Tuesday, May 10, 2022 4:15 PM ET
Occidental Announces 1st Quarter 2022 Results
- Repaid $3.3 billion of debt, representing 12% of total outstanding principal
Earnings per diluted share of $4.65 and adjusted earnings per diluted share of $2.12
Cash flow from continuing operations of $3.2 billion and cash flow from continuing operations before working capital of $4.2 billion
Capital spending of $858 million, resulting in record quarterly free cash flow before working capital of over $3.3 billion
OxyChem generated record quarterly pre-tax earnings of $671 million; total year pre-tax earnings guidance increased to between $2.1 billion to $2.4 billion
Midstream exceeded quarterly guidance with adjusted pre-tax earnings of $148 million; total year pre-tax earnings guidance increased to between $175 million to $275 million
HOUSTON — May 10, 2022 — Occidental (NYSE:OXY) today announced net income attributable to common stockholders for the first quarter of 2022 of $4.7 billion, or $4.65 per diluted share, and adjusted income attributable to common stockholders of $2.1 billion, or $2.12 per diluted share, compared to net income attributable to common stockholders for the fourth quarter of 2021 of $1.3 billion, or $1.37 per diluted share, and adjusted income attributable to common stockholders of $1.4 billion, or $1.48 per diluted share. First quarter after-tax items affecting comparability of $2.5 billion included a non-cash tax benefit of $2.6 billion related to a post-Anadarko acquisition reorganization of legal entities, $98 million of gains related to the sale of non-core domestic onshore oil and gas leases, partially offset by $49 million of derivative losses and $51 million of Anadarko acquisition-related costs.
“We are pleased with our employees' outstanding performance in the first quarter in meeting our production guidance and, in accordance with our full-year capital plan, preparing our global operations to deliver increased barrels of oil and natural gas to the market for the remainder of the year," said President and Chief Executive Officer Vicki Hollub. "Our OxyChem business delivered its third consecutive record quarterly earnings, as our employees continued to meet the increasing demand for the basic chemicals many take for granted but are vital to ensuring the safety of drinking water, manufacturing of medications and enhancing our quality of life.”
Oil and Gas
Oil and gas pre-tax income on continuing operations for the first quarter of 2022 was $2.9 billion, compared to pre-tax income of $2.1 billion for the fourth quarter of 2021. The first quarter of 2022 oil and gas income included $125 million of pre-tax gains related to the sale of non-core domestic onshore oil and gas leases. Excluding items affecting comparability, first quarter of 2022 oil and gas income improved over the fourth quarter of 2021 due to higher crude oil prices and lower depreciation, depletion and amortization rates, partially offset by lower sales volumes. For the first quarter of 2022, average WTI and Brent marker prices were $94.29 per barrel and $97.36 per barrel, respectively. Average worldwide realized crude oil prices increased by approximately 22 percent from the prior quarter to $91.91 per barrel. Average worldwide realized natural gas liquids (NGL) prices increased by approximately 8 percent from the prior quarter to $39.61 per barrel. Average domestic realized gas prices decreased by approximately 10 percent from the prior quarter to $4.17 per Mcf.
Total average global production of 1,079 thousand of barrels of oil equivalent per day (Mboed) for the first quarter of 2022 was within guidance. Permian and Rockies exceeded or came in at the high end of guidance, with average production of 472 Mboed and 286 Mboed, respectively. Gulf of Mexico average production of 138 Mboed was within guidance. International average production volumes were 183 Mboed.
Chemical pre-tax income of $671 million for the first quarter of 2022 exceeded guidance of $600 million, and represented the third consecutive quarter of record earnings. Compared to the fourth quarter of 2021 pre-tax income of $574 million, the increase in first quarter of 2022 income was driven primarily by higher realized pricing and margins across most product lines along with continued strong product demand.
Midstream and Marketing
Midstream and marketing pre-tax loss for the first quarter of 2022 was $50 million, compared to a pre-tax loss of $15 million for the fourth quarter of 2021. WES equity income for the first quarter of 2022 was $159 million. First quarter of 2022 results included net derivative losses of $198 million. Excluding items affecting comparability, first quarter of 2022 midstream and marketing results increased, compared to the fourth quarter of 2021, primarily due to improved crude margins from the marketing business in the rising crude price environment.
Supplemental Non-GAAP Measures
This press release refers to adjusted income (loss), cash flow from continuing operations before working capital and free cash flow, which are supplemental measures not calculated in accordance with generally accepted accounting principles in the United States (GAAP). These non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as an alternative to the comparable GAAP financial measures. Definitions of adjusted income (loss) and a reconciliation to net income (loss), along with cash flow from continuing operations before working capital and free cash flow and a reconciliation to the comparable GAAP financial measures, are included in the financial schedules of this press release. Occidental’s definition of adjusted income (loss), cash flow from continuing operations before working capital and free cash flow may differ from similarly titled measures provided by other companies in our industry and as a result may not be comparable.
Occidental is an international energy company with assets primarily in the United States, the Middle East and North Africa. We are one of the largest oil producers in the U.S., including a leading producer in the Permian and DJ basins, and offshore Gulf of Mexico. Our midstream and marketing segment provides flow assurance and maximizes the value of our oil and gas. Our chemical subsidiary OxyChem manufactures the building blocks for life-enhancing products. Our Oxy Low Carbon Ventures subsidiary (OLCV) is advancing leading-edge technologies and business solutions that economically grow our business while reducing emissions. We are committed to using our global leadership in carbon management to advance a lower-carbon world. Visit oxy.com for more information.
This press release contains “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to statements about Occidental’s expectations, beliefs, plans or forecasts. All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, and they include, but are not limited to: any projections of earnings, revenue or other financial items or future financial position or sources of financing; any statements of the plans, strategies and objectives of management for future operations or business strategy; any statements regarding future economic conditions or performance; any statements of belief; and any statements of assumptions underlying any of the foregoing. Words such as “estimate,” “project,” “predict,” “will,” “would,” “should,” “could,” “may,” “might,” “anticipate,” “plan,” “intend,” “believe,” “expect,” “aim,” “goal,” “target,” “objective,” "commit," "advance," “likely” or similar expressions that convey the prospective nature of events or outcomes are generally indicative of forward-looking statements. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Unless legally required, Occidental does not undertake any obligation to update, modify or withdraw any forward-looking statements as a result of new information, future events or otherwise.
Although Occidental believes that the expectations reflected in any of its forward-looking statements are reasonable, actual results may differ from anticipated results, sometimes materially. In addition, historical, current and forward-looking sustainability-related statements may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve and assumptions that are subject to change in the future. Factors that could cause results to differ from those projected or assumed in any forward-looking statement include, but are not limited to: the scope and duration of the COVID-19 pandemic and ongoing actions taken by governmental authorities and other third parties in response to the pandemic; Occidental’s indebtedness and other payment obligations, including the need to generate sufficient cash flows to fund operations; Occidental’s ability to successfully monetize select assets and repay or refinance debt and the impact of changes in Occidental’s credit ratings; assumptions about energy markets; global and local commodity and commodity-futures pricing fluctuations; supply and demand considerations for, and the prices of, Occidental’s products and services; actions by the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC oil producing countries; results from operations and competitive conditions; future impairments of our proved and unproved oil and gas properties or equity investments, or write-downs of productive assets, causing charges to earnings; unexpected changes in costs; availability of capital resources, levels of capital expenditures and contractual obligations; the regulatory approval environment, including Occidental's ability to timely obtain or maintain permits or other governmental approvals, including those necessary for drilling and/or development projects; Occidental's ability to successfully complete, or any material delay of, field developments, expansion projects, capital expenditures, efficiency projects, acquisitions or dispositions; risks associated with acquisitions, mergers and joint ventures, such as difficulties integrating businesses, uncertainty associated with financial projections, projected synergies, restructuring, increased costs and adverse tax consequences; uncertainties and liabilities associated with acquired and divested properties and businesses; uncertainties about the estimated quantities of oil, NGL and natural gas reserves; lower-than-expected production from development projects or acquisitions; Occidental’s ability to realize the anticipated benefits from prior or future streamlining actions to reduce fixed costs, simplify or improve processes and improve Occidental’s competitiveness; exploration, drilling and other operational risks; disruptions to, capacity constraints in, or other limitations on the pipeline systems that deliver Occidental’s oil and natural gas and other processing and transportation considerations; general economic conditions, including slowdowns, domestically or internationally, and volatility in the securities, capital or credit markets; inflation; governmental actions, war (including the Russia-Ukraine war) and political conditions and events; legislative or regulatory changes, including changes relating to hydraulic fracturing or other oil and natural gas operations, retroactive royalty or production tax regimes, deep-water and onshore drilling and permitting regulations and environmental regulation (including regulations related to climate change); environmental risks and liability under federal, regional, state, provincial, tribal, local and international environmental laws and regulations (including remedial actions); Occidental's ability to recognize intended benefits from its business strategies and initiatives, such as OLCV or announced greenhouse gas emissions reduction targets or net-zero goals; potential liability resulting from pending or future litigation; disruption or interruption of production or manufacturing or facility damage due to accidents, chemical releases, labor unrest, weather, power outages, natural disasters, cyber-attacks or insurgent activity; the creditworthiness and performance of Occidental's counterparties, including financial institutions, operating partners and other parties; failure of risk management; Occidental’s ability to retain and hire key personnel; supply, transportation and labor constraints; reorganization or restructuring of Occidental’s operations; changes in state, federal or international tax rates; and actions by third parties that are beyond Occidental’s control.
Additional information concerning these and other factors can be found in Occidental’s filings with the U.S. Securities and Exchange Commission, including Occidental’s Annual Report on Form 10-K for the year ended December 31, 2021, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.
View the news release and financial schedules here.