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OXY’s 4Q15 Operational Performance, Management Strategies

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Occidental Petroleum’s 4Q15 operational performance

For 4Q15, Occidental Petroleum (OXY) reported worldwide total production of ~62.6 million boe (barrels of oil equivalent) or 680,000 boe per day. This is within its 4Q15 production guidance range of 62.1 million–63.9 million boe, or 675,000–695,000 boe per day.

Occidental Petroleum’s 4Q15 production is higher by ~10% when compared with its 4Q14 production of ~56.7 million boe, or 616,000 boe per day. Sequentially, OXY’s 4Q15 production is lower by ~1% when compared with 3Q15.

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For 4Q15, OXY reported US production of 321,000 boe per day, which is slightly better than its 4Q15 production guidance range of 310,000–320,000 boe per day. For 4Q15, OXY reported international production of 359,000 boe per day, which is slightly lower than its 4Q15 production guidance range of 365,000–375,000 boe per day.

For 2015, Occidental Petroleum reported worldwide total production of 668,000 boe per day, which is within OXY’s 2015 production guidance range of 660,000–670,000 boe per day, but higher by ~12% when compared with 2014. For 2015, the Permian Basin achieved a year-over-year growth rate of 47%.

Other upstream players

S&P 500 (SPY) upstream companies Pioneer Natural Resources (PXD) and EOG Resources (EOG) are each expecting an ~1% quarter-over-quarter decline in their 4Q15 total production. Noble Energy (NBL) is expected to report ~4% quarter-over-quarter increase in its 4Q15 total production.

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OXY’s capex

For 2015, Occidental Petroleum (OXY) reported total capex of ~$5.6 billion, which is lower than its own capex guidance of ~$5.8 billion. For 2016, OXY expects total capex in a range of $2.8 billion–$3.0 billion, which is ~52% lower when compared with 2015.

OXY’s divestments

In 4Q15, Occidental Petroleum (OXY) divested its less productive assets in the Williston Basin. In 2015, the Williston Basin produced 20,000 boe per day, which was ~3% of OXY’s worldwide total production during the same period. In 4Q15, OXY continued with its exit plans from non-core areas like Iraq so that it can create a more focused domestic oil and gas organization.

In 4Q15, OXY received net cash proceeds of ~$700 million from divestitures. OXY exited 2015 with ~$4.4 billion in cash.

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