01—Abstract
Summary
Summary of the 8-K filed August 7, 2024. Cited figures are marked; the original filing is the authoritative source.
Occidental Petroleum (OXY) reported second quarter 2024 results on August 7, 2024, delivering net income attributable to common stockholders of $992 milliona, or $1.03 per diluted share, with adjusted income of $993 million, or $1.03 per diluted share.
Operating cash flow was $2.4 billionb and operating cash flow before working capital was $3.0 billion. Capital spending, net of noncontrolling interest, was $1.7 billion, producing free cash flow before working capital of $1.3 billion for the quarter. Year-to-date, free cash flow before working capital totaled $2.0 billion.
Operationally, total worldwide production reached 1,258 Mboed, exceeding the midpoint of guidance by 6 Mboed, led by the Permian (587 Mboed) and Gulf of Mexico (138 Mboed), which recovered from an extended third-party outage in mid-April. Midstream and marketing beat guidance for pre-tax adjusted income by more than $180 millionc, and OxyChem delivered pre-tax income of $296 million, roughly in line with guidance. Worldwide realized oil prices rose 5% quarter over quarter to $79.89 per barrel, while domestic realized gas prices fell 66% to $0.54 per Mcf, a sharp drag on the domestic gas business.
Management maintained full-year production guidance excluding CrownRock, even after accounting for an expected fourth-quarter divestiture of about 15 Mboed. The company emphasized the addition of CrownRock as a growth driver. The filing is furnished rather than filed, so the results are not subject to Section 18 liability unless specifically incorporated by reference, and the release includes forward-looking statements and non-GAAP measures that investors should review in context.
02—Key points
Key Highlights
- Net income attributable to common stockholders of $992 million, or $1.03 per diluted share, versus $718 million, or $0.75 per diluted share, in Q1 2024
- Operating cash flow of $2.4 billion; operating cash flow before working capital of $3.0 billion
- Free cash flow before working capital of $1.3 billion for the quarter, with $2.0 billion year-to-date
- Worldwide production of 1,258 Mboed, 6 Mboed above the guidance midpoint, led by the Permian at 587 Mboed
- Midstream and marketing pre-tax adjusted income exceeded guidance by over $180 million; OxyChem pre-tax income was $296 million
- Worldwide realized oil price of $79.89 per barrel, up 5% quarter over quarter; domestic realized gas price fell 66% to $0.54 per Mcf
- Full-year production guidance maintained excluding CrownRock, despite an expected 15 Mboed divestiture in Q4 2024
03—Questions
Frequently Asked Questions
Did Occidental beat or miss expectations for Q2 2024?
The release does not include consensus estimates, so a beat or miss cannot be determined from this filing alone. Relative to its own guidance, however, Occidental reported production above the guidance midpoint and midstream and marketing income more than $180 million above guidance, while OxyChem came in approximately in line.
How did free cash flow trend in the quarter?
Free cash flow before working capital rose to $1.3 billion in Q2 2024 from $720 million in Q1 2024. The improvement reflected higher operating cash flow before working capital of $3.0 billion, partly offset by net capital spending of $1.7 billion.
Why did domestic gas prices drop so sharply?
Average domestic realized gas prices fell 66% from the prior quarter to $0.54 per Mcf, while the NYMEX natural gas index averaged $1.99 per MMBtu in the quarter. The filing attributes the weakness to lower domestic gas prices, which offset gains in crude oil, and it notes that domestic gas realizations reached only 27% of NYMEX.
What does the CrownRock acquisition mean for production outlook?
Management maintained full-year production guidance excluding CrownRock, so CrownRock volumes are not included in the base outlook. The company also expects to divest about 15 Mboed in the fourth quarter, which it says is absorbed within the maintained guidance.
Are the adjusted results comparable to GAAP results?
Adjusted income and free cash flow before working capital are non-GAAP measures that exclude items affecting comparability and working capital changes. Q2 2024 reported and adjusted earnings per diluted share were both $1.03, so the items affecting comparability were minimal in the quarter. Investors should review the reconciliation schedules, since the company's definitions may differ from those used by peers.
04—Continue