OCCIDENTAL PETROLEUM CORP DE

Occidental’s operations, financial condition, cash flows and levels of expenditures are highly dependent on oil prices and, to a lesser extent, NGL and natural gas prices, the Midland-to-Gulf-Coast oil spreads, chemical product prices and inflationary pressures in the macro-economic environment. The average WTI price per barrel for the three months ended March 31, 2024 was $76.96, comparedto $78.32 for the three months ended December 31, 2023 and $76.13 for the three months ended March 31, 2023. Changes in prices could result in adjustments in capital investment levels and how such capital is allocated, which could impact production volumes. It is expected that the price of oil will be volatile for the foreseeable future given the current geopolitical risks, evolving macro-economic environment that impacts energy demand, future actions by OPEC and non-OPEC oil producing countries, the Russia-Ukraine war and the conflicts in the Middle East, and the Biden Administration's management of the U.S. Strategic Petroleum Reserve. Seasonality is not a primary driver of changes in Occidental's consolidated quarterly earnings during the year.

Occidental works to manage inflation impacts by capitalizing on operational efficiencies, proactive contract management and working closely with vendors to secure the supply of critical materials. As of March 31, 2024, substantially all of Occidental's outstanding debt was fixed rate.

2024 PRIORITIES

Occidental’s capital and operational priorities for 2024 are intended to maximize cash flow through focused investments in short and medium-cycle projects to enhance current year and future cash flows. Occidental intends to utilize future operating cash flows to:

■Maintain production base to preserve asset base integrity and longevity;

■Deliver a sustainable and growing dividend;

■Enhance its asset base with new investments in its cash-generative energy and chemical businesses as well as emerging low-carbon businesses;

■Advance technologies and business solutions to help drive a sustainable low-carbon future;

■Further reduce long-term financial leverage; and

■Strengthen Occidental’s U.S. onshore portfolio with premier Permian Basin assets through the CrownRock Acquisition, which is expected to be immediately cash flow accretive.

During the first three months of 2024, Occidental generated cash flow from operations of $2.0 billion and incurred capital expenditures of $1.8 billion.

DEBT

As of March 31, 2024, Occidental’s long-term debt was rated Baa3 by Moody’s Investors Service, BBB- by Fitch Ratings and BB+ by Standard and Poor’s. Occidental's credit rating was upgraded to investment grade by Moody's Investors Service in March 2023 and by Fitch Ratings in May 2023. Any downgrade in credit ratings could impact Occidental's ability to access capital markets and increase its cost of capital. In addition, Occidental or its subsidiaries may be requested, elect to provide or in some cases be required to provide collateral in the form of cash, letters of credit, surety bonds or other acceptable support as financial assurance of their performance and payment obligations under certain contractual arrangements, such as pipeline transportation contracts, oil and gas purchase contracts and certain derivative instruments; certain permits, including with respect to carbon capture, utilization and storage activities; and environmental remediation matters. In February 2024, Occidental entered into a Third Amended and Restated Credit Agreement for the RCF retaining its $4.0 billion borrowing capacity, but extending the maturity date to June 30, 2028. No amounts were drawn under the facility as of March 31, 2024. Occidental has $1.1 billion of debt maturities due in the next 12 months.

SHAREHOLDER RETURNS

During the three months ended March 31, 2024, Occidental declared dividends to common shareholders of $197 million or $0.22 per share.