Occidental (NYSE: OXY) reported a net income of $718 million for Q1 2024, with earnings per diluted share of $0.75 and adjusted earnings of $0.63 per share. The company achieved operating cash flow of $2.0 billion and a free cash flow of $720 million after capital expenditures of $1.8 billion.
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Oxy USA Wells Drilled Since 2023
Total production was 1,172 thousand barrels of oil equivalent per day, aligning with guidance despite challenges in the Gulf of Mexico. OxyChem exceeded expectations with a pre-tax income of $260 million, benefiting from higher demand and lower costs. The company’s strong performance was underpinned by operational excellence across all segments, with significant cash flow and profitability.
Gulf of Mexico Challenges
Occidental managed to achieve its production targets near the midpoint of their guidance despite facing an “extended third-party outage in the eastern Gulf of Mexico.” This suggests there was a disruption caused by external factors not directly under Occidental’s control, which impacted their operations in that region. Despite this challenge, the company was able to maintain overall production levels close to their planned targets.
United States
The report provides detailed information about Occidental’s production in the United States across various regions:
- Total U.S. Production: Occidental’s total average production in the U.S. for the first quarter of 2024 was 943 thousand barrels of oil equivalent per day (Mboed).
- Permian Basin: The Permian region, a significant focus for Occidental, recorded average daily production volumes of 567 Mboed.
- Rockies & Other Domestic Areas: These areas exceeded production guidance, with average daily volumes at 286 Mboed.
- Gulf of Mexico: Despite challenges like the extended third-party outage, the average daily production in the Gulf of Mexico was 90 Mboed during the quarter.
These figures underscore Occidental’s substantial operational footprint in the United States, particularly in the Permian Basin and other key domestic areas, contributing significantly to their overall production volume.
International
The report provides details on Occidental’s international production as well, highlighting the contributions from different regions:
- Total International Production: For the first quarter of 2024, the total international production was 229 thousand barrels of oil equivalent per day (Mboed).
- Regional Breakdown:
- Algeria & Other International: Production in these areas amounted to 31 Mboed.
- Al Hosn: This region had a production of 92 Mboed.
- Dolphin: Production here was reported as 36 Mboed.
- Oman: The production in Oman was slightly higher, at 70 Mboed.
These figures indicate a diverse international presence, with significant contributions from areas like Al Hosn and Oman, complementing their extensive operations in the United States.
Midstteam
The report outlines the performance of Occidental’s Midstream and Marketing segment for the first quarter of 2024 as follows:
- Pre-Tax Results: The Midstream and Marketing segment reported a pre-tax loss of $33 million.
- Adjusted Results: After excluding items affecting comparability, the adjusted results for this segment showed a loss of $64 million. However, these results still exceeded the guidance by approximately $100 million, indicating better-than-expected operational efficiency or cost management.
- Income from Equity Method Investments: WES equity method investment income, excluding items affecting comparability, amounted to $161 million for the quarter.
- Operational Highlights: The increase in the Midstream and Marketing results from the previous quarter was primarily driven by higher crude margins due to the timing impact of crude sales in the marketing business. This improvement was partially offset by higher equity method investment losses and increased expenses due to activities in the low-carbon ventures businesses.
These details reflect a complex performance where underlying operational improvements and strategic management in marketing and equity investments have mitigated broader financial losses in the segment.
OxyChem
The report provides specific details about the performance of OxyChem, Occidental’s chemical manufacturing division, for the first quarter of 2024:
- Pre-Tax Income: OxyChem earned a pre-tax income of $254 million for the quarter.
- Adjusted Pre-Tax Income: After excluding items affecting comparability, the adjusted pre-tax income for OxyChem was $260 million, which exceeded the guidance by $10 million.
- Performance Drivers: The increase in income compared to the previous quarter was primarily due to improved demand for polyvinyl chloride and vinyl chloride monomer. Additionally, lower ethylene costs contributed to the positive performance, although this was partially offset by lower realized prices across many of the product lines.
These details highlight OxyChem’s strong performance during the quarter, driven by favorable market conditions for key chemical products and effective cost management.
Conclusion
The report concludes with a positive outlook, emphasizing Occidental’s operational excellence and strategic execution across all business segments. Vicki Hollub, President and CEO, is quoted highlighting the fundamental importance of operational excellence to Occidental’s success. She notes that the teams delivered high performance throughout the quarter, and the company is well-positioned for continued free cash flow growth. This conclusion reflects confidence in the ongoing operational capabilities and the strategic direction of the company, projecting continued strength and profitability in future periods.
