On November 7, 2023, Occidental Petroleum Corp (OXY, Financial) released its earnings report for the third quarter of 2023, showcasing robust financial and operational results. The company reported a net income attributable to common stockholders of $1.2 billion, translating to $1.20 per diluted share, and an adjusted income of $1.1 billion, or $1.18 per diluted share. These figures represent Occidental's strongest earnings and cash flow from operations for the year thus far.
Financial and Operational Highlights
Occidental's operational performance was a key driver of its financial success in the quarter, generating an operating cash flow of $3.1 billion and cash flow from operations before working capital changes of $3.3 billion. Capital expenditures totaled $1.6 billion, resulting in a substantial free cash flow before working capital of $1.7 billion.
The company's production exceeded the mid-point of its guidance by 34 Mboed, reaching 1,220 Mboed, which has led to an upward revision of the full-year production guidance by 11 Mboed. This production surge was supported by higher domestic crude oil prices and volumes, with realized crude oil prices increasing by approximately 10% from the previous quarter to $80.70 per barrel.
OxyChem and Share Repurchase Program
OxyChem, Occidental's chemical subsidiary, reported a pre-tax income of $373 million, surpassing expectations despite a decrease from the second quarter's income of $436 million, primarily due to lower realized caustic soda prices. Additionally, Occidental continued to execute its share repurchase program, buying back $600 million of common stock, which accounts for approximately 60% of the $3.0 billion repurchase program.
Strategic Asset Sales and Debt Reduction
Occidental also made strategic moves by selling certain non-core assets in the Permian Basin and Western Midstream Partners, LP units, contributing to after-tax gains. These sales, along with the redemption of $342 million of preferred stock, which brings the year-to-date redemptions to over $1.5 billion or 15% of preferred equity, reflect Occidental's commitment to strengthening its balance sheet.
Segment Performance and Future Outlook
The oil and gas segment reported a pre-tax income of $2.0 billion for the third quarter, a significant increase from the $1.1 billion in the second quarter. The midstream and marketing segment, however, reflected a loss of $130 million, compared to a loss of $30 million in the previous quarter, due to higher expenses associated with the increase in activities in the low carbon ventures businesses.
Occidental's President and CEO, Vicki Hollub, commented on the results, stating,
Our teams continued their outstanding performance across all three of our business segments resulting in our strongest earnings and cash flow from operations to date this year."She also highlighted the progress in share repurchases and preferred equity retirement, as well as advancements in low carbon initiatives.
Occidental's financial schedules included in the press release provide detailed insights into the company's performance, including segment results, consolidated financial statements, and oil and gas production volumes and metrics.
Overall, Occidental Petroleum Corp (OXY, Financial) has demonstrated a strong quarter with solid operational performance and strategic financial management, positioning the company for continued success in the energy sector.
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Explore the complete 8-K earnings release (here) from Occidental Petroleum Corp for further details.
