Occidental Petroleum (OXY) Q2 2024 earnings summary

Executive summary

• Achieved highest quarterly U.S. onshore oil & gas production in four years at 1,258 Mboed, surpassing guidance midpoint, driven by operational excellence and well productivity improvements across all basins.

• Closed the CrownRock acquisition on August 1, 2024, adding high-margin, low-decline Permian assets, funded by $9.7 billion in new debt and 29.6 million shares issued.

• Progressed on a $4.5–$6 billion divestiture program, with $1 billion in Permian Basin divestitures closed or announced year-to-date and an $818 million Delaware Basin asset sale expected to close by end of Q3 2024.

• Generated $1.3 billion in free cash flow before working capital in Q2 2024, driven by production outperformance and cost efficiencies.

• Secured a 500,000 metric ton CDR credits purchase agreement with Microsoft, marking the largest DAC CDR purchase to date and advancing low-carbon ventures.

Financial highlights

• Q2 2024 net income attributable to common stockholders was $992 million, up 64% year-over-year, with diluted and adjusted EPS of $1.03.

• Operating cash flow before working capital was $3.0 billion; free cash flow before working capital was $1.3 billion.

• Net capital expenditures were $1.7 billion; unrestricted cash balance at quarter-end was $1.8 billion.

• Lease operating expenses per BOE decreased by over $0.60, a 6% improvement over the prior three quarters.

• Midstream segment outperformed, with adjusted pre-tax income over $180 million above guidance midpoint.

Outlook and guidance

• Increased full-year production guidance midpoint to 1.32 million BOE/d with CrownRock; excluding CrownRock, production expected to remain flat despite divestitures.

• OxyChem full-year guidance revised down to $1–$1.1 billion due to challenging conditions in China and delayed interest rate cuts.

• Raised full-year midstream and marketing guidance by $220 million after strong Q2 performance.

• Full-year net capital range increased to $6.8–$7 billion, reflecting CrownRock integration.

• Interest expense for FY 2024 expected at ~$1.2 billion, reflecting CrownRock integration.