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Oxy First Quarter 2022 Results

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   |    Tuesday,May 10,2022

Occidental Petroleum reported its first quarter 2022 results.

Highlights:

• 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

CEO Vicki Hollub said: “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. 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.” 

Financial Overview

Oxy 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.

Quarterly Results by Segment

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 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.