Core Viewpoint - Occidental Petroleum's stock has declined below $50, presenting a potential buying opportunity due to various catalysts for growth and improvement in cash flow unrelated to oil prices [1][12]. Group 1: Stock Performance and Investment Interest - Occidental Petroleum's shares have fallen from over $60 to below $50, primarily due to a decrease in oil prices from over $80 to just above $70 per barrel [1]. - Warren Buffett's Berkshire Hathaway owns over 264.9 million shares of Occidental, valued at more than $12.6 billion, making it the sixth-largest position in Berkshire's portfolio [3]. - Berkshire's cost basis for its Occidental shares is in the low $50s, and the company has taken advantage of price dips to increase its holdings [4]. Group 2: Future Cash Flow Improvements - Occidental expects a $1.5 billion improvement in free cash flow over the next few years, driven by non-oil business segments [6]. - The chemical business (OxyChem) is projected to contribute over $450 million in incremental free cash flow by 2026 due to expansion projects [7]. - The midstream business is anticipated to generate an additional $450 million in earnings as legacy contracts expire and capital spending decreases [8]. Group 3: Debt Repayment and Shareholder Value - Occidental's debt repayment strategy is expected to save over $135 million in annual interest expenses by 2026 [8]. - The anticipated increase in free cash flow will enable the company to enhance shareholder value through dividend increases, share repurchases, and further debt repayment [9]. Group 4: Additional Growth Catalysts - There is potential for higher oil prices due to geopolitical conflicts or unexpected supply issues, which could further benefit Occidental [10]. - The company is developing a carbon capture and storage business, with its first direct air capture unit expected to be operational by mid-2026, which could significantly enhance long-term growth prospects [11].

Financial Data and Key Metrics Changes - The first quarter of 2025 saw EBITDA of $46 million, up 2% sequentially and 18% year over year, marking the second-best first quarter EBITDA results in the company's history [8][10] - Total revenue for the first quarter was $599 million, an increase of 4.9% from the previous quarter and 6.4% year over year [10][26] - Gross margins remained resilient at 23.2%, better than expected [11][29] - Net income attributable to DNOW Inc. for the first quarter was $22 million, or $0.20 per fully diluted share [31] Business Line Data and Key Metrics Changes - U.S. revenue totaled $474 million, up $23 million or 5% sequentially, driven by increased midstream demand [17][27] - U.S. Process Solutions contributed approximately 31% of total U.S. revenue, marking the highest revenue dollar contribution yet for this segment [28] - Canadian revenue was $62 million, down $4 million sequentially, while international revenue was $63 million, up $9 million or 17% sequentially [22][28] Market Data and Key Metrics Changes - In the U.S., revenue growth was driven by a full quarter contribution from the Trojan acquisition and increased midstream demand [17] - Internationally, revenue growth was primarily due to increased project activity, with a notable $15 million project not expected to repeat in the second quarter [23][28] - The company reported that approximately 70% of products sold in U.S. operations are sourced domestically, reducing dependence on international sources [13] Company Strategy and Development Direction - The company is focused on diversifying its market mix and investing in core markets while capturing additional revenues from energy evolution opportunities [11] - A small but strategic acquisition in Singapore was completed to enhance the McLean International brand, allowing for increased revenue synergies [12] - The company aims to balance growth with capital returns, having repurchased $16 million in shares year-to-date under a new $160 million share repurchase program [34] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the dynamic tariff situation and its potential impact on margins, stating that they are passing supplier cost increases through as quickly as possible [15][37] - The company expects second quarter growth driven by increased midstream activity, despite anticipated declines in Canadian revenue due to seasonal factors [39][68] - Full year guidance for 2025 remains flat to up in the high single-digit percentage range from 2024 levels, with EBITDA potentially approaching 8% of revenue [40] Other Important Information - The company ended the first quarter with zero debt and a cash position of $219 million, providing significant liquidity for future investments [31][32] - The company is actively pursuing opportunities in adjacent markets, including water, wastewater, and data centers, which are expected to contribute to growth [55][58] Q&A Session Summary Question: How is inflation tracking in the business? - Management noted that while normal inflationary pressures are emerging, tariff impacts have not yet significantly affected gross margins [46][47] Question: Are smaller competitors staying rational in the market? - Management indicated that while competitors are cautious about inventory, there is still intense bidding on projects, maintaining a competitive environment [50][51] Question: What are the opportunities for market share gains? - The company highlighted its global buying power as an advantage over smaller competitors, allowing for better product availability and cost management [53] Question: What is the outlook for geographic growth? - Management reaffirmed expectations for U.S. growth, particularly in midstream, while anticipating flat performance in international markets [66][68] Question: How does the company plan to navigate potential declines in drilling and completion activity? - The focus is on growing the energy transition business and leveraging gains in midstream to offset potential upstream declines [80]

Financial Data and Key Metrics Changes - In 2024, the company generated $11.7 billion in operating cash flow and $4.9 billion in free cash flow before working capital [6] - The company achieved a record year-end proved oil and gas reserves of 4.6 billion BOE, a 15% increase from 2023 [5] - The company paid approximately $800 million in combined dividends and approved a 22% dividend increase in early 2024, followed by an additional 9% increase early this year [6] Business Line Data and Key Metrics Changes - The company reported record US oil production of 571,000 barrels per day from its Permian, Rockies, and Gulf of America assets [5] - Combined production from ongoing operations reached 1.3 million BOE per day, with significant contributions from both US and international assets [5] Market Data and Key Metrics Changes - The company noted that ongoing negotiations and macroeconomic factors, including tariffs and geopolitical events, have impacted commodity prices and created volatility in financial markets [29][32] - The company is focused on managing its operations efficiently in any price environment, with a strategy to strengthen its balance sheet through deleveraging [30] Company Strategy and Development Direction - The company closed a strategic acquisition of Crown Rock, enhancing its access to high-quality unconventional domestic oil assets [4] - The company is advancing major projects, including the commissioning of its first commercial-scale direct air capture facility, Stratos, expected to start in 2025 [4][7] - The company aims to integrate sustainability throughout its operations and has set emission reduction targets [36] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strategic focus and operational performance, positioning it well to deliver long-term value despite near-term pressures from commodity prices [32] - The company is optimistic about the growth prospects for global oil demand beyond 2030, which is seen as positive for its operations [40] Other Important Information - The company achieved its best-ever safety performance record in 2024, reflecting a commitment to safety across all segments [6] - The board is committed to ongoing refreshment of its membership to align with the evolving needs of the company [19] Q&A Session Summary Question: Are there any plans for board refreshment? - The board has committed to ongoing refreshment, with almost half of the independent directors beginning their service within the past five years [19] Question: How does the executive compensation program align with pay for performance? - A substantial portion of named executive officer compensation is performance-based, with significant at-risk pay for executives [24] Question: What is the potential impact of tariffs and the macro environment on Oxy? - The company is focused on what it can control, with ongoing assessments of the impact of tariffs and geopolitical events on operations and financial performance [29] Question: How does Oxy approach diversity and inclusion? - Oxy maintains a culture of inclusion and belonging, which is essential for recruiting and retaining talented employees [33] Question: What are Oxy's sustainability efforts? - Oxy has implemented key emission reduction targets and has sustained zero routine flaring in its US operations [36] Question: What are the growth prospects for the different commodities produced? - Oxy is well-positioned with a diversified portfolio and expects growth in oil and gas operations, particularly in the Permian Basin [40]