OCCIDENTAL PETROLEUM CORP DE
For the period ended Jun 30, 2024. Filed Aug 7, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 7, 2024
OXY$56.38+0.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-07.
0000797468-24-000095
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCautionary Statement Regarding Forward-Looking StatementsCurrent Business OutlookConsolidated Results of OperationsIncome TaxesLiquidity and Capital ResourcesEnvironmental Liabilities and ExpendituresLawsuits, Claims, Commitments and ContingenciesCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-07.
0000797468-24-000136
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCautionary Statement Regarding Forward-Looking StatementsCurrent Business OutlookConsolidated Results of OperationsIncome TaxesLiquidity and Capital ResourcesEnvironmental Liabilities and ExpendituresLawsuits, Claims, Commitments and ContingenciesThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 89 previous paragraphs and 94 current paragraphs.
51 unchanged; 30 reworded; 12 added; 5 removed; 3 previous and 1 current paragraphs rearranged.
Tables are not compared: 9 previous and 11 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (12)
Current report
■Complete a $4.5 billion to $6 billion asset divestiture program within 18 months of closing the CrownRock Acquisition, and;
Current report
■Apply the proceeds from asset divestitures to deleveraging until principal debt is below $15 billion.
Current report
As of June 30, 2024, Occidental has $1.2 billion of debt maturities due in the next 12 months. Subsequent to June 30, 2024, in July 2024, Occidental repaid $402 million of current maturities andamended and extended the maturity date of its existing receivables securitization facility to July 30, 2027.
Current report
In December 2023, Occidental entered into an agreement to purchase CrownRock L.P. for total consideration of approximately $12.4 billion, consisting of approximately $9.4 billion of cash consideration (inclusive of certain working capital and other customary purchase price adjustments), approximately 29.6 million shares of common stock of Occidental, and the assumption of $1.2 billion of existing debt of CrownRock. The acquisition closed August 1, 2024, adding to Occidental's oil and gas portfolio in the Permian Basin.
Current report
In connection with the CrownRock Acquisition, Occidental issued new debt comprised of a combination of the 364-day and two-year term loans totaling $4.7 billion and senior unsecured notes totaling $5.0 billion in July 2024. Occidental's credit ratings were reaffirmed by credit agencies post bond offering launch. The term loans and notes issued comprised the following tranches:
Current report
In July 2024, Occidental entered into an agreement to sell certain Delaware Basin assets in Texas and New Mexico for approximately $818 million. The sales proceeds will be used to repay debt. The transaction is expected to close in the third quarter of 2024, subject to customary closing conditions. As of the date of this filing, Occidental has closed or announced divestitures totaling $970 million in 2024.
Current report
Net sales increased for the three months ended June 30, 2024, compared to the three months ended March 31, 2024, primarily due to higher domestic crude oil prices and volumes in the oil and gas segment. The increase in volume was primarily due to production resuming in Eastern Gulf of Mexico in April 2024, which was previously shut-in due to a third-party outage. Net sales also improved because of improved gas transportation spreads from the Permian to the Gulf Coast in the midstream and marketing segment.
Current report
Asset impairments and other charges for the six months ended June 30, 2023 included a pre-tax impairment of $180 million related to undeveloped acreage in the northern non-core area of the Powder River Basin and a $29 million impairment related to an equity method investment in the Black Butte Coal Company.
Current report
Average daily sales volumes remained consistent for the six months ended June 30, 2024, compared to the same period in 2023. The decrease in average daily domestic sales volumes was primarily due to the third-party shut-in in the Eastern Gulf of Mexico, which impacted 2024 production. The domestic decrease was offset by an increase in average daily international sales volumes, which was primarily due to higher Al Hosn Gas production, as the Al Hosn Gas expansion project was completed in the three months ended June 30, 2023.
Current report
Chemical segment earnings for the three months ended June 30, 2024 were $296 million, compared to $254 million for the three months ended March 31, 2024. The increase in segment earnings was primarily due to higher caustic soda and PVC prices as well as improved product demand, partially offset by higher ethylene costs.
Current report
Midstream and marketing segment earnings for the three months ended June 30, 2024 were $116 million, compared to segment losses of $33 million for the three months ended March 31, 2024. Excluding the impact of items affecting comparability, midstream and marketing first quarter results increased due to higher gas marketing income as a result of improved gas transportation spreads from the Permian to the Gulf Coast, and lower equity method investment losses in the low-carbon ventures business.
Removed paragraphs (5)
Previous report
■Further reduce long-term financial leverage; and
Previous report
Net sales decreased for the three months ended March 31, 2024, compared to the three months ended December 31, 2023, primarily due to lower crude oil prices as well and lower domestic crude oil volumes in the oil and gas segment, largely due to a third-party shut-in of production in Eastern GOM, where production resumed in April 2024, and lower realized prices across most products in the chemical segment.
Previous report
Chemical segment earnings remained consistent, with income of $254 million for the three months ended March 31, 2024, compared to income of $250 million for the three months ended December 31, 2023.
Previous report
Midstream and marketing segment losses for the three months ended March 31, 2024 were $33 million, compared to segment earnings of $2 million for the three months ended March 31, 2023. Excluding the impact of items affecting comparability, the decrease in midstream and marketing first quarter results reflected lower winter weather activity in the Rockies compared to prior year, higher losses from equity method investees and higher expenses due to the increase in activities in the low-carbon ventures businesses, partially offset by higher equity investee income from WES.
Reworded paragraphs (30)
Previous wording
Actual outcomes or results may differ from anticipated results, sometimes materially. Forward-looking and other statements regarding Occidental's sustainability efforts and aspirations are not an indication that these statements are necessarily material to investors or require disclosure in Occidental's filings with the SEC. In addition, historical, current and forward-looking sustainability-related statements may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve and assumptions that are subject to change in the future, including future rulemaking. Factors that could cause results to differ from those projected or assumed in any forward-looking statement include, but are not limited to: general economic conditions, including slowdowns and recessions, domestically or internationally; Occidental’s indebtedness and other payment obligations, including the need to generate sufficient cash flows to fund operations; Occidental’s ability to successfully monetize select assets and repay or refinance debt and the impact of changes in Occidental’s credit ratings or future increases in interest rates; assumptions about energy markets; global and local commodity and commodity-futures pricing fluctuations and volatility; supply and demand considerations for, and the prices of, Occidental’s products and services; actions by OPEC and non-OPEC oil producing countries; the scope and duration of global or regional health pandemics or epidemics, and actions taken by government authorities and other third parties in connection therewith; results from operations and competitive conditions; future impairments of Occidental's proved and unproved oil and gas properties or equity investments, or write-downs of productive assets, causing charges to earnings; unexpected changes in costs; inflation, its impact on markets and economic activity and related monetary policy actions by governments in response to inflation; availability of capital resources, levels of capital expenditures and contractual obligations; the regulatory approval environment, including Occidental's ability to timely obtain or maintain permits or other government approvals, including those necessary for drilling and/or development projects; Occidental's ability to successfully complete, or any material delay of, field developments, expansion projects, capital expenditures, efficiency projects, acquisitions or divestitures, including the CrownRock Acquisition; risks associated with acquisitions, mergers and joint ventures, such as difficulties integrating businesses, uncertainty associated with financial projections, projected synergies, restructuring, increased costs and adverse tax consequences; uncertainties and liabilities associated with acquired and divested properties and businesses; uncertainties about the estimated quantities of oil, NGL and natural gas reserves; lower-than-expected production from development projects…
Excerpt shortened here; the source contains the full paragraph.
Current wording
Actual outcomes or results may differ from anticipated results, sometimes materially. Forward-looking and other statements regarding Occidental's sustainability efforts and aspirations are not an indication that these statements are necessarily material to investors or require disclosure in Occidental's filings with the SEC. In addition, historical, current and forward-looking sustainability-related statements may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve and assumptions that are subject to change in the future, including future rulemaking. Factors that could cause results to differ from those projected or assumed in any forward-looking statement include, but are not limited to: general economic conditions, including slowdowns and recessions, domestically or internationally; Occidental’s indebtedness and other payment obligations, including the need to generate sufficient cash flows to fund operations; Occidental’s ability to successfully monetize select assets and repay or refinance debt and the impact of changes in Occidental’s credit ratings or future increases in interest rates; assumptions about energy markets; global and local commodity and commodity-futures pricing fluctuations and volatility; supply and demand considerations for, and the prices of, Occidental’s products and services; actions by OPEC and non-OPEC oil producing countries; results from operations and competitive conditions; future impairments of Occidental's proved and unproved oil and gas properties or equity investments, or write-downs of productive assets, causing charges to earnings; unexpected changes in costs; inflation, its impact on markets and economic activity and related monetary policy actions by governments in response to inflation; availability of capital resources, levels of capital expenditures and contractual obligations; the regulatory approval environment, including Occidental's ability to timely obtain or maintain permits or other government approvals, including those necessary for drilling and/or development projects; Occidental's ability to successfully complete, or any material delay of, field developments, expansion projects, capital expenditures, efficiency projects, acquisitions or divestitures; risks associated with acquisitions, mergers and joint ventures, such as difficulties integrating businesses, uncertainty associated with financial projections, projected synergies, restructuring, increased costs and adverse tax consequences; uncertainties and liabilities associated with acquired and divested properties and businesses; uncertainties about the estimated quantities of oil, NGL and natural gas reserves; lower-than-expected production from development projects or acquisitions; Occidental’s ability to realize the anticipated benefits from prior or future streamlining actions to reduce fixed costs, simplify or improve processes and improve Occidental’s competitive…
Excerpt shortened here; the source contains the full paragraph.
Previous wording
Additional information concerning these and other factors that may cause Occidental’s results of operations and financial position to differ from expectations can be found in Occidental’s other filings with the SEC, including Occidental’s 2023 Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.
Current wording
Additional information concerning these and other factors that may cause Occidental’s results of operations and financial position to differ from expectations can be found in Occidental’s other filings with the SEC, including Occidental’s Annual Report on Form 10-K for the year ended December 31, 2023, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.
Previous wording
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.
Current wording
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 June 30, 2024 was $80.56, comparedto $76.96 for the three months ended March 31, 2024 and $73.83 for the three months ended June 30, 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 U.S. Government'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.
Previous wording
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.
Current wording
During the first six months of 2024, Occidental generated cash flow from operations of $4.4 billion and incurred capital expenditures of $3.6 billion.
Previous wording
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.
Current wording
As of June 30, 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. 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 extending the maturity date to June 30, 2028, and in May 2024, Occidental amended the RCF to increase its borrowing capacity by an additional $150 million to $4.15 billion. No amounts were drawn under the facility as of June 30, 2024.
Previous wording
During the three months ended March 31, 2024, Occidental declared dividends to common shareholders of $197 million or $0.22 per share.
Current wording
During the six months ended June 30, 2024, Occidental declared dividends to common shareholders of $398 million or $0.44 per share.
Previous wording
In connection with the planned CrownRock Acquisition, Occidental has secured a fully-committed $5.3 billion bridge loan facility, a $2.0 billion 364-day term loan, and a $2.7 billion two-year term loan. Prior to or concurrent with the closing of the acquisition, Occidental plans to issue new debt comprised of a combination of the one and two-year term loans and senior unsecured notes. In addition, Occidental plans to refinance a majority of the $1.2 billion of CrownRock’s existing debt assumed in the acquisition. Occidental intends to repay at least $4.5 billion of debt within 12 months of closing the CrownRock Acquisition with proceeds from the divestiture program and excess cash flows.
Current wording
Additionally, Occidental plans to repay $868 million of CrownRock debt due in 2025 in August 2024. Occidental intends to repay at least $4.5 billion of debt within 12 months of closing the CrownRock Acquisition with proceeds from the divestiture program and excess cash flows.
Previous wording
(a)Included in income from equity investments and other in the Consolidated Condensed Statement of Operations.
Current wording
(a)Included amounts from income from equity investments and other in the Consolidated Condensed Statement of Operations.
Previous wording
(b)Included $44 million of financing costs and $12 million of transaction costs related to the CrownRock Acquisition.
Current wording
(b)Included $15 million of financing costs and $14 million of transactions costs for thethree months ended June 30, 2024 and $44 million of financing costs and $12 million of transaction costs for thethree months ended March 31, 2024 related to the CrownRock Acquisition.
Previous wording
Excluding the impact of items affecting comparability, net income for the three months ended March 31, 2024, compared to the three months ended December 31, 2023, reflected lower domestic crude oil volumes and lower crude oil and natural gas commodity prices in the oil and gas segment.
Current wording
Excluding the impact of items affecting comparability, net income for the three months ended June 30, 2024, compared to the three months ended March 31, 2024, reflected higher domestic crude oil volumes and prices, partially offset by lower domestic gas prices in the oil and gas segment, and higher gas marketing income as a result of improved gas transportation spreads from the Permian to the Gulf Coast in the midstream and marketing segment.
Previous wording
Excluding the impact of items affecting comparability, net income for the three months ended March 31, 2024, compared to the three months ended March 31, 2023, reflected lower domestic crude oil volumes and lower natural gas and NGL commodity prices in the oil and gas segment, lower realized prices across most products in the chemical segment, and lower gas marketing margins and higher low-carbon venture costs in the midstream and marketing segment.
Current wording
Excluding the impact of items affecting comparability, net income for the six months ended June 30, 2024, compared to the same period in 2023, reflected lower realized prices across most products in the chemical segment and lower domestic natural gas prices and crude oil volumes in the oil and gas segment, partially offset by higher product demand and favorable energy and ethylene prices in the chemical segment and higher domestic crude oil prices in the oil and gas segment.
Previous wording
The increase in income from discontinued operations, net of taxes for the three months ended March 31, 2024, compared to the three months ended December 31, 2023, resulted from a legal settlement related to the Andes Arbitration. For further information on the Andes Arbitration, see Note 9 - Lawsuits, Claims, Commitments and Contingencies.
Current wording
Income from discontinued operations, net of taxes for the three months ended March 31, 2024 resulted from a legal settlement related to the Andes Arbitration. For further information on the Andes Arbitration, see Note 9 - Lawsuits, Claims, Commitments and Contingencies.
Previous wording
Net sales decreased for the three months ended March 31, 2024, compared to the same period in 2023, primarily due to lower worldwide NGL and domestic natural gas commodity prices in the oil and gas segment and lower domestic oil volumes in the oil and gas segment largely due to a third-party shut-in of production in Eastern GOM and lower realized caustic soda prices in the chemical segment. The decrease was partially offset by higher domestic oil commodity prices in the oil and gas segment and increased demand and lower ethylene and energy costs in the chemical segment.
Current wording
Net sales decreased for the six months ended June 30, 2024, compared to the same period in 2023, primarily due to the expiration of supply contracts in the midstream and marketing segment, which also decreased purchased commodities for the same periods, lower realized prices across most products in the chemical segment and lower domestic natural gas prices and lower domestic oil volumes in the oil and gas segment, due to a third-party shut-in in Eastern Gulf of Mexico that impacted production in 2024, partially offset by higher crude oil prices.
Previous wording
Purchased commodities decreased for the three months ended March 31, 2024, compared to the same period in 2023, due to lower volumes on third-party crude purchases as certain crude supply contracts expired in 2023 in the midstream and marketing segment.
Current wording
Purchased commodities decreased for the six months ended June 30, 2024, compared to the same period in 2023, due to lower volumes on third-party crude purchases as certain crude supply contracts expired in 2023 in the midstream and marketing segment.
Previous wording
Other operating and non-operating expense increased for the three months ended March 31, 2024, compared to the same period in 2023, due tolegal settlement costs and increases in compensation costs.
Current wording
Other operating and non-operating expense increased for the six months ended June 30, 2024, compared to the same period in 2023, due to the $260 million remeasurement of the valuation allowance for the Maxus Liquidating Trust recorded in 2023 and higher legal settlement costs and increases in compensation costs in 2024.
Previous wording
Income from equity investments and other increased for the three months ended March 31, 2024, compared to the same period in 2023, primarily due to gains on sales of assets recognized by WES, an equity method investee.
Current wording
Income from equity investments and other increased for the six months ended June 30, 2024, compared to the same period in 2023, primarily due to gains on sales of assets recognized by WES, an equity method investee.
Previous wording
The increase in income from discontinued operations, net of taxes for the three months ended March 31, 2024, compared to the same period in 2023, resulted from a legal settlement related to the Andes Arbitration. For further information on the Andes Arbitration, see Note 9 - Lawsuits, Claims, Commitments and Contingencies.
Current wording
Income from discontinued operations, net of taxes for the six months ended June 30, 2024 resulted from a legal settlement related to the Andes Arbitration. For further information on the Andes Arbitration, see Note 9 - Lawsuits, Claims, Commitments and Contingencies.
Previous wording
Occidental’s principal businesses consist of three reporting segments: oil and gas, chemical and midstream and marketing. The oil and gas segment explores for, develops and produces oil and condensate, NGL and natural gas. The chemical segment mainly manufactures and markets basic chemicals and vinyls. The midstream and marketing segment purchases, markets, gathers, processes, transports and stores oil (which includes condensate), NGL, natural gas, CO 2 and power. It also optimizes its transportation and storage capacity and invests in entities that conduct similar activities such as WES.
Current wording
Occidental’s principal businesses consist of three reporting segments: oil and gas, chemical and midstream and marketing. The oil and gas segment explores for, develops and produces oil and condensate, NGL and natural gas. The chemical segment is operated by our subsidiary Occidental Chemical Corporation (OxyChem), which mainly manufactures and markets basic chemicals and vinyls. The midstream and marketing segment purchases, markets, gathers, processes, transports and stores oil (which includes condensate), NGL, natural gas, CO 2 and power. It also optimizes its transportation and storage capacity and invests in entities that conduct similar activities such as WES.
Previous wording
(a)Natural gas volumes have been converted to Boe based on energy content of six Mcf of gas to one barrel of oil. Barrels of oil equivalent does not necessarily result in price equivalency.
Current wording
(a)Natural gas volumes have been converted to Boe based on energy content of six Mcf of gas to one barrel of oil. Conversion to Boe does not necessarily result in price equivalency.
Previous wording
Oil and gas segment earnings were $1.2 billion for the three months ended March 31, 2024, compared to $1.6 billion for the three months ended March 31, 2023. Excluding the impact of items affecting comparability, the decrease in oil and gas segment results for the three months ended March 31, 2024, compared to the three months ended March 31, 2023, was primarily due to lower domestic crude oil volumes largely due to a third-party shut-in of production in Eastern GOM, and lower natural gas and NGL commodity prices.
Current wording
Oil and gas segment earnings increased to $1.6 billion for the three months ended June 30, 2024, compared with segment earnings of $1.2 billion for the three months ended March 31, 2024. Excluding the impact of items affecting comparability, the increase in oil and gas segment results was primarily due to higher domestic crude oil volumes and lower depreciation, depletion and amortization rates, as Gulf of Mexico had overcome the extended third-party outage in mid-April, and higher domestic crude oil prices, partially offset by lower domestic gas prices and higher domestic lease operating and transportation expenses.
Previous wording
The decrease in average daily sales volumes of 55 Mboe/d for the three months ended March 31, 2024, compared to the three months ended December 31, 2023, was primarily due to a third-party shut-in of production in Eastern GOM.
Current wording
The increase in average daily sales volumes of 85 Mboe/d for the three months ended June 30, 2024, compared to the three months ended March 31, 2024, was primarily due to resumed production in Eastern Gulf of Mexico after a third party shut-in during the first quarter of 2024.
Previous wording
Oil and gas segment earnings were $1.2 billion for the three months ended March 31, 2024, compared with segment earnings of $1.6 billion for the three months ended December 31, 2023. Excluding the impact of items affecting comparability, the decrease in oil and gas segment results for the three months ended March 31, 2024, compared to the three months ended December 31, 2023, was primarily due to lower domestic crude oil volumes largely due to a third-party shut-in of production in Eastern GOM, where production resumed in April 2024, and lower crude oil and domestic natural gas commodity prices.
Current wording
Oil and gas segment earnings were $2.9 billion for the six months ended June 30, 2024, compared to $2.7 billion for the six months ended June 30, 2023. Excluding the impact of items affecting comparability, the increase in oil and gas segment results was primarily due to higher domestic crude oil prices, partially offset by lower domestic gas prices, lower domestic crude oil volumes, due to the third-party shut-in of production in Eastern Gulf of Mexico, and higher lease operating expenses.
Previous wording
Chemical segment earnings for the three months ended March 31, 2024 were $254 million, compared to $472 million for the three months ended March 31, 2023. The decrease in segment earnings was due primarily to lower caustic soda realized prices, partially offset by improved product demand and lower ethylene and energy costs.
Current wording
Chemical segment earnings for the six months ended June 30, 2024 were $550 million, compared to $908 million for the six months ended June 30, 2023. The decrease in segment earnings was due primarily to lower caustic soda realized prices, partially offset by improved product demand and lower ethylene and energy costs.
Previous wording
Midstream and marketing segment losses for the three months ended March 31, 2024 were $33 million, compared to segment earnings of $182 million for the three months ended December 31, 2023. Excluding the impact of items affecting comparability, midstream and marketing first quarter results increased due to higher crude margins related to the timing impact of crude sales, offset by higher losses from equity method investees and higher expenses due to the increase in activities in the low-carbon ventures businesses.
Current wording
Midstream and marketing segment earnings for the six months ended June 30, 2024 were $83 million, compared to segment losses of $28 million for the six months ended June 30, 2023. Excluding the impact of items affecting comparability, the increase in midstream and marketing results reflected higher equity method investment income from WES and higher crude sales margins due to the timing impact in the marketing business, partially offset by higher losses from equity method investees and higher expenses due to the increase in activities in the low-carbon ventures business.
Previous wording
As of March 31, 2024, Occidental's sources of liquidity included $1.3 billion of cash and cash equivalents, $4.0 billion of borrowing capacity under its RCF, which matures on June 30, 2028, and up to $600 million of available borrowing capacity on its receivables securitization facility which matures in December 2024. These amounts exclude CrownRock Acquisition financing discussed below. There were no borrowings outstanding on Occidental's RCF or receivables securitization facility as of March 31, 2024.
Current wording
As of June 30, 2024, Occidental's sources of liquidity included $1.8 billion of cash and cash equivalents, $4.15 billion of borrowing capacity under its RCF, which matures on June 30, 2028, and up to $600 million of available borrowing capacity on its receivables securitization facility which matures in December 2024. These amounts exclude CrownRock Acquisition financing discussed below. There were no borrowings outstanding on Occidental's RCF or receivables securitization facility as of June 30, 2024.
Previous wording
Operating cash flowwas $2.0 billion for the three months ended March 31, 2024, compared to $2.9 billion for the three months ended March 31, 2023. The decrease in operating cash flow from continuing operations was primarily due to lower domestic sales volumes largely due to a third-party shut-in of production in Eastern GOM, where production resumed in April 2024, and lower natural gas and NGL commodity prices.
Current wording
Operating cash flow was $4.4 billion for the six months ended June 30, 2024, compared to $5.9 billion for the six months ended June 30, 2023. The decrease in operating cash flow from continuing operations was primarily due to an increase in the use of cash from changes in working capital, primarily due to timing of crude sales impacting volumes, and higher prices in the marketing business of the midstream and marketing segment.
Previous wording
Occidental’s net cash used by investing activities was $1.8 billion for the three months ended March 31, 2024, compared to $1.6 billion for the three months ended March 31, 2023. Capital expenditures, of which the majority were for the oil and gas segment, were approximately $1.8 billion for the three months ended March 31, 2024, compared to $1.5 billion for the three months ended March 31, 2023.
Current wording
Occidental’s net cash used by investing activities was $3.7 billion for the six months ended June 30, 2024, compared to $3.5 billion for the six months ended June 30, 2023. Capital expenditures, of which the majority were for the oil and gas segment, were approximately $3.6 billion for the six months ended June 30, 2024, compared to $3.1 billion for the six months ended June 30, 2023. The increase in capital spending for the six months ended June 30, 2024 represented increased activities in the domestic oil and gas segment, the continued construction of STRATOS, Occidental’s first large-scale DAC facility in Ector County, Texas, in the low-carbon business and the continued expansion and conversion activities of the chemical segment’s Battleground chlor-alkali plant to membrane technology.
Previous wording
Occidental’s net cash used by financing activities was $0.3 billion for the three months ended March 31, 2024, compared to $1.1 billion for the three months ended March 31, 2023. Cash used in financing activities for the three months ended March 31, 2024 included cash dividends paid of $332 million. Cash used in financing activities for the three months ended March 31, 2023 included treasury share repurchases of $732 million and cash dividends paid of $320 million.
Current wording
Occidental’s net cash used by financing activities was $289 million for the six months ended June 30, 2024, compared to $2.9 billion for the six months ended June 30, 2023. Cash used in financing activities for the six months ended June 30, 2024 included cash dividends paid of $698 million, offset by proceeds from the issuance of common stock of $504 million, mainly related to the exercise of approximately 22.2 million warrants to purchase common stock with an exercise price of $22 per share of common stock, which yielded approximately $487 million in cash proceeds. Cash used in financing activities for the six months ended June 30, 2023 included treasury share repurchases of $1.2 billion, preferred stock redemptions of $982 million and cash dividends paid of $688 million.
Previous wording
As of March 31, 2024, and through the date of this filing, Occidental was in compliance with all covenants in its financing agreements. Occidental has debt maturities of $1.1 billion in 2024, $1.2 billion in 2025, $1.4 billion in 2026, $0.9 billion in 2027 and $13.3 billion thereafter. Occidental currently expects its cash on hand, operating cash flows and funds available from the RCF and other committed facilities to be sufficient to meet its near-term debt maturities, operating expenditures, capital expenditures and other obligations, excluding the CrownRock Acquisition as discussed below, for the next 12 months from the date of this filing.
Current wording
As of June 30, 2024, and through the date of this filing, Occidental was in compliance with all covenants in its financing agreements. As of June 30, 2024, Occidental has debt maturities of $1.1 billion in 2024, $1.2 billion in 2025, $1.4 billion in 2026, $0.9 billion in 2027 and $13.3 billion thereafter. Occidental currently expects its cash on hand, operating cash flows and funds available from the RCF and other committed facilities to be sufficient to meet its near-term debt maturities, operating expenditures, capital expenditures and other obligations for the next 12 months from the date of this filing. The CrownRock Acquisition was funded with additional debt issuances as described in Current Business Outlook.
Previous wording
Statements in Part I, Item 1 of this Form 10-Q and the Environmental Liabilities and Expenditures section of Management’s Discussion and Analysis of Financial Condition and Results of Operations in the 2023 Form 10-K for additional information regarding Occidental’s environmental liabilities and expenditures.
Current wording
See Note 8 - Environmental Liabilities and Expenditures in the notes to the Consolidated Condensed Financial Statements in Part I, Item 1 of this Form 10-Q and the Environmental Liabilities and Expenditures section of Management’s Discussion and Analysis of Financial Condition and Results of Operations in the 2023 Form 10-K for additional information regarding Occidental’s environmental liabilities and expenditures.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
(a)Refer to the Items Affecting Comparability table which sets forth items affecting Occidental's earnings that vary widely and unpredictably in nature, timing and amount.
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
Purchased commodities decreased for the three months ended March 31, 2024, compared to the three months ended December 31, 2023, due to lower volumes and prices on third-party crude purchases as certain crude supply contracts expired in 2023 in the midstream and marketing segment.
Previous report — wording carried elsewhere
The decrease in average daily sales volumes of 39 Mboe/d for the three months ended March 31, 2024, compared to the three months ended March 31, 2023, was primarily due to a third-party shut-in of production in Eastern GOM.
Previous report — wording carried elsewhere
See Note 8 - Environmental Liabilities and Expenditures in the notes to the Consolidated Condensed Financial