OXY(US:OXY)2025-11-11 19:02Financial Data and Key Metrics Changes - The company reported a profit of $0.65 per diluted share for the third quarter, generating approximately $1.5 billion in free cash flow before working capital adjustments [22][24] - Operating cash flow reached $3.2 billion, exceeding last year's third quarter despite lower WTI prices [8][22] - The principal debt balance was reduced to $20.8 billion after repaying $1.3 billion of debt in the quarter, with a total year-to-date repayment of $3.6 billion [22][28] Business Line Data and Key Metrics Changes - The oil and gas business produced approximately 1.47 million barrels of oil equivalent (BOE) per day, exceeding guidance, with the Permian Basin contributing 800,000 BOE per day, the highest quarterly production in Oxy's history [9][22] - The midstream and marketing segment generated positive adjusted earnings of $153 million, surpassing guidance due to strategic gas marketing and higher sulfur prices [23][24] Market Data and Key Metrics Changes - The company shifted its oil and gas production from 50% domestic to 83% domestic, reducing geopolitical risk [5] - The Gulf of America assets outperformed guidance, benefiting from favorable weather and achieving the highest uptime in operating history [9][23] Company Strategy and Development Direction - The sale of OxyChem is a pivotal step in the company's transformation, aimed at strengthening the balance sheet and enhancing shareholder returns [4][7] - The company plans to focus capital on Permian unconventional assets and enhance oil recovery projects, particularly CO2 EOR projects [7][18] - The company is targeting a $55-$60 WTI plan for 2026, with flexibility to adapt to market conditions [21][62] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to generate free cash flow even in challenging oil price environments, emphasizing operational and cost efficiency [20][21] - The company highlighted a strong portfolio of short-cycle, high-return, and mid-cycle low-decline assets that can deliver strong cash flow [21][67] Other Important Information - The company achieved $2 billion in annualized cost savings across U.S. onshore operations since 2023, driven by operational improvements [12] - The company plans to reallocate up to $400 million to short-cycle high-return projects, primarily in the Permian, while maintaining flexibility in capital allocation [30] Q&A Session Summary Question: Can you clarify the capital spending outlook for next year? - The company expects capital spending to be between $6.3 billion and $6.7 billion, with increased investment in U.S. onshore projects [34][35] Question: What is the status of the Permian resource and drilling inventory? - The company has added $2.5 billion in resources in the Permian, with a focus on unconventional shale improvements and a break-even for annual projects expected to remain below $40 [37][39] Question: Can you provide details on the CO2 injection pilot project? - The pilot project demonstrated a 45% uplift in production, with potential for further increases through continued CO2 injection cycles [42][44] Question: How will the company manage legacy liabilities post-OxyChem sale? - The company indicated that legacy liabilities are minimal and manageable, with annual costs around $20 million [55][56] Question: What are the plans for share repurchases following the OxyChem sale? - The company plans to prioritize debt reduction before considering opportunistic share repurchases, maintaining a cash balance of $3 billion to $4 billion [54][57]