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OCCIDENTAL PETROLEUM CORP /DE/ 8-K Report, Financial Results (May 7, 2024)

Reports
Earnings & Results·Exhibits & Filings
Filing Date
Filed May 7, 2024
Period End
May 7, 2024
Securities
OXYOXY-WT
In the record · 2016–202610-K1210-Q328-K158

OXY filed 12 annual reports (10-K), 32 quarterly reports (10-Q) and 158 current reports (8-K) between 2016 and 2026.

  1. Material agreement8-K · Mar ’18Mar ’18
  2. Material agreement8-K · Mar ’20Mar ’20
  3. Leadership change8-K · Mar ’22Mar ’22
  4. Leadership change8-K · May ’26May ’26

01—Abstract

Summary

Summary of the 8-K filed May 7, 2024. Cited figures are marked; the original filing is the authoritative source.

Occidental Petroleum (OXY) reported first-quarter 2024 net income attributable to common stockholders of $718 milliona, or $0.75 per diluted share, versus $983 million ($1.00) in Q1 2023.

Excluding items affecting comparability (a net $114 millionb after-tax benefit, driven by litigation settlement gains tied to the Andes arbitration, asset-sale gains at WES, and a $182 million after-tax discontinued operations gain, partially offset by derivative losses, legal reserves and CrownRock acquisition-related costs), adjusted income was $604 million, or $0.63 per diluted share, down from $1.09 a year earlier. The decline reflects weaker commodity prices (worldwide realized oil fell to $76.04/bbl from $74.22 in Q1 2023 but was down 4% sequentially, and domestic gas fell to $1.61/Mcf from $3.01) and lower production. Operationally, total production was 1,172 Mboed, near the midpoint of guidance despite an extended third-party outage in the eastern Gulf of Mexico that resumed in mid-April.

Oil and gas adjusted pre-tax income was $1.3 billionc, OxyChem exceeded guidance with $260 million of adjusted pre-tax income, and midstream and marketing beat guidance by roughly $100 million. Cash generation was solid: operating cash flow was $2.0 billion and cash flow before working capital was $2.4 billion, with capex net of noncontrolling interest of $1.7 billion, yielding free cash flow before working capital of $720 million. Management emphasized that the company is positioned for free cash flow growth.

For investors, the headline GAAP EPS beat is flattered by one-time gains, so the adjusted figure is the better gauge of underlying performance. Balance sheet metrics were stable, with cash of $1.27 billiond, long-term debt of about $18.5 billion, and preferred stock reduced to $8.3 billion. Quarterly dividends per common share rose to $0.22 from $0.18, and diluted shares fell to 948.6 million from 975.3 million a year earlier, reflecting ongoing buybacks and capital return.

02—Key points

Key Highlights

  1. Reported diluted EPS of $0.75 (net income attributable to common of $718M) versus $1.00 in Q1 2023, boosted by about $114M of after-tax items affecting comparability.
  2. Adjusted diluted EPS of $0.63 (adjusted income of $604M), down from $1.09 in Q1 2023, reflecting lower commodity prices and lower domestic gas realizations.
  3. Operating cash flow of $2.0B and cash flow before working capital of $2.4B; free cash flow before working capital of $720M after $1.7B of net capex.
  4. Total production of 1,172 Mboed, near the midpoint of guidance, despite an extended third-party outage in the eastern Gulf of Mexico (Gulf of Mexico output of 90 Mboed, resumed mid-April).
  5. OxyChem adjusted pre-tax income of $260M exceeded guidance by $10M; midstream and marketing adjusted results beat guidance by about $100M.
  6. Quarterly common dividend increased to $0.22 per share from $0.18, and diluted share count fell to 948.6M from 975.3M year over year.
  7. Discontinued operations contributed $182M after tax ($0.19 per diluted share) to reported results.

03—Questions

Frequently Asked Questions

  1. Why is the reported EPS ($0.75) so much higher than the adjusted EPS ($0.63)?

    The difference comes from items affecting comparability totaling about $114M after tax, or $0.12 per diluted share. The main positive items were litigation settlement gains (primarily the Andes arbitration), asset-sale gains included in WES equity income, and a $182M after-tax gain from discontinued operations. These were partially offset by derivative losses, international and chemical legal reserves, and CrownRock acquisition-related costs.

  2. How did commodity prices affect Occidental's first-quarter 2024 results?

    Worldwide realized oil prices were $76.04/bbl, down 4% from the prior quarter, while domestic realized gas fell 14% sequentially to $1.61/Mcf (versus $3.01 a year earlier). Realized NGL prices rose 6% sequentially to $22.14/bbl. Lower crude prices and lower domestic crude volumes were the main reasons adjusted oil and gas income declined from the prior quarter.

  3. Did Occidental meet its production and operating guidance?

    Production of 1,172 Mboed came in near the midpoint of guidance despite an extended third-party outage in the eastern Gulf of Mexico. Rockies & Other Domestic output of 286 Mboed exceeded guidance, Permian (567 Mboed) and International (229 Mboed) were within guidance, and OxyChem and midstream/marketing both beat their guidance.

  4. How strong is Occidental's cash generation and what does it mean for capital returns?

    Operating cash flow was $2.0B and cash flow before working capital was $2.4B. After $1.7B of net capex, free cash flow before working capital was $720M. Management says the company is positioned for free cash flow growth. Dividends per share rose to $0.22, and the diluted share count fell about 3% year over year, reflecting continued capital return. Note that this quarter's free cash flow is well below the $1.7B generated in Q1 2023, mainly because commodity prices were lower.

04—Continue

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