Occidental Petroleum Corporation Q1 FY2026 earnings call

• Vicki Holub mentioned the ongoing challenges in the Middle East, thanked frontline employees and partners. Highlighted Oxy's transformation over 10 years, including portfolio shift to US, doubling production and reserves. Discussed leadership succession plan with Richard Jackson succeeding her as CEO on June 1st. • Richard Jackson emphasized focus on execution and delivery, improving resource base through new well performance and base production. Focus on advanced recovery across four capabilities, cost efficiencies, aiming for $1.2 billion incremental free cash flow in 2026. • Sunil Matthew reviewed financials, noted adjusted earnings of $1.06 per diluted share, reported earnings of $3.13 per diluted share. Mentioned strong free cash flow, deleveraging progress, reducing principal debt to $13.3 billion, near-term goal to reduce to $10 billion. Commented on hedging activities and second quarter performance outlook.

In the first quarter, oil and gas production averaged 1.43 million BOE per day, exceeding guidance. Domestic lease operating expense was $7.85 per BOE, a 5% improvement. Midstream segment outperformed with adjusted earnings ~$400 million above guidance. Production was 1.426 million BOE per day in Q1, driven by strong new oil performance and uptime in domestic portfolio. Midstream benefited from gas marketing optimization and higher sulfur prices, offset by lower sulfur sales. Core focus in Middle East was on safety of people and operations.

• Adjusted full year production guidance midpoint to 1.44 million BOE per day due to Middle East disruptions and EOR portfolio optimization. • Raised midpoint of full-year midstream guidance to $1.1 billion. • Maintaining full year capital guidance range of $5.5 to $5.9 billion with second quarter capital expected higher than first quarter. • Expecting strong performance in second quarter reflecting discipline execution and durable efficiency gains in domestic portfolio, with Middle East operational constraints and EOR portfolio optimization impacting volumes but US onshore execution to partially offset.

• Middle East disruptions impacting international production. • Uncertainties in sulfur sales due to Middle East conflict logistics. • Potential impact of facility issues related to Stratos Phase 2 commissioning, though not expected to impact capital range for the year.

Q: Doug Legate asked about Oxy's strategy under Richard Jackson's tenure, focusing on near-term execution, free cash flow improvement, and people.

A: Richard Jackson responded on near-term execution, free cash flow drivers like cost efficiency, low decline, midstream and LCV improvements, and importance of people.

Q: Doug Legate followed up on net debt reduction and redeeming preferred shares.

A: Sunil Matthew explained deleveraging progress, near-term goal to reduce principal debt to $10 billion, and options including building cash to redeem preferred, reducing debt further, or opportunistic share repurchases.

Q: Nitin Kumar asked about not adopting formulaic return of cash programs.

A: Richard Jackson stated focus on cash flow priorities, flexibility through uncertainties, and aligning returns with dividend growth and reinvestment opportunities.

Q: Arun Jayarana asked about capital allocation post reaching $10 billion debt target.

A: Richard Jackson and Ms. Neal discussed reinvestment conditions, importance of clear macro support, decline rate improvements, and measured reinvestment with clear outcomes.

Q: Arun Jayarana followed up on inflationary pressures and capex range.

A: Richard Jackson and Ken Dillon mentioned new well cost efficiencies, working with service partners, and no impact on capex range from inflationary pressures.

Q: Betty Jeong asked about extracting value from current portfolio and base optimization.

A: Richard Jackson highlighted advanced recovery, operation excellence, workforce efficiency, and partnership in extracting value, and updated on unconventional EOR projects.

Q: Neil Mehta asked Vicki Holub about perspective on next decade in energy sector and Richard Jackson on organic story.

A: Vicki Holub talked about volatility in energy sector, importance of built portfolio to last through cycles, and Richard Jackson emphasized focus on organic development and extracting value from current portfolio.