think exploration anticipate some might there remainder a starting and be opportunities of bit I a on could you've the all color through have, at look side active tiebacks Specifically, you got lot even I'm opportunities -- these I exploration year? -- maybe

as won't subsurface analytics want it the the Mexico. to in the that be Gulf launched complex and we the because even as fact understand give believe very in is our will of we've teams using evaluation it's that help exploration, aggressive prospects do past within deepwater of happening The tools what an AI. what's And of we further been data the the

But the Gulf we thing can that is describe. Mexico Ken can other do numerous exciting things that of in the have we

Thanks, Vicki.

primary, are base, overall, all exploration think the I teams including really fronts, performing waterflood and the on well the designs.

OBN which fields of result others. a as May. well, on of for a at we're that potential moved On brought seeing data, further seismic early more in data, came XX,XXX in the than our example, base, OBN of further northwest on and From recent a we one the area day analysis barrel

we're tiebacks. are in Tiberius tie Tiberius. and to back exploration, FID after X discuss Ocotillo discoveries Marlin, sanction. These X.X recent at In and to more like process X currently going projects mile involved to moment, GoM, can the in are Ocotillo through can Both mile Lucius. our to we

wheelhouse all as strengths. execution major be add year. completed in a These low-cost operationally, turnarounds We're year. our projects. substantial project our the these for And of have in designs. our We're one the we've capable potential company waterflood continuing next of safely waterflood We'll reserves to commencing is our where

that overall lean positive earlier. into we GoM very So highlighted pilots in as Vicki the AI

seeing services. any be you the given on -- just you just update. a of wondering, wondered downturn, recent OFS bit different or versus volatility a onshore any offshore? OFS I'm seen just prices softness, prices recent downturn Great And maybe little second Have are might then in trending and sort how -- oil?

of operations, our but engaged been do really utilization we have Let upfront, me capital teams wanted year kind how cost improving we improvement Ken this And facilities. the highlight up service well how some see efficiency that I also then or can make the just overall we with certainly and and sustained because find an the contractors better program. to engaging mainly create start to provide drive to mention, in just detail. do slide, wanted in

that So value-add tremendous we we that think the in highlighted. is highlighted into roll the which XX% a addition year-to-date OpEx as Vicki cost, you to on improvements well XXXX

let turn to But over to me -- there. say me it stop you want thank I teams, Ken. just to let and the

completion last year, say, continuing. north and our a drilling end Between, we chain perspective, deflation XX% this U.S., Yes. we through supply Richard, see the summer in rolling of basket. see and from Same as onshore of

also deflation, terms significantly in that of benefits all the other than also We see higher OCTG functions. which

efficiency the mass equipment that in teams releases that us in to planning comes Basin. utilization. maximize by contractors improve use the We margins aspects of so of space working and enable see that they that spaces on matters, Having because to And the so in the efficiency with technologies They're doing, auto are continued also. not frac. CrownRock with they're only their contractors we're e-fleets, Richard's Midland and can more focus the really but pushing it it's not utilization, the value those technology will

Hope accretive. question. definitely that it's So answers

with The Cowen. next David comes Deckelbaum TD question from

a I more was bit curious little next if I on the year. progression could ask into just CrownRock

still growing standing getting by all target and it think from I towards XXX,XXX day there. perhaps you then that are a

associated think side that as that of that, savings were feeding in So selling think the spending some 'XX in on you you Barilla Draw? And program? CapEx on money about of next part some CapEx see that CrownRock about year, when transaction, with we for is capital there guess do I some was we assets sort areas high-graded given this a the from

for I together that activity with quite It's keep our them. level next be do able we actually think CrownRock teams activity that level working capability with year. we'll into going less. we while. would same maybe with worked this, had earlier, for the And well as of same said They've would the more say Richard a to this

And think news going good a that's so be we to story.

in So likely in increase no CrownRock. activity

Draw development had Draw. capital is taking capital Barilla areas the divested away was from Barilla in we of reason weren't on part that the Draw, Barilla we investing because there other we in In that because going the

doesn't always for XX that's divest it years, competed have that compete if to under has for get asset different we're would to then not X and/or philosophy to it. why an have been, our so but circumstances, of capital And we we going

last then first at some characterize air I enthusiasm, interest this their wait-and-see as point around conversations know with capture, there color STRATOS. sort STRATOS projects air and was parties second of I year Would of maybe question, perform? just around And a appreciate most following direct mode in especially my how on most in you capture. ADNOC some direct there. and being these the your just of

I about about a all the -- world of think and conference every lot STRATOS. talking there's interest say around And STRATOS. it's are the now I around companies would world in

our In there's it. operator and fact, we -- international because a major had a lot come site of operator visited had an interest in

we But as did believe that be to it's going Richard, realize it we as add? get And it people that Richard said, because it up and we better, all, first we of to today. running. have much more And want to as something up, valuable make prove you what than

No, think development. I talk I mean terms of just scale think there's that's we a right. I continue of in think that ambitious to lot We our plans.

You've plans. seen development our some of

confident it, very prove that an that strategic we sight able line as to and we investable give down, capital both will be development to help us. we're are cost going have so to And of partners as

and that capital strategy, I lot offtake we're from engagement doing of both is mean So on a fronts, our multiple partnership. future but

So I appreciate that question.

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

thank to a for your like your just of rest great have say I'd day. you all questions and

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

You disconnect. may now