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Occidental Petroleum Second Quarter 2022 Results

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Occidental reported its second quarter 2022 results.

Results Summary

Oxy announced net income attributable to common stockholders for the second quarter of 2022 of $3.6 billion, or $3.47 per diluted share, and  adjusted income attributable to common stockholders of $3.2 billion, or $3.16 per diluted share. This is compared to 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. Second quarter after-tax items affecting comparability of $315 million included $174 million of derivative gains and $140 million of gains on early debt extinguishment.

President & CEO Vicki Hollub commented: “Oxy completed another quarter with strong operational and financial performance across all of our businesses. We generated $4.2 billion of free cash flow before working capital in the second quarter, our highest quarterly free cash flow to date. We also achieved a significant milestone as we surpassed our near-term debt reduction goal and activated our share repurchase program. Our ongoing efforts to improve the balance sheet remain in place, but we are pleased that our deleveraging progress has reached a stage where our focus can expand to additional cash flow priorities.” 

Quarterly Results by Segment

Oil and Gas

Oil and gas pre-tax income on continuing operations for the second quarter of 2022 was $4.1 billion, compared to pre-tax income of $2.9 billion for the first quarter of 2022. Excluding items affecting comparability, second quarter of 2022 oil and gas income improved over the first quarter of 2022 due to higher crude oil and domestic natural gas prices and higher crude oil and NGL volumes, partially offset by higher lease operating expenses. For the second quarter of 2022, average WTI and Brent marker prices were $108.41 per barrel and $111.69 per barrel, respectively. Average worldwide realized crude oil prices increased by approximately 17 percent from the prior quarter to $107.72 per barrel. Average worldwide realized natural gas liquids (NGL) prices increased by approximately 6 percent from the prior quarter to $42.04 per barrel. Average domestic realized gas prices increased by approximately 50 percent from the prior quarter to $6.25 per Mcf.

Total average global production of 1,147 thousand of barrels of oil equivalent per day (Mboed) for the second quarter of 2022 was within the mid-point of guidance. Permian, Rockies and International came within guidance, with average production of 493 Mboed, 279 Mboed and 228 Mboed, respectively. Gulf of Mexico average production of 147 Mboed exceeded the high-end of guidance. 

Chemical pre-tax income of $800 million for the second quarter of 2022 exceeded guidance of $775 million, and represented the fourth consecutive quarter of record earnings. Compared to the first quarter of 2022 pre-tax income of $671 million, the increase in the second quarter of 2022 income was driven primarily by higher realized pricing and improved demand across most product lines, partially offset by higher energy costs. 

Midstream and marketing pre-tax income was $264 million for the second quarter of 2022, and included net derivative gains of $96 million. WES equity income was $159 million. Excluding items affecting comparability, second quarter of 2022 midstream and marketing pre-tax income came within guidance and increased, compared to the first quarter of 2022, primarily due to higher realized sulfur prices and sales volumes at Al Hosn Gas and higher Dolphin Energy pipeline equity income, resulting from the completion of the first quarter planned maintenance, and partially offset by the timing impact of crude sales.