HOUSTON Occidental Petroleum Corp. President-CEO Vicki Hollub says the Permian Basin is the core of the highest quality, most complementary assets her company has ever had.
“There is a unique blend of short-cycle, high-return shale assets in the Permian and in the Rockies along with lower decline, solid return conventional reservoirs in the Permian, the Gulf of Mexico and our international assets,” Hollub said in Oxy’s second quarter earnings call Thursday. “Sixty percent of our oil and gas production is from shale reservoirs and 40 percent from conventional.”
Hollub said Occidental’s Permian production “delivered higher operability and better-than-expected new well performance particularly in our two new drilling space units in New Mexico.
“Our Delaware Basin completions team shattered our previous record for continuous frac pumping time by nearly 12 hours for a total of 40 hours and 49 minutes,” she said. “Four years ago the same job would have taken about 84 hours.
“Forty hours back then was unthinkable, but our teams have made this a reality.”
Hollub said over 80 percent of Occidental’s production is in the United States and that it operates abroad in only three countries, Oman, Abu Dhabi and Algeria.
She said Oxy’s worldwide full year 2023 production mix will be around 53 percent oil, 22 percent natural gas liquids and 25 percent gas with 70 percent of the gas being in the U.S.
“The low carbon ventures business will help Oxy and others decarbonize at scale in a way that provides incremental value to our shareholders,” she said. “Strong second quarter operational performance exceeded the midpoint of our production guidance by 42,000 barrels per day.”
In the Rocky Mountains, Hollub said, “Our Rockies teams drilled 32 percent faster on a foot-per-day basis than they did in the first quarter.
“The team’s diligent work set several new Oxy records including the company record of drilling over 10,400 feet of lateral in only 24 hours,” she said. “Just 10 years ago it took the industry an average of 15 days to drill 10,400 feet.”
Offshore in the Gulf of Mexico, Hollub said, Oxy safely completed seasonal maintenance activities focused on asset integrity and longevity.
Senior Vice President-Chief Financial Officer Rob Peterson said impairments for undeveloped non-core acreage and deferred tax impacts from the Algeria production sharing contract were partially offset by an environmental remediation settlement.
“Our technical and operational excellence continues to drive out-performance across our oil and gas businesses,” he said. “This enables us to raise our full year production guidance midpoint to just over 1.2 million barrels per day in anticipation of a strong exit to the year.”
Peterson said the first half of 2023 was characterized by strong production in the Gulf of Mexico, the Permian Basin and the Rocky Mountains.
“We have better-anticipated wells and time-to-market momentum year-to-date that we expect to be benefiting from in the second half of the year,” he said. “The third quarter will be the only quarter in the year where our production average is below 1.2 million barrels per day.”
