Occidental Petroleum Corporation

Good afternoon and welcome to the Occidental's third quarter 2023 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal 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 Neil Backhouse, Vice President of Investor Relations. Please go ahead.

Thank you, Anthony. Good afternoon, everyone, and thank you for participating in Occidental's third quarter 2023 conference call. On the call with us today are Vicki Olive, President and Chief Executive Officer, Richard Jackson, President Operations, U.S. Onshore Resources and Carbon Management, Rob Peterson, Executive Vice President, Essential Chemistry, Ken Dillon, Senior Vice President and President International Oil and Gas Operations, and Mike Avery, President and General Manager of 1.5. This afternoon, we will refer to slides available on the investor section of our website. The presentation includes a cautionary statement on slide two regarding forward-looking statements that will be made on the call this afternoon. We'll also reference a few non-GAAP financial measures today. Reconciliations to the nearest corresponding GAAP measure can be found in the Schedules to our earnings release, and on our website. I'll now turn the call over to Vicki. Vicki, please go ahead.

Thank you, Neil, and good afternoon, everyone. The team and I would like to discuss two key topics today. First, how our portfolio of assets managed by excellent teams once again drove record performance this quarter, which flowed to the bottom line. And second, as we promised, an update on 1.5 and Director Capture, which we expect to play an increasingly important role in our portfolio over time. One important note before we begin. Rob Peterson, Executive VP of Essential Chemistry, will cover our financial results and guidance today. Senior VP and Chief Financial Officer Sunil Matthew is unfortunately tending to a family emergency. We send our thoughts and prayers to Sunil and his family. I'll begin by reviewing our third quarter performance. Our teams again performed exceptionally well with our assets this quarter and delivered strongest earnings and cash flow from operations that we've had to date this year. This positioned us to further advance our shareholder return framework and established a strong trajectory for the fourth quarter. Let's follow the molecules from producing oil and gas to moving and marketing it to where it is most valued to our Oxykit team making the products that the world needs to improve lives, and finally, returning the molecules back underground as we capture emissions and sequester them forever. First, let's review the exceptional results in oil and gas. Strong third quarter operational performance in oil and gas production exceeded the midpoint of our guidance by 34,000 BOE per day, enabling us to increase full-year production guidance by 11,000 BOE per day. our third production guidance increase this year. Production outperformance was driven by strong new well performance in the DJ and Delaware basins, as well as higher uptime due to favorable operating conditions in the Gulf of Mexico. In the Permian and Rockies, our high-quality inventory combined with our team's subsurface expertise continue to drive record cumulative well performance improvements. This exceptional well performance and our activity plans for the remainder of the year drove our full-year production guidance increase. In the third quarter, our Delaware operations team set a record with a continuous pumping time of over 88 hours, doubling the previous and at that time audacious record in the second quarter. Our teams are hyper-focused and diligent. Their advancements are continuing to drive high performance. Additionally, during the third quarter in the DJ Basin, we began deploying a new and innovative natural gas hybrid frac pump with Liberty Energy. We believe that deploying this forward-looking technology, which is an e-frac alternative, will reduce completion costs over time as well as emissions. Our midstream business performed better than expected due to the timing of cargo sales amidst rising commodity prices. And finally, to OxiChem, which exceeded earnings guidance for the quarter, largely due to improved PVC and caustic soda export demand. I can't say it enough. Oxychem provides so much synergy and cash flow generation to our portfolio, and as you'll hear, plays a large role in our direct air capture story. During the third quarter, we repurchased $600 million of common shares and have now completed 60% of our $3 billion share repurchase program. Carry purchases and our dividend enabled additional redemptions of the preferred equity. We have now redeemed over 15% of the preferred equity outstanding. Now I'd like to turn to the second big topic for our call, an update on the progress that our subsidiary 1.5 is experiencing with direct air capture, or DAC. The DAC technology we are using leverages the skills and expertise of our chemicals business and our enhanced oil recovery business. Our team's achievements in DAC will drive benefits to Oxy in three ways. First, it will advance DAC for commercial use. Second, it will increase Oxy's low resilience and generate solid returns to our shareholders over the long term. And third, it will broaden our pathway to carbon neutrality and help others to achieve the same. Some of the team's recent achievements include the agreement we announced last night with BlackRock as a partner in our first DAC plan, Stratos. This is a huge signal to the marketplace that we are attracting capital as well as customers to this exciting technology. We are very happy to have BlackRock as our partner. Our team also reached a memorandum of understanding with our longstanding partner, Adnok, to explore opportunities with DAC and carbon dioxide sequestration hubs in the U.S. and the UAE. And in just eight weeks, we announced our first initiative together. a preliminary engineering study with ADNOC for a megaton-scale DAC facility in the UAE. And shortly after the second quarter earnings call, the U.S. Department of Energy announced that it had selected 1.5 to receive a grant for development of our South Texas DAC hub. And just this morning, OxyOman announced an agreement with OQ Gas Networks, the sole transporter of natural gas in Oman, to jointly study potential carbon capture, utilization, and sequestration projects in the Sultanate. I'll now turn the call over to Richard, who will delve deeper into the momentum and progression of the carbon dioxide removal market and our DAC development plans.