10-QPeriod: Q1 FY2021

OCCIDENTAL PETROLEUM CORP /DE/ Quarterly Report for Q1 Ended Mar 31, 2021

Filed May 10, 2021For Securities:OXYOXY-WT

Summary

Occidental Petroleum Corporation (OXY) reported a net loss of $146 million ($0.36 per diluted share) for the first quarter of 2021, a significant improvement from the $2.013 billion loss ($2.49 per diluted share) in the same period of 2020. This turnaround was driven by a substantial increase in commodity prices, particularly for oil and natural gas, alongside higher chemical product prices. Net sales for the quarter were $5.3 billion, down from $6.6 billion in the prior year's quarter, primarily due to lower sales volumes and derivative gains recognized in Q1 2020. The company generated positive operating cash flow of $910 million, an increase from $788 million in operating cash flow from continuing operations, signaling a healthy recovery in its core business. While capital expenditures remain significant at $579 million, Occidental is actively managing its balance sheet, utilizing proceeds from asset sales and operational cash flow to reduce debt and financial obligations. The company ended the quarter with $2.3 billion in cash and cash equivalents, demonstrating improved liquidity.

Financial Highlights

48 data points
Beta

Revenue

$5.18B

88.5% Gross Margin

Net Income

-$146.00M

-2.8% Net Margin

EPS (Diluted)

$-0.36

Total Assets

$79.36B

Cash & Equivalents

$2.47B

Free Cash Flow

$331.00M

Financial Statements
Beta
Revenue$5.18B
Cost of Revenue$594.00M
Gross Profit$4.59B
SG&A Expenses$166.00M
Operating Income$299.00M
Net Income-$146.00M
EPS (Basic)$-0.37
EPS (Diluted)$-0.36
Shares Outstanding (Basic)933.10M
Shares Outstanding (Diluted)947.90M

Key Highlights

  • 1Occidental Petroleum reported a net loss of $146 million for Q1 2021, a substantial improvement from a $2.013 billion net loss in Q1 2020.
  • 2Net sales decreased to $5.3 billion in Q1 2021 from $6.6 billion in Q1 2020, primarily due to lower sales volumes.
  • 3The company generated strong operating cash flow of $910 million in Q1 2021, indicating a recovery in core business operations.
  • 4Total assets decreased slightly to $79.4 billion as of March 31, 2021, from $80.1 billion as of December 31, 2020.
  • 5Total liabilities also saw a decrease, ending Q1 2021 at $79.4 billion compared to $80.1 billion at year-end 2020, with long-term debt, net at $35.5 billion.
  • 6Occidental is actively managing its debt, repaying $174 million in the first quarter and aiming to use excess cash flow and asset sale proceeds to further strengthen its balance sheet.
  • 7The company reported an income from continuing operations of $299 million in Q1 2021, a significant turnaround from a loss of $2.013 billion in Q1 2020, driven by higher commodity prices.

Frequently Asked Questions

Occidental Petroleum reported a net loss of $146 million for the first quarter of 2021, a significant improvement from a net loss of $2.013 billion in the same period of 2020. This improvement was driven by higher commodity prices and a 19% increase in average realized oil prices, partially offset by lower sales volumes. Income from continuing operations turned positive at $299 million, compared to a loss of $2.013 billion in the prior year's quarter.

Occidental generated $910 million in net cash from operating activities in Q1 2021, providing strong liquidity. The company repaid $174 million in debt during the quarter and continues to target debt reduction using excess cash flow and proceeds from asset sales. As of March 31, 2021, Occidental had $2.3 billion in cash and cash equivalents and maintained access to its $5.0 billion revolving credit facility.

The Oil and Gas segment's performance improved due to higher commodity prices, with average realized oil prices increasing by 22% year-over-year. Lower operating and transportation costs also contributed positively. However, sales volumes decreased by approximately 25% due to reduced capital investment in areas like the Permian and DJ Basin, and higher depreciation, depletion, and amortization rates.

Occidental is involved in various lawsuits, claims, and legal proceedings, including environmental remediation matters and a specific arbitration award related to its former operations in Ecuador. While management believes the resolution of these matters will not have a material adverse effect in aggregate, they acknowledge that unfavorable outcomes could impact future results. The company has accrued reserves for these contingencies, but potential additional losses could be significant.