(Oxy, 8.Nov.2022) — Occidental (NYSE: OXY) announced net income attributable to common stockholders for the third quarter of 2022 of $2.5bn, or $2.52 per diluted share, and adjusted income attributable to common stockholders of $2.5bn, or $2.44 per diluted share. This is compared to net income attributable to common stockholders for the second quarter of 2022 of $3.6bn, or $3.47 per diluted share, and adjusted income attributable to common stockholders of $3.2bn, or $3.16 per diluted share. Third quarter after-tax items affecting comparability were $81mn.
Highlights:
- Repaid $1.3bn of debt during the third quarter, with year-to-date repayments of $9.6bn through 7 November 2022, representing 34% reduction of total outstanding principal
- Repurchased over 28.4 million shares for $1.8bn during the third quarter, with year-to-date repurchases of 41.8 million shares for $2.6bn through 7 November 2022
- Earnings per diluted share of $2.52 and adjusted earnings per diluted share of $2.44
- Cash flow from continuing operations of $4.3bn and cash flow from continuing operations before working capital of $4.7bn
- Capital spending of $1.1bn, resulting in quarterly free cash flow before working capital of $3.6bn
- Exceeded production guidance midpoint by 25 Mboed, with production of 1,180 Mboed
- OxyChem and midstream and marketing segments exceeded guidance with pre-tax earnings of $580mn and $104mn, respectively
- Increased full-year guidance for all three segments on strong third quarter results and improved outlook for OxyChem and midstream and marketing
“The excellent operational performance of our businesses in the third quarter was a key driver of our strong financial results, enabling us to raise our full-year guidance for all of our business segments and generate free cash flow to advance our shareholder returns and deleverage our balance sheet,” said President and Chief Executive Officer Vicki Hollub. “We are close to completing our $3bn share repurchase program and achieved another debt reduction milestone, with the face value of our debt now below $19bn.”
QUARTERLY RESULTS
Oil and Gas
Oil and gas pre-tax income on continuing operations for the third quarter of 2022 was $3.3bn, compared to pre-tax income of $4.1bn for the second quarter of 2022. Excluding items affecting comparability, the decrease in third quarter of 2022 oil and gas income compared to the second quarter of 2022 was due to lower crude oil and natural gas liquids (NGL) prices, partially offset by higher sales volumes across all commodities, higher gas prices and lower DD&A rates. For the third quarter of 2022, average WTI and Brent marker prices were $91.55 per barrel and $97.59 per barrel, respectively. Average worldwide realized crude oil prices decreased by approximately 12 percent from the prior quarter to $94.89 per barrel. Average worldwide realized NGL prices decreased by approximately 16 percent from the prior quarter to $35.22 per barrel. Average domestic realized gas prices increased by approximately 13 percent from the prior quarter to $7.06 per Mcf.
Total average global production of 1,180 thousand of barrels of oil equivalent per day (Mboed) for the third quarter of 2022 exceeded the midpoint of guidance by 25 Mboed. Permian average production came within guidance with 523 Mboed. International average production came within the high-end of guidance with 236 Mboed. The Rockies and Gulf of Mexico both exceeded guidance with average production 270 Mboed and 151 Mboed, respectively.
OxyChem
Chemical pre-tax income of $580mn for the third quarter of 2022 exceeded guidance of $500mn. Compared to the second quarter of 2022 pre-tax income of $800mn, the decrease in the third quarter of 2022 income was driven primarily by weakening polyvinyl chloride (PVC) prices, lower volumes across most product lines and higher energy costs, partially offset by increased caustic soda prices.
Midstream and Marketing
Midstream and marketing pre-tax income was $104mn for the third quarter of 2022, and included net derivative losses of $84mn. WES equity income was $203mn, and included a gain on sale of WES shares of $62mn. Excluding items affecting comparability, third quarter of 2022 midstream and marketing pre-tax income exceeded the high-end of guidance, but decreased compared to the second quarter of 2022, primarily due to lower realized sulfur prices from the Al Hosn Gas plant, partially offset by the timing impact of crude sales in the marketing business.
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