Occidental Petroleum Corp Q4 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Arun Jayaram - J.P. Morgan Securities LLC - Analyst : I wanted to see if you could shed some light on the Gulf of Mexico outlook for 2025, that you have perhaps some maintenance in 1Q? And maybe help us think about how the quarterly trajectory could be in the Gulf, and maybe some of the projects that are contributing to a little bit of a

Question: Arun Jayaram - J.P. Morgan Securities LLC - Analyst : Great. That's super helpful. Thanks for the detail. You mentioned that you've announced, I think, in early February, an extension to the Ecopetrol JV in the Midland Basin. Can you just give us just some of the basic terms of the agreement, and just confirm that this is fully baked in your 2025 guide?

Question: Arun Jayaram - J.P. Morgan Securities LLC - Analyst : Great. Thanks a lot.

Question: Betty Jiang - Barclays Capital Inc. - Analyst : I want to ask about -- start with the Rockies program in 2025, but also how you see that development evolving over the next few years. We did notice, based on the presentation, that the activity level is much lower, both from a gross and net basis year-on-year, and CapEx is flattish, so just, are there any non-productive capital in there? Does that impact 2026 and beyond? And how should we just be thinking about that program going forward?

Question: Betty Jiang - Barclays Capital Inc. - Analyst : That's helpful. Thank you. My follow-up is on the debt reduction. You guys have made really strong headways on debt reduction in 2024, and latest in 1Q with the non-core asset sale. There's that $15 billion net debt target still out there. Do you still feel good about reaching that level by late '26 or early 2027? Obviously, commodity price is a factor, but just wanted to get your sense on that trajectory to that number.

Question: Neal Dingmann - Truist Securities Inc. - Analyst : First, my first question, Vicki, is just maybe around your 2025 guide. Specifically, I think you're talking about 1.4 million BOE per day production and around, what, $7.5 million CapEx. I'm just wondering, around those two, what type of service cost are you all assuming in there? And how much operational efficiencies, because you certainly have continued to see that both in your DJ and Permian. I'm just wondering if you're expecting more?

Question: Neal Dingmann - Truist Securities Inc. - Analyst : (laughter)

Question: Neal Dingmann - Truist Securities Inc. - Analyst : Great details. And then just a second quick one, just on M&A specifically. Vicki, I'd love to hear your thoughts if you think most of the higher-quality domestic assets have now transacted. And if so, would that -- would you now consider maybe boosting international M&A? Or what's your thoughts around that?

Question: Paul Cheng - Scotia Howard Weil - Analyst : Vicki, did I get it right that in one of -- I don't think it's yours, or maybe it's Sunil's prepared remarks, that you expect the Permian oil cut is going to be higher in 2024 -- 2025? And if that is correct, what will drive up the oil cut over there? That's the first question.

Question: Paul Cheng - Scotia Howard Weil - Analyst : Yeah. Thank you, Sunil. Rich, what percent of your 2025 program in the Permian is on the secondary branches versus the 2024? And you're saying that the secondary benches is better, so can you give us what is the oil cut in those secondary benches?

Question: Roger Read - Wells Fargo Securities, LLC - Analyst : Maybe just to quickly come back to the question on drilling and completion efficiencies on slide 13, you spelled out the well cost declines this year, 7%, and then there is expect to save $1 million per well across remaining program. What is the -- I'm assuming the $1 million's strung out over a longer period of time, but I just wanted to get a little clarity on maybe the two different lines of thinking.

Question: Roger Read - Wells Fargo Securities, LLC - Analyst : Okay. Got you. So just sort of built into the things we've seen and will see, but not a separate goal going forward.

Question: Roger Read - Wells Fargo Securities, LLC - Analyst : Okay. And then to change pace just a little bit here with the STRATOS start-up, given this is a very, I don't want to say brand-new technology, but it's a brand-new-at-scale commercial system. What are the main, I don't know if you want to call them hurdles or milestones or whatever, we should be watching as you turn this thing on, ramp it up, commission it this year? I understand -- not to build any real profitability in, but what are you looking at as key challenges that will make you feel more comfortable as you go through the commissioning process?

Question: Roger Read - Wells Fargo Securities, LLC - Analyst : Appreciate that. It will be exciting to watch. Thanks.

Question: Neil Mehta - Goldman Sachs & Company, Inc. - Analyst : Just a couple of Midstream questions. Just would love your perspective on the key drivers of that business, looking at the guide here for '25. Q1 looks a little bit weaker, and then I guess it builds through the year as closer to breakeven, so just your perspective on the variables that are going into that? And then I have a follow-up on this.

Question: Neil Mehta - Goldman Sachs & Company, Inc. - Analyst : Yeah, really good numbers, Sunil. Thank you. As a follow-up is, just the framework around WES monetization, recognizing there are a lot of moving pieces, but how are you thinking about the pluses and minuses as we think about the deleveraging targets? How should we think about the tax component that goes into that equation as well?

Question: John Abbott - Wolfe Research - Analyst : This is John Abbott, on for Doug Leggate. Thank you for taking our questions. Our first question is on the Gulf of America. I mean you spoke about 2025, but can you talk about visibility beyond 2025 and how you see sustainable production?

Question: John Abbott - Wolfe Research - Analyst : Appreciate it. And then the next question that we had was on your EOR business. Do you no longer break out your production in your financials? Could you provide an update where production stands? And is it still around 140,000 barrels per day, which was your run rate a couple of years ago?

Question: Leo Mariani - Roth MKM - Analyst : I wanted to ask just a general question around the Low Carbon Ventures business here. Obviously, we've had a significant change in the administration here in the US. Just wanted to try to get a sense if you all are thinking about that business differently over the next four years as you kind of proceed to prosecute things here.