Occidental Petroleum Corporation (NYSE:OXY) Q2 2020 Earnings Conference Call - Final Transcript

Aug 11, 2020 • 11:00 am ET

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Occidental Petroleum Corporation (NYSE:OXY) Q2 2020 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good morning, and welcome to Occidental's Second Quarter 2020 Earnings Conference Call. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions]

I would now like to turn the conference over to Jeff Alvarez, Vice President of Investor Relations. Please go ahead.

Executive
Jeff Alvarez

Thank you, Andrea. Good morning, everyone, and thank you for participating in Occidental Petroleum's Second Quarter 2020 conference call. On the call with us today are Vicki Hollub, President and Chief Executive Officer; and Rob Peterson, Senior Vice President and Chief Financial Officer.

This morning, we will refer to slides available on the Investors section of our website. The presentation includes a cautionary statement on Slide 2 regarding forward-looking statements that will be made on the call this morning.

I will now turn the call over to Vicki. Vicki, please go ahead.

Executive
Vicki Hollub

Thank you, Jeff, and good morning, everyone. On our first quarter earnings call, we outlined the cost reduction measures implemented across our Company to adapt to the immediate crisis of the pandemic and to the ensuing market volatility. I'm pleased to be able to say that compared to a few months ago, our financial position has notably improved as we are currently free cash flow positive and expect to generate significant free cash flow over the remainder of this year, thanks to the relentless efforts of our teams as well as the moderate recovery in commodity prices.

We are determined to build upon this progress ever mindful that COVID-19 remains a threat to the global economy, the demand for the products we produce and to the health and safety of our employees and their families. We continue to manage our employees as carefully as possible through this health threat. To ensure that we continue to be positioned for success through the cycle, we are permanently embedding many of the implemented cost reductions into our repositioned cost structure. This morning, I will provide updates on our base management optimization progress, the pathway to and capital required to sustain our production, and our cash flow priorities. Rob will cover our financial results, current guidance and debt management progress.

Turning to our second quarter results. Our businesses outperformed expectations, despite a slowdown in activity. Production from continuing operations of 1.4 million BOE per day exceeded the midpoint of guidance by 36,000 BOE per day. Our outperformance was primarily driven by our consistent focus on efficiency, increased uptime, and base management. Operability remains high across our oil and gas operations, and we've reduced downtime across the legacy Anadarko acreage faster than originally planned. To maximize the economic benefit from our existing base production, we have increased production by debottlenecking surface infrastructure, mitigating decline, and reducing operating cost.

We are employing remote surveillance processes, utilizing artificial intelligence to further enhance our predictive maintenance schedules, optimizing artificial lift systems, tying in additional wells to centralized gas lift and reducing backpressure throughout our gathering systems and facilities. In the Permian, we also continued to lower our waterhandling expenses by