Occidental progresses debt reduction with $1.2-billion Permian, Rockies divestments
Occidental Petroleum agreed to sell certain upstream assets for a combined $1.2 billion, adding to the debt reduction efforts that resulted in the operator achieving its near-term debt repayment target of $4.5 billion in fourth-quarter 2024.
The newest deals, signed separately with undisclosed buyers in this year’s first quarter, include non-operated Rockies assets and non-core Permian basin assets with respective production impacts of 13,000 boe/d and 2,000 boe/d. The resulting proceeds will be applied to Oxy’s remaining $1 billion 2025 debt maturities.
The near-term deleveraging milestone was reached within 5 months of the operator closing on the acquisition of CrownRock, and 7 months ahead of its goal, said president and chief executive officer Vicki Hollub in a release Feb. 18 (OGJ Online, Dec. 11, 2023).
Deleveraging will continue via free cash flow and divestitures, the company said.
2025 guidance
Occidental’s total 2025 production guidance is 1.385-1.445 MMboe with Permian basin production expected to contribute 754,000-786,000 boe/d.
The company is guiding 2025 net capital expenditures of $7.4-7.6 billion with sustainable oil and gas capex guided to $4.5 billion to maintain 1.42 MMboe/d.
Fourth-quarter 2024 review
In fourth-quarter 2024, Occidental produced 1.463 MMboe/d, exceeding the mid-point of guidance by 13,000 led by Permian basin and Rockies production. Permian production was 771,000 boe/d.
The company had a fourth-quarter 2024 net loss attributable to common stockholders of $297 million, and adjusted income attributable to common stockholders of $792 million.
Fourth quarter of 2024 after-tax items affecting comparability of $1.1 billion mainly comprised of booking a long-term environmental liability increase based on a December federal court ruling regarding a years-long court case over a clean-up in New Jersey. Occidental has appealed the ruling and said it will “seek cost recovery from all potentially responsible parties.” The cash outlay is expected to be spread over 10-20 years, or more, the company said.
Oil and gas pre-tax income for the quarter was $1.2 billion, compared with pre-tax income of $1.2 billion for third-quarter 2024.
Operating cash flow was $3.6 billion and operating cash flow before working capital was $3.1 billion. Capital spending was $1.8 billion and contributions from noncontrolling interest of $54 million resulted in quarterly free cash flow before working capital of $1.4 billion.
