Occidental Petroleum (OXY) Q2 2023 Earnings Call Transcript

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Good afternoon, and welcome to Occidental's Second Quarter 2023 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded.

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

Neil Backhouse

Thank you, Drew. Good afternoon, everyone, and thank you for participating in Occidental's second quarter 2023 conference call. On the call with us today are Vicki Hollub, President and Chief Executive Officer; Rob Peterson, Senior Vice President and Chief Financial Officer; and Richard Jackson, President, Operations, U.S. Onshore Resources and Carbon Management.

This afternoon, we will refer to slides available on the Investors section of our website. The presentation includes a cautionary statement on Slide 2 regarding forward-looking statements that will be made on the call this afternoon. We'll also reference a few non-GAAP financial measures today. Reconciliations to the nearest corresponding GAAP measure can be found in the schedules to our earnings release and on our website.

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

Vicki Hollub

Thank you, Neil, and good afternoon, everyone. There are three things I'd like to drive home today. First, our portfolio of assets continue to set the table for record results. Second, our teams outperformed last quarter's and last year's excellent operational metrics. And I want to make sure our investors see how that flows to the bottom line. Third, our strategic and operational improvements continue to support our ability to take actions to drive even better shareholder returns.

I'll begin with the portfolio. We had the highest quality and most complementary assets that OXY has ever had. They are a unique blend of short-cycle, high-return shale assets in the Permian and the Rockies along with lower decline, solid return conventional reservoirs in the Permian, GoM and our international assets. 60% of our oil and gas production is from shale reservoirs and 40% from conventional. More than 80% of our production is in the United States. The international oil and gas assets that we operate are in only three countries, Oman, Abu Dhabi and Algeria. Our worldwide full year 2023 production mix is expected to be approximately 53% oil, 22% NGLs and 25% gas and 70% of the gas is in the United States.

Our conventional oil and gas sets, along with OxyChem provides support during low price cycles while the shale assets provide the opportunity for growth during moderate and high price cycles, and the flexibility to adjust activity levels quickly if needed. This combination of assets has generated record cash flows for Oxy over the last couple of years versus the cash flow generated by the portfolio that we previously had in a similar price environment from 2011 to 2014. The midstream business provides flow assurance and has done so with exceptional performance during catastrophes and emergencies. The low carbon ventures business will help Oxy and others decarbonized at scale in a way that provides incremental value to our shareholders. To summarize, we have a deep and diverse portfolio, providing the cash flow resilience and sustainability necessary to support our shareholder return framework throughout the commodity cycles.