Occidental Petroleum Corporation

and welcome to the Occidental's second quarter 2019 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your touch-tone phone. To withdraw your question, please press star, then two. Please note, this event is being recorded. I would now like to turn the conference over to Jeff Alvarez, Vice President of Investor Relations. Please go ahead.

Thank you, Allison. Good morning, everyone, and thank you for participating in Occidental Petroleum's second quarter 2019 conference call. On the call with us today are Vicki Holub, President and Chief Executive Officer of Cedric Berger, Senior Vice President and Chief Financial Officer, Ken Dillon, President, International Oil and Gas Operations, BJ Hebert, President of OxyChem, and Oscar Brown, Senior Vice President, Strategy, Business Development, and Integrated Supply. In just a moment, I will turn the call over to Vicki. As a reminder, today's conference call contains certain projections and other forward-looking statements within the meaning of the federal securities laws. These statements are subject to risks and uncertainties that may cause actual results to differ materially from those expressed or implied in these statements or more fully described in our cautionary statement regarding forward-looking statements on slide two. Our earnings press release, the investor relations supplemental schedules, and our non-gap-to-gap reconciliations and the conference call presentation slides can be downloaded off our website at www.oxy.com. I will now turn the call over to Vicki. Vicki, please go ahead.

Thank you, Jeff, and good morning, everyone. Before covering our second quarter highlights, I would like to mention an organizational update and congratulate Robert Palmer. Robert was recently appointed to the position of President of Domestic Oil and Gas Operations with operational responsibility for Oxy's domestic onshore oil and gas assets. Robert was most recently Senior Vice President of Technical Support. He's an engineer and has operating experience in the U.S., Peru, Oman, and Russia. He'll play a key role in integrating Anadarko's domestic operations and ensuring that our combined assets deliver the highest returns for our shareholders. As many of you know, we expect to close on our acquisition of Anadarko one week from today. The combination of our two companies will strengthen our long-term strategy and position us to drive profitable growth and return excess cash to our shareholders. We're truly excited about the many benefits that the combination of Oxy and Anadarko will bring to our shareholders, and we're encouraged by the feedback we've received from shareholders regarding the transaction and our discussions over the last few months. We also look forward to providing quarterly updates on synergy capture, deleveraging, and the integration process. I'd like to start this morning with the excellent operational and financial results that our core businesses delivered in the second quarter of 2019, along with some other key accomplishments. The strength of our integrated business model, confidence in our future performance, and commitment to returning cash to our shareholders enabled us to increase our dividend for the 17th consecutive year, and we're committed to continue to increase the dividend. We returned approximately $600 million to shareholders in the quarter, representing 33% of cash flow from operations before working capital. We remain focused not only on returning capital to shareholders, but also on generating high returns on capital. Our ability to achieve best-in-class returns through investing in our high-quality assets continues to be evident as we generated a top-tier annualized cash flow return on capital employed of 22%. Our Permian Resources business broke another Oxy record in the second quarter by bringing our company's best Permian well ever online in the greater Sand Dunes area. Across the Delaware Basin, we delivered 26 of the top 100 wells on a six-month cumulative oil production basis, while drilling only 7% of the total wells. Our enhanced subsurface models enabled us to more precisely design the fracks in those top wells to use much less profit than the other wells in the top 100. Continually delivering the best wells enhances our position as a premier operator of shale in our industry. We're applying a proven targeted scientific approach to each development unit to optimize productivity at the lowest capital intensity to maximize reserves and returns. We have implemented an oil hedging program for 2020 and have hedged 300,000 barrels per day, representing almost 40% of our combined company's oil production. Cedric will cover the details in a few minutes. And we're pleased to welcome Robert Scherer to our board. Bob joined our board on July 10th and brings valuable skills gained from more than three decades of investment experience and a track record of creating significant value for investors with a focus on high quality dividend growth stocks. His commitment to dividends is consistent with our long-term strategy. We're also excited to have announced a new joint venture in the Midland Basin with Echo Patrol, one of our strongest and longest-standing strategic partners. The acquisition of Anadarko increased our development potential in the Delaware Basin by more than 50%, which extends our development horizon in the Delaware by at least another decade, as well as providing significant infrastructure synergies. As we develop our Delaware operations to predominantly drive our production growth over the next few years, this joint venture is an excellent opportunity to bring forward the net present value of our Midland assets without sacrificing any of our current production or cash flow. The joint venture will develop 97,000 net acres of Oxy's Midland Basin properties. Echo Patrol will pay $750 million in cash at closing, plus an additional $750 million of carried capital in exchange for a 49% interest in the new venture. Oxy will own a 51% interest and operate the joint venture. During the carry period, Echo Patrol will pay 75% of Oxy's share of capital expenditures, allowing Oxy to accelerate our development plans in the Midland Basin, where we currently have minimal activity. We will also retain production and cash flow from our existing operations in the Midland. This transaction, which is expected to close in the fourth quarter of 2019, is just one example of the innovative ways through which we can maximize the value of our assets while deleveraging. We are pleased to have delivered another successful quarter, but at the same time, we're never satisfied, and creating shareholder value continues to be our number one priority. As you can see on slide six, we have an unwavering dedication and long track record of returning cash to our shareholders. I'll now hand the call over to Cedric, who will walk you through our financial results and updated guidance.