10-KPeriod: FY2023

OCCIDENTAL PETROLEUM CORP /DE/ Annual Report, Year Ended Dec 31, 2023

Filed February 14, 2024For Securities:OXYOXY-WT

Summary

Occidental Petroleum Corporation (OXY) filed its 10-K for the fiscal year ended December 31, 2023, detailing its performance across its oil and gas, chemical, and midstream and marketing segments. The company generated significant revenue, but experienced lower commodity prices compared to the prior year, impacting profitability. A major strategic initiative highlighted is the pending acquisition of CrownRock L.P., valued at $12.0 billion, which is expected to enhance Occidental's Permian Basin operations and provide immediate cash flow accretion. Occidental is also actively pursuing its low-carbon ventures, notably with the acquisition of Carbon Engineering and progress on its Direct Air Capture (DAC) facility, STRATOS. Financially, Occidental focused on debt reduction and shareholder returns, including a dividend increase and share repurchases. The company's financial health is supported by its investment-grade credit rating, although it continues to manage risks associated with commodity price volatility, regulatory changes, and operational execution. The report emphasizes a commitment to operational excellence, capital efficiency, and sustainability, with ambitious net-zero emissions goals.

Financial Highlights

48 data points
Beta

Revenue

$23.23B

86.6% Gross Margin

Net Income

$4.70B

20.2% Net Margin

EPS (Diluted)

$3.90

Total Assets

$74.01B

Cash & Equivalents

$1.43B

Free Cash Flow

$6.61B

Financial Statements
Beta
Revenue$23.23B
Cost of Revenue$3.12B
Gross Profit$20.11B
SG&A Expenses$987.00M
Net Income$4.70B
EPS (Basic)$4.22
EPS (Diluted)$3.90
Shares Outstanding (Basic)889.20M
Shares Outstanding (Diluted)960.90M

Key Highlights

  • 1Occidental Petroleum Corporation (OXY) reported 2023 results impacted by lower commodity prices, with WTI crude averaging $77.64/bbl and Brent averaging $82.25/bbl, a decrease from 2022.
  • 2The company is pursuing a significant strategic move with the proposed $12.0 billion acquisition of CrownRock L.P., aiming to strengthen its Permian Basin presence and boost cash flow.
  • 3Occidental is advancing its low-carbon strategy, notably through the acquisition of Carbon Engineering and the construction of its first large-scale Direct Air Capture (DAC) facility, STRATOS.
  • 4The company returned capital to shareholders through dividends, declaring an increased quarterly dividend of $0.22 per share, and share repurchases totaling $1.8 billion in 2023.
  • 5Occidental achieved investment-grade credit ratings from Moody's and Fitch in 2023, reflecting improved financial leverage.
  • 6Operational focus remains on capital efficiency and cost control, with $5.0 billion invested in upstream assets in 2023 and plans for $4.8-$5.0 billion in 2024 (excluding CrownRock acquisition impact).
  • 7The chemical segment (OxyChem) delivered its third-highest year of earnings despite a softening market, driven by cost advantages and integrated operations.

Frequently Asked Questions

Occidental reported lower commodity prices in 2023 compared to 2022, impacting revenue. However, the company maintained strong operational performance, especially in the Permian Basin, and advanced its strategic initiatives, including the significant CrownRock acquisition and investments in low-carbon technologies like Direct Air Capture. Shareholder returns were prioritized through dividend payments and share repurchases.

Occidental entered into an agreement to acquire CrownRock L.P. for $12.0 billion. This acquisition is pending regulatory approval and is expected to close in the second half of 2024. Occidental anticipates that the acquisition will be immediately cash flow accretive, enhance its scale in the Midland Basin, and support its Permian Basin operations. The company plans to finance the acquisition through a combination of new debt and equity issuance, and intends to divest assets to repay debt post-closing.

Occidental is actively developing its low-carbon ventures, highlighted by the full acquisition of Carbon Engineering, a developer of Direct Air Capture (DAC) technology. Construction of its first large-scale DAC facility, STRATOS, is underway. The company also aims to achieve net-zero greenhouse gas (GHG) emissions from its operations by 2040 and for its total carbon inventory by 2050, with ongoing efforts to reduce methane emissions and routine flaring.

Occidental is focused on reducing its long-term financial leverage. The company intends to reduce outstanding debt principal to below $15 billion before resuming significant share repurchases, following the planned increase in its sustainable dividend. Capital expenditures in 2024 are planned between $6.4 billion and $6.6 billion, allocated across its business segments, with a significant portion dedicated to upstream asset development.