Financial Data and Key Metrics Changes - The company generated an adjusted profit of $0.87 per diluted share and a reported profit of $0.77 per diluted share in Q1 2025, with a significant difference attributed to the mark-to-market impact of derivatives [20][21] - Operating cash flow before working capital reached $3 billion, while free cash flow before working capital was approximately $1.2 billion [5][20] - The company exited Q1 2025 with $2.6 billion of unrestricted cash [20] Business Line Data and Key Metrics Changes - The oil and gas business produced over 1,390,000 BOE per day, aligning with production guidance [5][6] - Domestic oil and gas operating costs were reported at $9.5 per BOE, significantly below initial expectations [6] - OxyChem delivered $215 million on an adjusted basis, overcoming operational challenges [11] Market Data and Key Metrics Changes - The company expects total production to grow from Q1 to the second half of the year, driven by activities in the Middle East and Gulf of America [9][22] - The midstream and marketing business outperformed expectations, benefiting from strong gas marketing optimization [12] Company Strategy and Development Direction - The company is focused on debt reduction, having retired $2.3 billion in debt year-to-date, with a total of $6.8 billion repaid over the past ten months [15][26] - The company is negotiating to extend the Block 53 contract in Oman by 15 years, which could unlock over 800 million gross barrels of additional resources [10][62] - The company aims to maintain operational efficiency and flexibility in response to market volatility, with a focus on preserving value through disciplined capital allocation [19][30] Management's Comments on Operating Environment and Future Outlook - Management highlighted uncertainty around demand, policy, and supply as headwinds for the sector, leading to increased commodity price volatility [15][16] - The company is prepared to scale back activity if commodity prices weaken significantly, emphasizing the importance of maintaining operational efficiencies [17][19] - Management expressed confidence in the company's ability to deliver consistent results and drive long-term shareholder returns despite market challenges [29][30] Other Important Information - The company has made significant advancements in carbon management, including a 25-year carbon offtake agreement for a low carbon ammonia facility [13] - The company expects to see benefits from revised crude transportation contracts, delivering a pretax cash flow uplift of approximately $200 million in 2025 [28] Q&A Session All Questions and Answers Question: CapEx and OpEx reductions for this year - Management discussed a mix of efficiency gains and timeline adjustments, emphasizing that the decisions made will not sacrifice production in the outer years [34][36][97] Question: Free cash flow and capital breakdown - Management provided details on the expected cash flow inflection, highlighting contributions from reduced capital spending and increased operating cash flow [40][44] Question: Thoughts on divestitures - Management indicated that divestiture decisions will be value-based, with options available for both short and long cycle assets [51][60] Question: Opportunities in Oman - Management expressed excitement about the potential in Block 53 and the North Oman discovery, anticipating cash flow improvements [61][66] Question: Low Carbon Ventures business - Management highlighted the strong voluntary compliance market for carbon reduction credits and the importance of partnerships in the low carbon space [74][78] Question: U.S. oil supply outlook - Management noted that U.S. shale basins are plateauing or declining, with the Permian potentially plateauing sooner than expected due to reduced activity levels [81][90]

Financial Data and Key Metrics Changes - In Q1 2025, the company generated an adjusted profit of $0.87 per diluted share and a reported profit of $0.77 per diluted share, with a significant difference attributed to the mark-to-market impact of derivatives [20] - The company generated approximately $1,200,000,000 of free cash flow before working capital and exited the quarter with $2,600,000,000 of unrestricted cash [20] - Year-to-date, the company has retired $2,300,000,000 in debt, contributing to a reduction in annual interest expense by $370,000,000 [14][25] Business Line Data and Key Metrics Changes - The oil and gas business produced just over 1,390,000 BOE per day, meeting production guidance [4] - OxyChem delivered $215,000,000 on an adjusted basis, overcoming operational challenges related to winter weather [10] - The midstream and marketing business significantly outperformed expectations, driven by strong gas marketing optimization [11] Market Data and Key Metrics Changes - The company expects total company production to modestly increase in Q2 2025, driven by various activities including Permian activity levels and the return of Gulf of America production [21] - The company revised its full-year operating cost guidance from $9 to $8.65 per BOE, reflecting a commitment to operational efficiency [23] Company Strategy and Development Direction - The company is focused on strengthening its balance sheet, increasing returns to shareholders, and contributing to U.S. energy leadership through disciplined capital allocation and operational excellence [29] - The company is in advanced negotiations to extend the Block 53 contract in Oman by fifteen years, which is expected to unlock significant additional resources [7][9] - The company is committed to debt reduction and has made significant progress, with all 2025 maturities retired [14][26] Management's Comments on Operating Environment and Future Outlook - Management highlighted uncertainty around demand, policy, and supply as headwinds for the sector, leading to increased commodity price volatility [14] - The company is prepared to scale back activity and manage costs prudently if commodity prices weaken significantly [16] - Management expressed confidence in the operational momentum and financial position, expecting to deliver consistent results and preserve value through commodity cycles [28] Other Important Information - The company signed a landmark 25-year carbon offtake agreement for a low carbon ammonia facility, supporting the transportation and geologic storage of approximately 2,300,000 metric tons of CO2 annually [12] - The company anticipates approximately $1,000,000,000 in incremental pretax free cash flow from non-oil and gas sources in 2026, with further expansion in 2027 [28] Q&A Session Summary Question: Can you elaborate on CapEx and OpEx reductions for this year? - Management indicated that the reductions are a mix of efficiency gains and timeline adjustments, with no immediate impact on production expected [32][34] Question: How much of the free cash flow inflection is from operating cash flow versus capital spending reductions? - Management provided a breakdown of expected cash flow improvements from various segments, including chemicals and midstream [39][45] Question: What are the thoughts on divestitures at this point in the cycle? - Management stated that divestiture decisions are value-based, with options available for both short and long cycle assets [58] Question: Can you unpack the opportunities in Oman? - Management expressed excitement about the Block 53 extension and recent discoveries, indicating potential cash flow improvements [60][63] Question: What are the thoughts on the Low Carbon Ventures business? - Management highlighted the strong voluntary compliance market for carbon reduction credits and the potential for enhanced oil recovery using CO2 [70][72] Question: What are the expectations for U.S. oil supply in the near and long term? - Management noted that U.S. shale basins are plateauing or declining, with the Permian potentially plateauing sooner than expected due to reduced activity levels [77][78]