10-QPeriod: Q3 FY2024

OCCIDENTAL PETROLEUM CORP /DE/ Quarterly Report for Q3 Ended Sep 30, 2024

Filed November 12, 2024For Securities:OXYOXY-WT

Summary

Occidental Petroleum Corporation (OXY) reported its third-quarter and year-to-date results for 2024, demonstrating resilience in a fluctuating market environment. While net sales for the nine months ended September 30, 2024, saw a decrease compared to the prior year, driven by lower commodity prices and sales volumes in certain segments, the company maintained profitability and generated significant operating cash flow. The recent completion of the substantial CrownRock acquisition in August 2024 is a key strategic development, expected to bolster the company's oil and gas portfolio in the Permian Basin and contribute to future production and cash flow. Despite increased interest expenses related to this acquisition, OXY managed its debt levels, actively repaying a portion of its borrowings. Financially, OXY's balance sheet shows an increase in total assets and total liabilities, reflecting the impact of the CrownRock acquisition. The company's liquidity remains robust, supported by substantial cash reserves and undrawn credit facilities. Strategic priorities continue to focus on maintaining production, delivering a sustainable dividend, enhancing asset base through investments, advancing low-carbon solutions, and prioritizing debt reduction until principal debt falls below $15 billion. Investors will note the company's ongoing efforts to navigate market volatility and integrate its strategic acquisitions while managing its financial obligations.

Financial Highlights

49 data points
Beta

Revenue

$7.17B

87.6% Gross Margin

Net Income

$1.14B

15.9% Net Margin

EPS (Diluted)

$0.98

Total Assets

$85.80B

Cash & Equivalents

$1.76B

Free Cash Flow

$2.00B

Financial Statements
Beta
Revenue$7.17B
Cost of Revenue$889.00M
Gross Profit$6.28B
SG&A Expenses$268.00M
Net Income$1.14B
EPS (Basic)$1.03
EPS (Diluted)$0.98
Shares Outstanding (Basic)927.50M
Shares Outstanding (Diluted)975.70M

Key Highlights

  • 1Completed the significant acquisition of CrownRock, L.P. in August 2024 for $12.4 billion, expanding its Permian Basin oil and gas assets.
  • 2Reported net income attributable to common stockholders of $964 million ($0.98 diluted EPS) for Q3 2024 and $2,674 million ($2.77 diluted EPS) for the nine months ended September 30, 2024.
  • 3Generated $8.18 billion in operating cash flow from continuing operations for the nine months ended September 30, 2024.
  • 4Total assets increased to $85.8 billion as of September 30, 2024, primarily due to the CrownRock acquisition.
  • 5Long-term debt, net, increased to $25.5 billion as of September 30, 2024, reflecting debt issued for the CrownRock acquisition, though the company repaid $4.0 billion of debt during the nine-month period.
  • 6Divested non-core assets in the Powder River Basin and certain Delaware Basin assets, realizing a pre-tax loss of $479 million, alongside a pre-tax gain of $489 million from the sale of WES units.
  • 7Maintained strong liquidity with $1.8 billion in cash and cash equivalents and significant undrawn capacity on its revolving credit facility and receivables securitization facility.

Frequently Asked Questions

The CrownRock acquisition, which closed on August 1, 2024, significantly impacted Occidental's financial statements. Total assets increased to $85.8 billion as of September 30, 2024, from $74.0 billion at the end of 2023, largely due to the acquisition. Long-term debt, net, rose to $25.5 billion from $18.5 billion, reflecting approximately $9.7 billion in new debt issued and $1.2 billion of assumed CrownRock debt. The acquisition is expected to enhance Occidental's oil and gas portfolio in the Permian Basin and contribute to future production and cash flow. The company also incurred increased interest expenses related to the new debt.

For the nine months ended September 30, 2024, net sales decreased to $19.965 billion from $21.085 billion in the prior year. This decrease was primarily attributed to lower realized prices across most product lines, particularly in the chemical segment (caustic soda) and lower domestic natural gas prices in the oil and gas segment, partially offset by higher oil prices. Net income attributable to common stockholders for the nine months decreased to $2.674 billion from $2.744 billion in the prior year, with diluted EPS at $2.77 compared to $2.83.

Occidental maintains a strong liquidity position with $1.8 billion in cash and cash equivalents as of September 30, 2024. The company also has $4.15 billion in borrowing capacity under its revolving credit facility and $600 million under its receivables securitization facility, with no outstanding borrowings on either as of the reporting date. Occidental's debt management strategy prioritizes deleveraging, aiming to reduce principal debt below $15 billion. During the first nine months of 2024, the company repaid $4.0 billion of debt and issued approximately $9.7 billion in new debt for the CrownRock acquisition.

During the third quarter of 2024, Occidental sold non-core assets in the Powder River Basin and certain Delaware Basin assets for net proceeds of $779 million, recognizing a pre-tax loss of $479 million. Additionally, the company sold 19.5 million limited partner units in WES, generating proceeds of $697 million and a pre-tax gain of $489 million. These divestitures align with the company's strategy to optimize its asset portfolio.