10-KPeriod: FY2022

OCCIDENTAL PETROLEUM CORP /DE/ Annual Report, Year Ended Dec 31, 2022

Filed February 27, 2023For Securities:OXYOXY-WT

Summary

Occidental Petroleum Corporation (OXY) reported strong financial performance in its 2022 10-K filing, driven by significantly higher commodity prices for oil and natural gas compared to the previous year. The company successfully reduced its debt principal by over $10.5 billion, enhancing its financial position and setting the stage for potential credit rating upgrades. Occidental's core oil and gas segment saw increased earnings, supported by operational efficiencies and capital discipline, particularly in the Permian Basin. The chemical segment (OxyChem) also delivered record earnings. Looking ahead, Occidental is focused on returning capital to shareholders through dividends and share repurchases, further reducing leverage, and investing in its existing asset base as well as its emerging low-carbon ventures, including carbon management and CCUS projects. The company's strategy emphasizes operational excellence, capital efficiency, and a commitment to sustainability, evidenced by achieving zero routine flaring in its U.S. operations and reducing methane emissions. Occidental is actively developing large-scale carbon capture technologies, such as its Permian DAC facility, positioning itself for a lower-carbon future. Despite inflationary pressures impacting operating expenses, Occidental demonstrated robust cash flow generation, allowing it to meet its debt reduction goals and advance its shareholder return framework. The company's strong operational and financial results underscore its strategic focus on maximizing shareholder value while navigating the energy transition.

Financial Highlights

49 data points
Beta

Revenue

$36.23B

91.0% Gross Margin

Net Income

$13.30B

36.7% Net Margin

EPS (Diluted)

$12.40

Total Assets

$72.61B

Cash & Equivalents

$984.00M

Free Cash Flow

$12.31B

Financial Statements
Beta
Revenue$36.23B
Cost of Revenue$3.27B
Gross Profit$32.96B
SG&A Expenses$945.00M
Net Income$13.30B
EPS (Basic)$13.41
EPS (Diluted)$12.40
Shares Outstanding (Basic)926.20M
Shares Outstanding (Diluted)1.00B

Key Highlights

  • 1Occidental reported significantly higher earnings in 2022, driven by increased oil and gas prices and strong performance from its chemical segment.
  • 2The company successfully reduced its debt principal by over $10.5 billion, improving its financial leverage and positioning for potential credit rating upgrades.
  • 3Occidental is committed to returning capital to shareholders through dividends and share repurchases, authorizing a new $3.0 billion repurchase program in February 2023.
  • 4The company is a leader in low-carbon ventures, beginning construction on the world's largest Direct Air Capture (DAC) facility and investing in Carbon Capture, Utilization, and Storage (CCUS) projects.
  • 5Occidental achieved zero routine flaring of gas in its U.S. oil and gas operations, eight years ahead of the World Bank's 2030 target.
  • 6The company's oil and gas segment saw increased production and operational efficiency, particularly in the Permian Basin, supported by enhanced oil recovery (EOR) techniques.
  • 7Despite inflationary pressures, Occidental maintained capital discipline, investing in high-return assets and advancing its net-zero emission goals.

Frequently Asked Questions

In 2022, Occidental achieved significant financial success, primarily driven by a substantial increase in commodity prices for oil and natural gas. This led to higher earnings across its business segments, particularly in oil and gas and chemicals, which reported record earnings. The company also made considerable progress in deleveraging its balance sheet, reducing debt principal by over $10.5 billion. This strong performance enabled Occidental to generate substantial free cash flow, which was then utilized for debt reduction and returning capital to shareholders.

Occidental is actively pursuing a low-carbon strategy, leveraging its expertise in carbon management. Key initiatives include the development of Carbon Capture, Utilization, and Storage (CCUS) projects and the commercialization of Direct Air Capture (DAC) technology. The company has begun construction on the world's largest DAC facility, expected to be operational in 2025. Occidental has also set ambitious net-zero GHG emissions goals for its operations and total carbon inventory, and it has achieved zero routine flaring in its U.S. oil and gas operations ahead of schedule.

Occidental's strategy for returning capital to shareholders involves a combination of regular dividends and share repurchases. The company declared a quarterly dividend of $0.18 per share in February 2023. Furthermore, Occidental completed its $3.0 billion share repurchase program in 2022 and authorized a new $3.0 billion program in February 2023. Occidental anticipates allocating a higher percentage of its excess free cash flow to shareholder returns in 2023 and plans to begin redeeming preferred stock.

Occidental's primary operational areas are the Permian Basin, Rockies, Gulf of Mexico, and international locations in the Middle East and North Africa. Its business strategy focuses on maximizing value through operational excellence and capital efficiency in its core oil and gas and chemical businesses. Additionally, Occidental is strategically investing in and developing its low-carbon ventures, including CCUS and DAC technologies, aiming to be a leader in providing carbon management solutions and supporting a sustainable low-carbon future.