The Occidental Petroleum Corporation’s (OXY) second-quarter earnings conference call slides provide detailed insights into the company’s activities and performance in the Permian Basin.
Key highlights related to the Permian are as follows:
- Permian Production and Guidance:
- Occidental’s Permian production for the second quarter of 2024 was 587 Mboed.
- The company is maintaining its full-year production guidance for the legacy Permian and the total company, despite an expected divestiture of 15 Mboed in the fourth quarter.
- The addition of CrownRock is expected to enhance Permian production, with CrownRock’s assets adding significant sub-$40 breakeven inventory and high-margin production.
- Operational Excellence:
- Occidental highlighted the efficiency of its operations in the Permian, noting the high productivity of wells in the Delaware Basin, where the 12-month cumulative production from secondary horizons is over 30% more productive than the industry average.
- The company achieved a record by drilling a 3-mile Texas Delaware well in less than 13 days, which is 24% faster than the previous record.
- CrownRock Acquisition:
- The acquisition of CrownRock, closed on August 1, 2024, is expected to be immediately accretive to free cash flow per share and to enhance the company’s Midland Basin operations.
- The combined Occidental and CrownRock Midland Basin acreage position is set to deliver high cash margin production with low decline rates and high liquids content.
- Permian Portfolio Strategy:
- Occidental is strengthening its Permian portfolio through organic well performance and high-grading of its inventory. This strategy includes maintaining a high level of operational efficiency and leveraging existing infrastructure to improve asset returns.
- The company announced an $818 million divestiture of the Barilla Draw Delaware asset, expected to close by the end of the third quarter of 2024, which includes ~15 Mboed of associated production.
These points underscore Occidental’s commitment to optimizing its Permian operations and leveraging the newly acquired CrownRock assets to enhance production and financial performance in the region.
