10-QPeriod: Q2 FY2024

OCCIDENTAL PETROLEUM CORP /DE/ Quarterly Report for Q2 Ended Jun 30, 2024

Filed August 7, 2024For Securities:OXYOXY-WT

Summary

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 billion 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 billion 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.

Financial Highlights

48 data points
Beta

Revenue

$6.82B

86.7% Gross Margin

Net Income

$1.17B

17.2% Net Margin

EPS (Diluted)

$1.03

Total Assets

$76.22B

Cash & Equivalents

$1.84B

Free Cash Flow

$623.00M

Financial Statements
Beta
Revenue$6.82B
Cost of Revenue$910.00M
Gross Profit$5.91B
SG&A Expenses$259.00M
Net Income$1.17B
EPS (Basic)$1.10
EPS (Diluted)$1.03
Shares Outstanding (Basic)893.80M
Shares Outstanding (Diluted)958.90M

Key Highlights

  • 1Net 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.
  • 2Net 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.
  • 3The CrownRock Acquisition, valued at approximately $11.1 billion (preliminary allocation), closed on August 1, 2024, significantly expanding OXY's Permian Basin footprint.
  • 4Occidental 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.
  • 5Capital 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.
  • 6The 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.
  • 7Occidental declared dividends of $0.44 per share for the first six months of 2024, totaling $398 million, demonstrating a commitment to shareholder returns.

Frequently Asked Questions

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.

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.

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.

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.