01—Abstract
Summary
Summary of the 10-Q filed August 7, 2024. Cited figures are marked; the original filing is the authoritative source.
Occidental Petroleum Corporation (OXY) reported solid financial results for the second quarter and first half of 2024.
The company demonstrated resilient revenue generation, with net sales totaling $6.82 billiona for the quarter, a slight increase year-over-year, and $12.79 billion for the six months. Profitability also showed strength, with net income attributable to common stockholders reaching $992 million for the quarter and $1.71 billion for the six months. These results were supported by improved production volumes in the Oil and Gas segment, particularly in the Gulf of Mexico, and favorable pricing in certain chemical products.
A significant development for the company is the successful closure of the CrownRock Acquisition on August 1, 2024, for approximately $11.1 billionb in total purchase price (as of the filing date's preliminary allocation). This acquisition is expected to enhance OXY's Permian Basin portfolio and contribute immediately to cash flow.
In anticipation of this, the company has been actively managing its balance sheet, issuing new debt and planning significant asset divestitures to reduce leverage post-acquisition. Occidental remains focused on its strategic priorities of maximizing cash flow, delivering a sustainable dividend, and investing in growth opportunities while advancing its low-carbon ventures.
02—Key points
Key Highlights
- Net sales for the second quarter of 2024 were $6.82 billion, up slightly from $6.70 billion in Q2 2023, driven by higher domestic crude oil volumes and prices.
- Net income attributable to common stockholders was $992 million ($1.03 diluted EPS) for Q2 2024, an increase from $605 million ($0.63 diluted EPS) in Q2 2023, reflecting improved operational performance.
- The CrownRock Acquisition, valued at approximately $11.1 billion (preliminary allocation), closed on August 1, 2024, significantly expanding OXY's Permian Basin footprint.
- Occidental generated $4.4 billion in net cash from operating activities for the first six months of 2024, though this is a decrease from $5.9 billion in the prior year, largely due to working capital changes.
- Capital expenditures for the first six months of 2024 totaled $3.6 billion, up from $3.1 billion in the prior year, with investments in oil and gas, low-carbon ventures (STRATOS DAC facility), and chemical plant expansions.
- The company announced plans for $4.5 billion to $6 billion in asset divestitures within 18 months of the CrownRock acquisition closure, with proceeds to be used for debt reduction.
- Occidental declared dividends of $0.44 per share for the first six months of 2024, totaling $398 million, demonstrating a commitment to shareholder returns.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2024filed August 7, 2024Financial Statements
Q2 FY2024 against Q2 FY2023
| Line item | Q2 FY2024Q2 FY2023 | Change |
|---|---|---|
| Revenue | $6.82B$6.60B | +3.3% |
| Cost of Revenue | $910.00M$791.00M | +15.0% |
| Gross Profit | $5.91B$5.81B | +1.7% |
| SG&A Expenses | $259.00M$277.00M | −6.5% |
| Net Income | $1.17B$860.00M | +36.0% |
| EPS (Basic) | $1.10$0.68 | +61.8% |
| EPS (Diluted) | $1.03$0.63 | +63.5% |
| Shares Outstanding (Basic) | 893.80M889.30M | +0.5% |
| Shares Outstanding (Diluted) | 958.90M958.80M | 0.0% |
05—Questions
Frequently Asked Questions
What is the financial performance of Occidental Petroleum for the second quarter of 2024?
In the second quarter of 2024, Occidental Petroleum reported net sales of $6.82 billion, an increase from $6.70 billion in the same period of 2023. Net income attributable to common stockholders was $992 million, or $1.03 per diluted share, up from $605 million, or $0.63 per diluted share, in the prior year's second quarter. This improvement was driven by higher domestic crude oil volumes and prices, alongside operational recoveries in the Gulf of Mexico.
How has the CrownRock Acquisition impacted Occidental Petroleum's financial position and strategy?
The CrownRock Acquisition, which closed on August 1, 2024, for a preliminary allocated purchase price of approximately $11.1 billion, is a significant event. Occidental financed this acquisition through new debt issuances totaling $9.7 billion and the issuance of common stock. Strategically, the company plans to divest $4.5 billion to $6 billion in assets to reduce leverage and intends to repay at least $4.5 billion in debt within 12 months of closing. The acquisition is expected to enhance OXY's Permian Basin position and be immediately accretive to cash flow.
What is Occidental Petroleum's outlook on debt and liquidity?
As of June 30, 2024, Occidental had $1.8 billion in cash and cash equivalents and significant borrowing capacity under its revolving credit facility. The company generated $4.4 billion in operating cash flow for the first six months of 2024. Post-CrownRock acquisition, Occidental is focused on deleveraging, with plans to use divestiture proceeds and excess cash flow to reduce its debt principal below $15 billion. Management anticipates sufficient liquidity to meet near-term obligations.
How are Occidental Petroleum's different business segments performing?
The Oil and Gas segment showed improved earnings due to higher crude volumes and prices, despite lower natural gas prices. The Chemical segment saw increased earnings driven by higher caustic soda and PVC prices, though overall year-to-date results were impacted by lower caustic soda realized prices. The Midstream and Marketing segment reported increased earnings, benefiting from improved gas transportation spreads and equity investment income from WES, alongside growth in low-carbon ventures.
06—Continue