10-KPeriod: FY2021

OCCIDENTAL PETROLEUM CORP /DE/ Annual Report, Year Ended Dec 31, 2021

Filed February 24, 2022For Securities:OXYOXY-WT

Summary

Occidental Petroleum Corporation's (OXY) 2021 10-K filing highlights a strong recovery and strategic execution following significant capital expenditures and debt reduction efforts. The company benefited from a substantial increase in oil and gas prices, with WTI crude averaging $67.91 per barrel in 2021, up from $39.40 in 2020. This favorable commodity price environment, combined with operational efficiencies and cost management, allowed OXY to significantly strengthen its balance sheet, reducing total borrowings by over $6.7 billion. The company also advanced its sustainability initiatives, focusing on low-carbon ventures and emissions reduction, positioning itself for a lower-carbon future while continuing to optimize its core oil and gas and chemical businesses. OXY's strategy centers on delivering shareholder value through capital discipline, debt reduction, and returning capital to shareholders. The company exceeded its 2021 production guidance and achieved record earnings in its OxyChem segment. Looking ahead, OXY plans to continue investing in high-return projects, particularly in the Permian Basin, while also prioritizing further deleveraging and capital returns. The company's commitment to sustainability is a key differentiator, with significant investments planned for low-carbon technologies and carbon capture, utilization, and storage (CCUS) projects.

Financial Highlights

48 data points
Beta

Revenue

$25.96B

89.3% Gross Margin

Net Income

$2.32B

8.9% Net Margin

EPS (Diluted)

$1.58

Total Assets

$75.04B

Cash & Equivalents

$2.80B

Free Cash Flow

$7.56B

Financial Statements
Beta
Revenue$25.96B
Cost of Revenue$2.77B
Gross Profit$23.19B
SG&A Expenses$863.00M
Net Income$2.32B
EPS (Basic)$1.62
EPS (Diluted)$1.58
Shares Outstanding (Basic)935.00M
Shares Outstanding (Diluted)958.80M

Key Highlights

  • 1Occidental Petroleum reported a significant increase in net sales to $25.96 billion in 2021, up from $17.81 billion in 2020, driven by higher commodity prices and improved chemical segment performance.
  • 2The company successfully reduced its total borrowings by over $6.7 billion in 2021, significantly strengthening its balance sheet and improving its liquidity position.
  • 3Occidental's oil and gas segment saw a substantial increase in average realized prices, with total worldwide oil prices up 77% and NGL prices up 139% in 2021 compared to 2020.
  • 4The OxyChem segment achieved its highest earnings in 30 years in 2021, benefiting from stronger realized pricing and improved demand.
  • 5Occidental is advancing its low-carbon strategy, with plans to invest approximately $300 million in low-carbon ventures in 2022, focusing on carbon capture, utilization, and storage (CCUS) and direct air capture (DAC) technologies.
  • 6The company returned capital to shareholders through dividends and share repurchases, reflecting a focus on enhancing shareholder value post-debt reduction.
  • 7Occidental exceeded its 2021 production guidance and set new operational efficiency benchmarks across its core operating areas.

Frequently Asked Questions

Occidental Petroleum showed a strong financial rebound in 2021, with net sales increasing to $25.96 billion from $17.81 billion in 2020. This growth was driven by significantly higher commodity prices, particularly for oil and natural gas, and robust performance in its chemical segment (OxyChem), which achieved its highest earnings in 30 years. The company also successfully reduced its debt by over $6.7 billion, improving its financial flexibility and liquidity.

Occidental has made significant progress in reducing its debt burden. In 2021, the company reduced total borrowings by over $6.7 billion, utilizing excess cash flow and divestiture proceeds. This deleveraging strategy has substantially lowered its near and medium-term debt maturities, providing greater operational flexibility.

Occidental's strategy focuses on delivering unique shareholder value through an integrated portfolio, operational excellence, and capital efficiency. Key priorities include reducing financial leverage, returning capital to shareholders, and advancing low-carbon technologies. The company is committed to achieving net-zero GHG emissions from its operations before 2040 and is investing in CCUS and DAC technologies through its Low Carbon Ventures (OLCV) segment, aiming to be a leader in the transition to a sustainable energy future.

Commodity prices had a substantial positive impact on Occidental's 2021 results. The average WTI crude oil price increased by 72% to $67.91 per barrel in 2021, and Brent crude prices rose by 64% to $70.78 per barrel. Natural gas prices also saw a significant increase. These higher prices directly translated into increased revenues and improved profitability across the company's oil and gas segment.