Page 8 - NorthAmOil Week 09 2023

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Occidental increases spending budget,

delays carbon capture project

US OCCIDENTAL Petroleum will hike its capi- In its fourth-quarter financials, Occiden-
tal spending to $6.2bn in 2023 from $4.5bn in tal noted that it had completed a $3.0bn share
2022, including on its direct air capture (DAC) repurchase programme with $562mn of repur-
project. chases in the fourth quarter, bringing total year
The DAC project has, however, now repurchases to 47.7mn shares. The company also
been delayed to 2025, Occidental said on its authorised another $3.0bn share repurchase pro-
fourth-quarter earnings call. gramme and a 38% increase to its dividend.
In 2023, Occidental is plans to spend $4.3- Occidental’s global proven reserves at the end
4.7bn to develop its oil and gas assets. In 2022, of 2022 totalled 3.8bn barrels of oil equivalent
its oil and gas capital expenditures were around (boe), with reserves replacement of 172% and
$3.8bn and primarily focused on the company’s finding and development costs of $6.60 per boe. The first-large
assets in the Permian Basin, Denver-Julesburg In the fourth quarter, Occidental repaid
(DJ) Basin, the US Gulf of Mexico and Oman. $1.1bn of debt – it repaid $10.5bn for the entire scale plant has
The oil producer cited lower energy prices year – and retired $450mn of interest rate swaps.
and higher costs across the board in oil, chem- Its full-year debt repayment represented 37% of been delayed
icals and its new energy business. its total outstanding principal.
Occidental announced net income attrib- Occidental’s investment in lower-carbon pro- from 2024 to
utable to common stockholders for the fourth jects will at least double to $200mn in 2023 and mid-2025.
quarter of 2022 of $1.7bn, or $1.74 per diluted could rise to $600mn.
share, and adjusted income attributable to com- The company is planning to develop sev-
mon stockholders of $1.6bn, or $1.61 per diluted eral lower-carbon projects along the US Gulf
share. This missed analysts’ estimates of $1.80 Coast, using DAC, or point source capture and
per share. sequestration for industrial emissions, or both
Occidental’s fourth-quarter after-tax items of methods. An Occidental subsidiary began con-
$127mn included a non-cash tax benefit adjust- struction in 2022 on a small DAC facility on the
ment of $123mn related to a post-Anadarko Gulf Coast in Texas. It will be able to capture
Basin acquisition reorganisation. 500,000 tonnes per year (tpy) of CO2.
In 2022, Occidental had been the best per- But the first-large scale plant has been delayed
former on the S&P 500, with its stock rising from 2024 to mid-2025, said executives.
119%, reported the Financial Times. A top The US government is offering $3.5bn in
investor in Occidental is Warren Buffett’s Berk- funding to help build four DAC facilities in the
shire Hathaway. But in 2023 so far, the company’s US. Occidental has not commented publicly on
stock was down 66% as of February 27. its plans with regard to the federal funding.™

P8 www. NEWSBASE .com Week 09 02•March•2023