Q3 2023 Occidental Petroleum Corp Earnings Call

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Speaker 1: Good afternoon and welcome to the Osa Dental's third quarter of the 2023 earnings conference.

Good afternoon, and welcome to the Occidental third quarter 2023 earnings Conference call. All participants will be in listen only mode should you need assistance. Please signal conference specialist by Christmas, Turkey, followed by zero.

Speaker 1: All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, press star then 1 on your touch tone phone.

After todays presentation, there will be an opportunity to ask questions to ask a question Press Star then one on your Touchtone phone.

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Note. This event is being recorded.

Speaker 1: I would now like to turn the conference over to Neil Backhouse, Vice President of Investor Relations. Please call us.

I would now like to turn it but I would now like to turn the conference over to Neil Backhouse, Vice President of Investor Relations. Please go ahead.

Speaker 2: Thank you, Anthony. Good afternoon everyone and thank you for participating in Occidental's third quarter 2023 conference call. On the call with us today are Vicki Halla, President and Chief Executive Officer, Richard Jackson, President Operations, U.S. Onshore Resources and Carbon Management, Rob Peterson, Executive Vice President, Essential Chemistry.

Thank you Anthony good afternoon, everyone and thank you for participating in Occidental third quarter 2023 conference call on the call with US today are Vicki all our president and Chief Executive Officer, Richard Jackson, President operations U S onshore resources in carbon management, Rob Peterson.

Executive Vice President essential chemistry.

Speaker 2: Ken Dillon, Senior Vice President and President, International Oil and Gas Operations. And Mike Avery, President and General Manager of 1.5.

And Dylan Senior Vice President and President International oil and gas operations, and Mike Avery President and general manager of one five.

Speaker 2: This afternoon we will refer to slides available on the investor section of our website. The presentation includes a cautionary statement on slide two regarding forward-looking statements that will be made on the call this afternoon. I'll also reference a few non-GAAP financial measures today. Reconciliations to the nearest corresponding GAAP measure can be found in the schedules for earnings release and on our website. I'll now turn the call over to Vicki. Vicki, please go ahead.

This afternoon, we will refer to slides available on the investors section of our website. The presentation includes a cautionary statement on slide two regarding forward looking statements that will be made on the call. This afternoon. We'll also reference non-GAAP financial measures today reconciliations to the nearest corresponding GAAP measure can be found in the schedule.

Our earnings release and on our website I'll now turn the call over to Vicki Vicki. Please go ahead.

Speaker 3: Thank you, Neil, and good afternoon everyone. The team and I would like to discuss two key topics today. First, how our portfolio of assets managed by excellent teams once again drove record performances quarter which flowed to the bottom line. And second, as we promised, an update on 1.5 and Director Capture which we expect to play an increasingly important role in our portfolio over time. One important...

Thank you Neil and good afternoon, everyone.

Attainment I would like to discuss two key topics today first how our portfolio of assets managed by excellent teams. Once again drove record performance this quarter, which flowed to the bottom line.

And second as we promised an update on 1.5 and direct air capture which we expect to play an increasingly important role in our portfolio over time.

One important note before we begin.

Speaker 3: Rob Peterson, Executive VP of Essential Chemistry, will cover our financial results and guidance today.

Rob Peterson executive VP of essential chemistry will cover our financial results and guidance today senior.

Speaker 3: Senior VP and Chief Financial Officer Sunil Matthew is unfortunately tending to a family emergency. We send our thoughts and prayers to...

Senior VP and Chief Financial Officer, Sunil Matthew is unfortunately attending to a family emergency.

We send our thoughts and prayers to Sunil and his family.

Speaker 3: I'll begin by reviewing our third quarter performance. Our teams again performed exceptionally well with our assets this quarter and delivered strongest earnings and cash flow from operations that we've had to date this year.

I'll begin by reviewing our third quarter performance. Our teams again performed exceptionally well with our assets this quarter and delivered strongest earnings and cash flow from operations that we've had to date this year.

Speaker 3: This positioned us to further advance our shareholder return framework and established a strong trajectory for the fourth quarter.

This positioned us to further advance our shareholder return framework and established a strong trajectory for the fourth quarter.

That's all of the molecules from producing oil and gas to moving in marketing it to where its most valued to our optical team, making the products that the world needs to improve lives and finally, returning the molecules back underground as we capture emissions and sequester them forever.

Speaker 3: Let's follow the molecules from producing oil and gas to moving and marketing it to where it is most valued to our oxycote team making the products that the world needs to improve lives. And finally, returning the molecules back underground as we capture emissions and sequester them forever.

Speaker 3: First, let's review the exceptional results in Nolangas.

First let's review the exceptional results in oil and gas.

Strong third quarter operational performance in oil and gas production exceeded the midpoint of our guidance by 34000 daily per day, enabling us to increase full year production guidance by 11000 daily per day.

Speaker 3: Strong third quarter operational performance in oil and gas production exceeded the midpoint of our guidance by 34,000 BOE per day, enabling us to increase full year production guidance by 11,000 BOE per day. Our third production guidance increase this year.

Our third production guidance increase this year.

Speaker 3: Production outperformance was driven by strong knee-well performance in the DJ and Delaware basins as well as higher uptime due to favorable operating conditions in the Gulf of Mexico.

Duction outperformance was driven by strong new well performance in the DJ and Delaware basins, as well as higher uptime due to favorable operating conditions in the Gulf of Mexico.

Speaker 3: And the Permian and Rockies are high quality inventory combined with our team's sub-surface expertise, continue to drive record cumulative well performance improvements.

In the Permian and Rockies, our high quality inventory combined with our team's subsurface expertise continued to drive record cumulative well performance improvements.

Speaker 3: This exceptional well performance and our activity plans for the remainder of the year drove our full-year production guidance thing.

This exceptional well performance and our activity plans for the remainder of the year drove our full year production guidance increase.

Speaker 3: In the third quarter, our Delaware operations team set a record with a continuous pumping time of over 88 hours, doubling the previous, and at that time audacious record in the second quarter.

In the third quarter, our Delaware operations team set a record with a continuous pumping time of over 88 hours doubling their previous and at that time audacious record in the second quarter.

Speaker 3: Our teams are hyper-focused and diligent. Their advancements are continuing to drive high performance.

Our teams are hyper focused intelligence there.

Their advancements are continuing to drive high performance.

Speaker 3: Additionally, during a third quarter in the DJ Basin, we began deploying a new and innovative natural gas hybrid frack pump with Liberty Energy.

Additionally, during the third quarter in the D. J basin, we began deploying our new and innovative natural gas hybrid frac pump with Liberty energy.

Speaker 3: We believe that deploying this forward-looking technology, which is an e-FRAC alternative, will reduce completion costs over time as well as emissions.

We believe that deploying this forward looking technology, which is an E frac alternative well reduced completion cost overtime as well as the emissions.

Speaker 3: Our midstream business performed better than expected due to the timing of cargo sales amidst rising commodity prices.

Our midstream business performed better than expected due to the timing of cargo sales amidst rising commodity prices.

Speaker 3: And finally, deoxychim, which exceeded earnings guidance for the quarter, largely due to improved PVC and caustic soda export demand.

And finally, the oxy, Kim which exceeded earnings guidance for the quarter, largely due to improved PVC and caustic soda export demand.

Speaker 3: I can't say it enough, OxyCam provides so much synergy and cashflow generation to our portfolio. And as you'll hear, plays a large role in our Director Capture Story.

I can't say it enough oxy can provide so much synergy and cash flow generation to our portfolio and as you'll hear plays a large role in our direct air capture story.

Speaker 3: During the third quarter, we repurchased $600 million of common shares and have now completed 60% of our $3 billion share repurchase program.

During the third quarter, we repurchased $600 million of common shares and have now completed 60% of our $3 billion share repurchase program.

Share repurchases and our dividend enabled additional redemptions of the preferred equity.

Speaker 3: Gary purchases and our dividend enabled additional redemptions of the preferred equity.

Speaker 3: We have now redeemed over 15% of the preferred equity outstanding.

We have now redeemed over 15% of the preferred equity outstanding.

Now I'd like to turn to the second big topic for our call and update on the progress that our subsidiary one point fathers is experiencing with direct air capture or DAC and <unk>.

Speaker 3: Now I'd like to turn to the second big topic for our call, an update on the progress that our subsidiary 1.5 is experiencing with Direct Air Capture, or DAC. The DAC technology we are using leverages the skills and expertise of our chemical business and our enhanced oil recovery business.

<unk> technology, we are using leverages, the skills and expertise of our chemicals business and our enhanced oil recovery business.

Speaker 3: Our team's achievements in DAC will drive benefits to OXI in three ways.

Our team's achievements and DAC will drive benefits to oxy in three ways.

Speaker 3: First, it will advance stack for commercial use. Second, it will increase oxy's low resilience and generate solid returns to our shareholders over the long term. And third, it will broaden our pathway to carbon neutrality and help others to achieve the same.

First it will advance that for commercial use.

It will increase oxy slow resilience and generate solid returns to our shareholders over the long term.

And third it will broaden our pathway to carbon neutrality and help others to achieve the same.

Some of the teams recent achievements include the agreement, we announced last night with Blackrock as a partner in our first stacked plant Stratus.

Speaker 3: Some of the team's recent achievements include the agreement we announced last night with BlackRock as a partner in our first DAG plant, Stratos. This is a huge signal to the marketplace that we are attracting capital as well as customers to this exciting technology. We are very happy to have BlackRock as our partner.

This is a huge signal to the marketplace that we are attracting capital as well as customers to see this exciting technology.

We were very happy to have Blackrock as our partner.

Speaker 3: Our team also reached a memorandum of understanding with our longstanding partner AdNoc to explore opportunities with DAC and carbon dioxide sequestration hubs in the US and the UAE. And in just eight weeks, we announced our first initiative together, a preliminary engineering study with AdNoc for a mega ton scale DAC facility in the UAE.

Our team also reached a memorandum of understanding with our long standing partner add not to explore opportunities with DAC and carbon dioxide sequestration hubs in the U S and the U a E. And then just eight weeks, we announced our first initiative together and preliminary engineering study would that not for them, but a good time to scale.

That facility and the UAE.

Speaker 3: And shortly after the second quarter earnings call, the U.S. Department of Energy announced that it had selected 1.5 to receive a grant for development of our South Texas DAC hub. And just this morning, Huxio Monde announced an agreement with OQ Gas Networks, the sole transporter of natural gas and Oman, a jointly study potential carbon capture, utilization and sequestration projects in the soil.

And shortly after the second quarter earnings call. The U S Department of energy announced that it had selected 1.5 to receive a grant for development of our South Texas hub.

And just this morning, I see them on announced an agreement with O Q gas networks, the sole transporter of natural gas in Oman, and jointly study potential carbon capture utilization and sequestration projects insult in it.

Speaker 3: I'll now turn the call over to Richard, who will delve deeper into the momentum and progression of the carbon dioxide removal market and our DAC development plan.

I'll now turn the call over to Richard who will delve deeper into the momentum and progression of the carbon dioxide moodle market in our deck development plans.

Speaker 4: Thank you, Vicki. Today, I'm glad to provide a business update focused on direct air capture and the carbon dioxide removal credit market. I also want to reiterate Vicki's comments on how thankful we are to welcome BlackRock as our initial investment partner for Stratos, our first DAC facility.

Thank you Vickie today I'm glad to provide a business update focused on direct air capture and the carbon dioxide removal credit market also want to reiterate vicky's call minutes on how thankful we are to welcome Blackrock as our initial investment partner for Stratos, Our first stack facility. This.

This is the most recent milestone in our development strategy and is aligned with our execution approach, which we will discuss today.

Cross sell stocks, we were determined to solve challenges to both improve our business and provides a central resources for the world.

Our low carbon businesses and expansion of that strategy and its position to be a key value differentiator for oxy in emerging markets.

Speaker 4: I will begin by highlighting several of our P DAC related to COPS.

I will begin by highlighting several of our key DAC related accomplishments.

As we advanced our low carbon business strategy director capture was recognized as both a necessary and valuable technology.

Removing C O two from the atmosphere provides the required solution for businesses across hard to abate emissions sectors.

Speaker 4: Near term, we believe our DAC technology can provide carbon dioxide removal credits or CDRs at a lower cost and at larger scale than other product solutions, especially for businesses in the heavy duty transportation sector that are working to hit the carbonization targets this decade.

Near term, we believe our technology can provide carbon dioxide removal credits or C. D yours at a lower cost and a large larger scale than other product solutions, especially for businesses and the heavy duty transportation sector that are working to hit the carbonization targets. This decade.

Longer term cost effective access to atmospheric C O two to create innovative new fuels or other products can provide a pathway to lower carbon materials and commodities for many industries.

Speaker 4: Longer term, cost effective access to atmospheric CO2 to create innovative new fuels or other products can provide a pathway to lower carbon materials and commodities for many industries.

Speaker 4: From strategy to development, our team has been forward-thinking and deliberate with a roadmap to advance technology, partnerships, and marketing.

From strategy to development, our team has been forward thinking and deliberate with our roadmap to advanced technology partnerships and markets.

Speaker 4: We continue to view technology to commercial product through the lens of capability, scale, and systems thinking.

We continue to view technology to commercial product, we've been wins of capabilities scale and systems thinking in the case of that we believe carbon engineering created a unique and innovative large scale carbon removal process that has a strong fit to our oxy Kim capabilities.

Speaker 4: In the case of DAC, we believe carbon engineering created a unique and innovative, large scale carbon removal process that has a strong fit to our oxychium capability.

Speaker 4: This process uses equipment and materials that are ready to deploy at scale.

This process uses equipment and materials that are ready to deploy at scale.

Speaker 4: Additionally, capturing large volumes of cost-effective CO2 improves OXI's larger integrated oil and gas, CCUS, and low-carbon business businesses for today and tomorrow.

Additionally, capturing large volumes of cost effective C. O. Two improves oxy is larger integrated oil and gas C. C U S and low carbon business businesses for today and tomorrow.

Early team work with carbon engineering led to a more advanced innovation center at CE and the U S development partnership with an exclusive license for oxy.

Speaker 4: Early teamwork with Carbon Engineering led to a more advanced innovation center at

Speaker 4: and a U.S. development partnership with an exclusive license for Oculus.

Speaker 4: The formation of 1.5 followed to allow more partnerships focused on market development for CDR.

The formation of 1.5, followed to allow more partnerships focused on market development for <unk> <unk>.

Speaker 4: Carbon removals reached critical momentum, both their early voluntary market leaders like Airbus, purchasing CDRs, and through new policy support measures like the US Infrastructure, Investment, and Jobs Act.

Removals reached critical momentum both the early voluntary market leaders like Airbus purchasing CD yours.

And third new policy support measures like the U S infrastructure investment and jobs Act.

Speaker 4: That to catalyze early commercial development for technologies including that.

So that the catalyze early commercial development for technologies, including debt.

Speaker 4: This progress was recognized worldwide and enabled new global development and CDR demands scenarios for 1.5 to begin to take shape.

This progress was recognized worldwide and enabled new global development and C. D. Our demand scenarios for 1.5 to begin to take shape.

Speaker 4: Meanwhile, measurable project progress was being made with CE process innovations, the ground breaking for stratoes or dackel on plant, and with key zero emission power and emissions measurement actions that support a durable and a well-defined CDR product.

Meanwhile, Mezz measurable project progress was being made with C. E process innovations the groundbreaking for straddles our doctor of one plant and with key zero emission power in emissions measurement actions to support a durable and a well defined CD or product.

Our <unk> development took another step forward through the partnership with the King Ranch that enables a 30 megaton hub in south, Texas, both to improve future that cost and to provide a more certain supply of C D ours, where an increasing demand.

Speaker 4: Our DAC development took another step forward through the partnership with the King Ranch that enables a 30 megaton hub in South Texas both to improve future DAC costs and to provide a more certain supply of CDRs for an increasing demand.

In 2020 to the U S Department of Energy announced a 3.5 billion dollar regional direct air capture hubs program in August of this year, we were notified that one point Bob was selected by the <unk> for our program Grant to develop our second act in the South Texas hub.

Speaker 4: In 2022, the U.S. Department of Energy announced a $3.5 billion regional direct-air capture hubs program. In August of this year, we were notified that 1.5 was selected by the DOE for a program grant to develop our second deck in this outpix as hub.

Speaker 4: This follows strong policy momentum over the last several years for CCUS through US 45Q tax credit enhancements.

This follows strong policy momentum over the last several years for <unk> U S or U S 45, Q tax credit enhancements, including specific recognition for the role of carbon removals and the recent inflation reduction Act.

Speaker 4: including specific recognition for the role of carbon removals and the recent inflation reduction act.

Speaker 4: Recently we've seen major project momentum with ad-NOC support for the UAE DAC development and especially Black Rock's key investment in Stratos, which bolsters our ability both to build and capitalize our plans.

Recently, we've seen major project momentum with AD Knox support for the UAE, DAC development, and especially Blackhawk's key investment and Stratos, which bolsters our ability both to build and capitalize our plans.

Speaker 4: Further support comes from recent CDR purchase agreements with ANA, a key aviation partner, with Amazon, which purchased 250,000 metric tons of carbon removals, and with TD Bank Group with one of the largest purchases of CDR's by Financial Institutions.

Other support comes from recent C D. Our purchase agreements with a N. A key aviation partner with Amazon, which purchased 250000 metric tons of carbon removals and with TD Bank group with one of the largest purchasers of CD yards by financial institution.

Speaker 4: These further showcase the growing appreciation for the necessity of CDRs from leaders in core industry sectors and the need to scale them in the near term.

These further showcase the growing appreciation for the necessity of CD ours from leaders in core industry sectors, and the need to scale them in the near term.

Speaker 4: Finally, the acquisition of carbon engineering comes at a time where the need to accelerate DAC innovation is critical.

Finally, the acquisition of carbon engineering comes at a time, where the need to accelerate that innovation is critical.

Speaker 4: We're excited to fully support CE as they advance that technology while also rapidly integrating next generation of innovations into our DAC plant bill.

We're excited to fully support CE as they advance that technology, while also rapidly integrating next generation of innovation into that plant builds.

Speaker 4: This helps make sure we maximize value across our partnerships and supports our ability to meet this growing CDR domain.

This helps make sure we maximize value across our partnerships and supports our ability to meet this growing C D. Our demand.

Speaker 4: Our DAC strategy has been visionary and deliberate, aligning investment with advancements with technology, partnerships, policy, and CDR mark.

Our tax strategy has been visionary and deliberate aligning investment with advancements with technology partnerships policy and C. D. Our markets. This approach has enabled oxy to deploy capital responsibly, while establishing leadership in this critical technology and growing <unk> market.

Speaker 4: This approach has enabled Oxy to deploy capital responsibly while establishing leadership in this critical technology and growing CDR market.

Speaker 4: Our accomplishments to date have positioned us as a DAC technology and market...

Our our accomplishments to date have positioned us as a DAC technology a market leader.

Speaker 4: The next phase of our DAC strategy is focused on growth through accelerating cost reduction and expanding partnerships.

Next phase of our DAC strategy is focused on growth.

We're accelerating cost reduction and expanding partnerships.

Speaker 4: With full ownership of Carbon Engineering's technology now in-house, we expect to supplement and support the highly talented Carbon Engineering team to accelerate the innovations that ultimately reduce the cost to capture years earlier than initially anticipated. By pairing the strengths of Carbon Engineering, OxyMajor Projects, and OxyChem, we will continue to reduce costs for the life of the plant.

With full ownership of carbon engineering technology now in house, we expect to supplement and support the highly talented carbon engineering team to accelerate the innovations that ultimately reduce the cost to capture years earlier than initially anticipated by pairing the strengths of carbon engineering oxy major projects.

And oxy Kim we will continue to reduce cost for the life of the plant.

Speaker 4: Early innovations that could reduce the cost of DAC include improvements to air contact or geometry, where we believe we can materially reduce the number of air contactors per facility.

Early innovations that could reduce the cost of DAC include improvements to air Contactor geometry, where we believe we can material materially reduced the number of air contactor as per facility.

Speaker 4: We are also designing air contactor fan motors that consume less power. Additionally, our teams are leveraging OxyChem's electrochemical and chloroalkali expertise to evaluate advanced sorbents and improvements to chemical reaction rates that could increase DAC efficiency.

We are also designing air contact or fan motors that consume less power. Additionally, our teams are leveraging oxy Kim's electrochemical and chlor alkali expertise to evaluate advanced sorbets and improvements to chemical reaction rates that could increase that efficiency.

Oxy has a proven track record of innovation, improving operational efficiencies and large scale project development. The application of these core competencies will be key in the successful deployment of large scale back.

Speaker 4: Oxy has a proven track record of innovation, improving operational efficiencies and large-scale project development. The application of these core competencies will be key in the successful deployment of large-scale data.

Speaker 4: Both the CDR demand and global development opportunities continue to increase.

Both the ctr demand and global development opportunities continue to increase.

Speaker 4: By accelerating the cost reduction of DAC, we aim to provide a low-cost, large-scale supply of CDRs that we believe we can provide as a cost-effective solution to help businesses achieve their climate targets and improve the value proposition for DAC development.

By accelerating the cost reduction of DAC, we aim to provide a low cost large scale supply of CD yards that we believe we can provided a cost effective solution to help businesses achieve their climate targets and improve the value proposition for that developers.

We believe the DAC generated C D ours will play a significant role in corporate emissions reduction strategies and specifically for several hard to abate sectors like aviation and marine.

Speaker 4: We believe that DAC-generated CDRs will play a significant role in corporate emissions reduction strategies and specifically for several hard-to-abate sectors like aviation and marine. And markets-

And markets like the low carbon fuels.

Speaker 4: future regulatory and compliance framework that cap emissions growth are driving companies and certain factors to purchase measurable and durable CDR credits like DAC CDR.

Future regulatory and compliance frameworks that cap emissions growth are driving companies in certain sectors to purchase measurable and durable CVR credits like back CD yours.

Speaker 4: As we reduce the cost of DAC, we expect companies will increase the share of DAC CDRs in their portfolio of solutions.

As we've reduced the cost of that we expect companies will increase the share of <unk> <unk> in their portfolio of solutions.

Speaker 4: We have included three market demand scenarios in our earnings presentation to illustrate how the DAX CDR market may grow rapidly through the end of this decade as the cost to capture is reduced.

We have included three market demand scenarios in our earnings presentation to illustrate how EBITDAX edr market may grow rapidly, but at the end of this decade as the cost of capture has reduced <unk>.

Speaker 4: Reducing costs will enable us to offer CDRs to an expanding market at lower prices.

Reducing costs will enable us to offer <unk> to an expanding market at lower price points.

Speaker 4: In a scenario where the cost of capture remains at $450 per ton, we still expect the market for that generated CDRs to be significantly under supply.

In a scenario where the cost of capture remains at $450 per ton, we still expect the market for that generated C D ours to be significantly under supplied.

Demand for C. D. R credits from the aviation industry is expected to reach an inflection point in 2027, when the international Civil Aviation organization begins requiring airlines to reduce or offset their annual emissions through the carbon offsetting and reduction scheme for international Aviation also known as <unk>.

Speaker 4: The man for CDR credits from the aviation industry is expected to reach an inflection point in 2027 when the International Civil Aviation Organization begins requiring airlines to reduce or offset their annual emissions through the carbon offsetting and reduction scheme for international aviation, also known as Corsia.

Yes.

Speaker 4: Operational improvements by airlines present limited opportunities for emissions.

Operational improvements by Airlines present limited opportunities for emissions reductions, we expected emissions reductions from sustainable aviation fuel or SaaS will also be constrained assaf demand is anticipated to exceed supply once scorsese and other staff mandates come into effect.

Speaker 4: We expect that emissions reductions from sustainable aviation fuel, or SAF, will also be constrained as SAF demand is anticipated to exceed supply once CORCIA and other SAF mandates come into effect.

Speaker 4: While we recognize the importance of SAF and aviation's pathway to decarbonization, SAF remains a partial solution that is currently unable to reduce emissions to true net zero.

We recognize the importance of.

SaaS and aviation's pathway to de Carbonization Saft remains a partial solution that is currently unable to reduce emissions to true net zero.

Speaker 4: Already DAC CDRs can be priced lower than SAF while also having the ability to scale, meet demand, and deliver a true net-zero solution.

Already that <unk> can be priced lower than staff, while also having the ability to scale meet demand and deliver a true net zero solution we.

Speaker 4: We expect DAC CDRs will be an essential cost-effective solution for several hard-to-abate industries to achieve their targets within these compliance markets.

We expect that C. D ours will be in a central cost effective solution for several hardware debate industries to achieve their targets within these compliance markets.

Speaker 4: The pace at which we will develop DAC facilities will be driven by market demand and our ability to reduce costs.

The pace at which we will develop that facilities will be driven by market demand and our ability to reduce costs.

Speaker 4: If the CDR market develops slower than expected, we will have the flexibility to refocus our efforts on R&D with the goal of bringing costs down fast.

If the ctr market develop slower than expected, we will have the flexibility to refocus our efforts on R&D with the goal of bringing costs down faster.

Speaker 4: If the CDR market develops in line with the medium or high cases we've laid out, then we intend to continue executing on our cost down plan and to be positioned to secure development partners for capital.

If the C D. Our market develops in line with the medium or high cases, we've laid out and we intend to continue executing on our cost there and plan and to be positioned to secured development partners for capital.

Speaker 4: This capital flexibility becomes most valuable if the CDR market grows in line with our high-demand forecast.

This capital flexibility becomes most valuable with the ctr market grows in line with our high demand forecast.

Speaker 4: A high demand for DAC CDRs would likely shift their focus towards licensing DAC technology with other developers to increase CDR supply more rapid.

A high demand for that <unk> would likely shift our focus towards licensing that technology with other developers to increase C. Dr supply more rapidly.

Speaker 4: The CE acquisition helps unlock this development optionality as we can integrate our learnings into a DAC technology lifestyle.

The C D. C E acquisition helps unlock this development optionality as we can integrate our learnings into a technology license regional development partners can then support the build out with local knowledge technical and operational resources and capital while oxy can support through a technical heavy but capital light development.

Speaker 4: Regional development partners can then support the build-out with local knowledge, technical and operational resources, and capital, while OXI can support through a technical-heavy but capital-like development approach.

Roche.

Speaker 4: Based on our current plan, we anticipate that the LCV program capital, excluding third-party funding, will be up to $600 million per year through 2020.

Based on our current plan, we anticipate that the LCD program capital, Excluding third party funding will be up to $600 million per year through 2026.

Speaker 4: Moving on to the DAC 1 and 2 developments, we are again excited to announce BlackRock will invest $550 million in Stratos, our first DAC facility. The rate fund managed by its diversified infrastructure business.

Moving on to the DAC one into developments, we're again excited to announce Blackrock will invest $550 million and Stratus, our first stack facility the rate bond managed by its diversified infrastructure business.

Speaker 4: BlackRock's investment demonstrates that DAC is becoming an investable asset class for world-class financial institutions.

Blackrock investment demonstrates the DAC is becoming an investable asset class for world class financial institutions.

Speaker 4: Stratos construction is progressing well and it's approximately 30% complete. Additionally, the ongoing work at the Carbon Engineering Innovation Center has already identified several promising opportunities to lower costs on future debt.

<unk> construction is progressing well and it's approximately 30% complete. Additionally.

Additionally, the ongoing work at the carbon Engineering Innovation Center has already identified several promising opportunities to lower costs on future debt.

Speaker 4: We expect several of these ideas can be implemented into Stratos to help demonstrate the improvements at scale and to be ready for featured DAC bills.

We expect several of these ideas can be implemented into stratus to help demonstrate the improvements at scale and to be ready for future <unk> builds.

Speaker 4: To accommodate these process improvements, we are optimizing the construction schedule for the two process trains. This ensures stratoes remains on schedule to be commercially operational in mid 2025, while also ensuring we are implementing the latest technical advancements earlier than previously planned. This may face some capacity into 2026, but optimizes our development plan and future costs.

These process improvements we are optimizing the construction schedule for the two process trains. This ensures stratos remains on schedule to be commercially operational in mid 2025, while also ensuring we are implementing the latest technical advancements earlier than previously planned this may face some capacity.

Into 2026, but optimize our development plan and future costs.

Speaker 4: Our South Texas DAC Hub has commenced front-end engineering design and stratigraphic well testing is in progress.

Our South Texas DAC hub has commenced front end engineering design and stratigraphic well testing is in progress.

Speaker 4: We are very appreciative of our recent selection for a grant from the U.S. Department of Energy and the meaningful work we are doing through that process.

We are very appreciative of our recent selection for for a grant from the U S Department of energy and the meaningful work, we're doing through that process.

Speaker 4: So the timing and the amount of the DOE grant are not yet known. We look forward to the final agreement and announcements of additional detail.

Though the timing and the amount of the Doa grant are not yet known we look forward to the final agreement and announcements of additional details.

Speaker 4: We have continued to work within a framework of DAC investment principles that will enable us to advance development while delivering returns for our shareholders and value to our customers and partners.

We have continued to work within a framework of DAC investment principles that will enable us to advance development, while delivering returns for our shareholders and value to our customers and partners.

Speaker 4: We were focused on accelerating reductions in the cost of capture, which is expected to increase market demand for CDRs and then turn, attract additional development parts.

We are focused on accelerating reductions in the cost to capture with <unk>, which is expected to increase market demand for CD yours and in turn attract additional development partners. These factors will drive future development pace of DAC, including a final investment decision of that too.

Speaker 4: These factors will drive a future development pace of DAC, including a final investment decision of DAC2. We will also continue to advance collaboration with companies like BlackRock, AdNoc, and Oman's OQ Gas Networks, who share a long-term vision for direct air capture in our broader low-carbon product ecosystem.

We will also continue to advance collaboration with companies like Blackrock add knock and Omans, Oh, Q gas networks, who share our long term vision for direct air capture in our broader low carbon product ecosystem.

Speaker 4: Across it all, we appreciate these partnerships that are enabling this business for Oxy, and we are focused on delivery of the solution that can supply essential lower carbon products for the world. I will now turn the call over to Rob for our financial discussion.

Across it all we appreciate these partnerships that are enabling this business for oxy and we're focused on delivery of the solution that can supply essential lower carbon products for the world I will now I will turn the call over to Rob for a financial discussion.

Thank you Richard.

Speaker 5: We posted an adjusted profit of a $1.18 per diluted share and reported profit of a $1.20 per diluted share.

We posted an adjusted profit of $1 18 per diluted share and our reported profit of $1 20 per diluted share.

Speaker 5: The difference between adjusted and reported earnings is primarily driven by gains on sales of non-core upstream assets, partially offset by derivative losses and a premium paid on preferred equity redemption.

The difference between adjusted and reported earnings was primarily driven by gains on sales of non core upstream assets, partially offset by derivative losses and the premium paid on preferred equity redemptions.

Speaker 5: The rate of the third quarter, strong operational execution, enables to generate over $1.7 billion of free cash flow before working capital. And we can conclude the third quarter with over $600 million to earn a transfer to cash.

During the third quarter strong operational execution enabled us to generate over $1 $7 billion of free cash flow before working capital and we concluded the third quarter with over $600 million of unrestricted cash.

We experienced a modest negative working capital change during the period.

Speaker 5: We experienced a modest negative working capital change during the period, partially driven by the increase in commodity prices.

Driven by the increase in commodity prices.

Speaker 5: In October , we received $341 million in cash. The Environmental Remediation Settlement, we mentioned in the last earnings call.

In October we received $341 million in cash and the environmental remediation settlement, we mentioned on the last earnings call.

As Vicki highlighted each of our domestic assets exceeded the midpoint of third quarter production guidance, including in the Gulf of Mexico, where favorable weather contributed a production exceeding the high end of guidance and a higher than expected company wide orca.

Speaker 5: As Vicky highlighted, each of our domestic assets exceeded the midpoint of third quarter production guidance, including in the Gulf of Mexico, where favorable weather contributed to production exceeding the high end of guidance in a higher than expected company-wide oil cut.

But as an outperformance coupled with a portion of Gulf of Mexico planned maintenance moving into the fourth quarter resulted in better than expected domestic operating expenses of $10 20 per Boe for the third quarter.

Speaker 5: Production outperformance coupled with a portion of Gulf of Mexico plan maintenance moving into the fourth quarter resulted in better than expected domestic operating expenses of $10.20 for BOE for the third quarter.

Speaker 5: Capital spending in its recorder was approximately $1.6 billion representing a slight decrease from the second quarter.

Capital spending in the third quarter was approximately $1 $6 billion.

Representing a slight decrease from the second quarter.

Speaker 5: We further and advanced our general return framework during the third quarter to the repeat purchase of $600 million of common shares, including $175 million, which settled the start of the fourth quarter.

We further advanced our shareholder return framework during the third quarter through the repurchase of $600 million of common shares, including $175 million, which settled to start with the fourth quarter.

Speaker 5: Additionally, we have now redeemed over 15% of the per equity with $342 million of per equity redemptions triggered and redeemed during the third quarter.

Additionally, we have now redeemed over 15% of deferred equity with $342 million reported equity redemptions triggered and redeemed during the third quarter.

Speaker 5: As of November 7th, rolling 12 month common share of distributions total $3.12. Calling below the $4.

As of November seven Rolling 12 month common shareholder distributions totaled $3 12.

Falling below the $4 preferred equity that can trigger.

It is unlikely that cumulative distributions to common shareholders will be above the $4 per share trigger again this year, primarily due to the concentration of our share repurchases in the second half of 2022. However, we remain committed to the per share earnings and cash flow accretion benefits derived from our share repurchase program and we.

Speaker 5: It is unlikely that cumulative distributions, the common shareholders will be above the $4 for share trigger again this year, primarily due to the concentration of share purchases in the second half of 2022. However, we remain committed to the per share earnings and cash flow of creation benefits derived from our share purchase program, and we intend to continue repurchasing shares at a pace that is largely driven by commodity price.

Tend to continue repurchasing shares at a pace that is largely driven by commodity prices.

As Vicki mentioned, we are raising our full year production guidance to outperformance in the third quarter we.

Speaker 5: As Vicki mentioned, we are raising our full year production guidance to outperformance in the third quarter.

Speaker 5: We are guiding to 1.226 million BOE per day in the fourth quarter, our highest quarterly production for the year, despite hailstorms in the Delaware basin that caused power eruptions early in October .

We are guiding to one to $2 6 million Boe per day in the fourth quarter, our highest quarterly production for the year, Despite hailstorms and the Delaware basin that caused power options early in October.

Speaker 5: Property damage from these Permian storms and Global Mexico maintenance are expected to result in a more quarter-domestic operating cost of approximately $10.50 for BUE.

Property damage from these Permian storms and Gulf of Mexico maintenance or expect to result in the fourth quarter domestic operating cost of approximately $10 50 per Boe.

Fourth quarter <unk> guidance reflects typical seasonality as well as the impact of a planned turnaround at our ingleside <unk> and Bcm plant.

Speaker 5: Horse Quarter Ocichim guidance reflects typical seasonality, as well as the impact of a plan turn around at our Engle Fight Coropoli and BCM Plant. This turn around was the first ever of the Essling Tracker, and the first total plan outage in the Engle Fight cove likes in over a decade.

This turnaround was the first ever of the ethylene cracker and the first total plant outage the ingleside complex in over a decade.

We are beginning to see early indications that PVC and caustic soda prices may have bottomed. However, we may not have full clarity on the fundamentals of the globe of upcoming business cycle until early next year as challenges remain including global macroeconomic uncertainty and demand impacts from rising interest rates.

Speaker 5: We are beginning to see early indications that PBC and cost of total prices may have bought them. However, we may not have full clarity on the fundamentals of the growth of the upcoming business cycle until early next year. As challenges remain, including global macroeconomic uncertainty and demand impacts of rising interest rates.

Speaker 5: Outperformance across our domestic businesses resulted in lower than anticipated corporate adjusted effective tax rate during the third quarter, which we expect will rebound to approximately 30% of the fourth quarter as the proportion of international to domestic income increases during the period.

Outperformance across our domestic businesses resulted in lower than anticipated corporate adjusted effective tax rate during the third quarter.

Which we expect will rebound to approximately 30% the fourth quarter as the proportion of international to met to domestic income increases during the period.

Speaker 5: Moving on to capital, third quarter per million capital spending was elevated as a result of program mix and activity optimization.

Moving onto capital third quarter Permian capital spending was elevated as a result of program mix and activity optimization.

Speaker 5: In certain areas, we developed higher working interest products than originally planned as we sought to balance OBO or operated by other production.

In certain areas, we developed higher working interest products than originally planned as we sought to balance OBO operated by other production.

Speaker 5: Company-wide capital spending today and planned spending in the fourth quarter are likely to result in full-year spending at the higher end of our guidance.

Company wide capital spend year to date and planned spending in the fourth quarter are likely to result in full year spending at the higher end of our guidance range.

Speaker 5: Our teams are finalized in our 2024 capital plan, which we look forward to announcing on our next call following board approval.

Our teams are finalizing our 2024 capital plan, which we look forward to announcing our next call following board approval.

Speaker 5: Day of the like to revisit several points from previous calls regarding our expected 2024 capital plan.

Today, I would like to revisit several points from previous calls regarding our expected 2024 capital plan in.

Speaker 5: In the upstream business, we expect similar domestic onshore activity levels to, on average, to 2023. We also anticipate no material change in spending for our international assets.

In the upstream business, we expect similar domestic onshore activity levels to add on average to 2023.

We also anticipate no material change in spending for our international assets.

Speaker 5: Additionally, we expect to run two drill shifts in the Gulf of Mexico next year as part of our mid-cycle investment program.

Additionally, we expect to run two drillships in the Gulf of Mexico next year as part of our mid cycle investment program.

Speaker 5: OCCICAM commits work on the modernization expansion of the battleground plant this year. As construction advances, we anticipate an incremental $100 million of capital spending starting in 2024 compared to 2023 guidance. Incremental spending in the battleground is expected to continue through 2025.

Oxy Kim commence work on the monetization expansion of the battleground plant this year as.

As construction advances, we anticipate an incremental $100 million of capital spending starting in 2024 compared to 2023 guidance incrementals specially in the battleground is expected to continue through 2025.

To summarize the third quarter of 2023, representing a strong operational and financial quarter for oxy.

Speaker 5: To summarize, the third quarter of 2023 represents a strong operational and financial quarter for OxyContin.

Speaker 5: As we are near the conclusion of this year, we are preparing for 2024 with a continued focus on operational excellence and delivering an honor to our show of return framework. We are pleased with the progress of the framework today and in addition to retiring the debt that matureds in 2024, we intend to continue prioritizing sheriffhoods in our use of excess cash flow.

As we are near the conclusion of this year. We are preparing for 2024 with a continued focus on operational excellence and delivering on our shareholder return framework. We are pleased with the progress on the framework to date. In addition to retiring the debt that matures in 2024, we intend to continue prioritizing share repurchases and our use of excess cash flow.

Speaker 5: The timing of when we make see the Ford R4 for equity and decision-trigger again will be determined by the pace of our share of purchase program, which will be largely driven by the macro environment.

The timing of when we may exceed the four of our preferred equity different trigger again will be determined by the pace of our share repurchase program, which will largely be driven by the macro environment.

Speaker 5: I look forward to next quarter's call where we expect to report on completing another strong year for oxy. I will now turn the call back over to Vicki.

I look forward to next quarters call, where we expect to report on completing another strong year for Oxy I will now turn the call back over to Vicki.

Thank you Rob.

Speaker 3: As Richard explained earlier, we expect DAX to play a more important role in our premier and diverse portfolio assets. We believe tremendous additional potential exists there.

As Richard explained earlier, we expect that to play and more important role in our premier and diverse portfolio of assets. They believe tremendous additional potential exists there.

Speaker 3: Joining us today for the Q&A session, as Neil has mentioned earlier, will be Ken Dillham.

Joining us today for the Q&A session as Neil had mentioned earlier will be Ken Dillon.

Speaker 3: who is Senior VP and President of International Oil and Gas Operations, but also manages our major projects.

Senior VP and president of international oil and gas operations, but also manages our major projects.

Speaker 3: part of our business, the major projects group. So he can ask questions with respect to the construction of DAC and my favorite, President General Manager 1.5, as was mentioned earlier, he will answer any questions about the business aspects of how we're running, we'll run the DAC and some of the other projects around the 1.5. So with that, I'll now turn the call over to the...

Pardon me.

All of our business our major projects group. So he can answer your questions with respect to the.

Construction of the <unk>.

Jack.

Mike Avery President and general manager of one 5% as it was mentioned earlier he will answer any questions about the business aspects of how we're running them well.

And we'll run the DAC and.

Some of the other projects around a $1 five so with that I'll now turn the.

Call over.

To the moderator for questions.

Speaker 1: We will now begin the question and answer session. To ask a question, you may press star then when you're touched on the phone. If you're using a speakerphone, you may press star.

We will now begin the question and answer session.

To ask a question you May Press Star then one you touched on phone.

If youre using a speakerphone please pick up your handset before pressing the keys.

To withdraw your question. Please press Star then two.

Speaker 1: Please limit questions to one primary question and one follow-up. If you have further questions, you may re-enter the question.

Please limit questions to one primary question and one follow up.

If you have further questions you may reenter the question queue.

At this time, we will pause momentarily to assemble our roster.

Speaker 1: The first question will come from Nitten, Kumur with Mizuhau.

Our first question will come from Milton Cooper Kumar with Mizuho.

You May now go ahead.

Speaker 6: Great, thanks for taking my question. I want to start with you with the topic du jour in the industry M&A. I know OXI has a deep bench of inventory that you highlight, but obviously with some deals out there recently there's been a focus on consolidation. So I just wanted to get your thoughts on how you see OXI fitting into that trend going forward.

Great. Thanks for taking my question.

Wanted to start with.

Topic de jure and the industry M&A I know Alex he has a deep bench of inventory that you highlight.

But obviously, there's some deals out there recently there has been a focus on consolidation.

Just wanted to get your thoughts on how you see oxy fitting into that trend going forward.

Speaker 3: Well, I'm knitting I do want to reiterate that we were early consolidators in our industry with the Antidarcho acquisition.

L. A midnight they want to reiterate that labor early consolidators and our industry. The Anadarko acquisition and we did that because we saw significant synergies there and as were obvious to us and they were in the acreage was in an area that made it impossible for us to understand the subsurface into gain.

Speaker 3: And we did that because we saw significant synergies there, and those were obvious to us. And they were in, the acreage was in an area that made it possible for us to understand the subsurface and to gain those synergies.

Yes.

Those synergies.

Speaker 3: Now that we've done that, we've more than doubled our production with that acquisition. We've more than achieved the $2 billion of synergies that we had forecast.

Now that we've done that then we more than doubled our production led that acquisition with.

More than achieved a $2 billion of synergies that we had forecast and now it's it's it's considerably strengthened our where we are today. So the good thing is we don't have to do acquisitions.

Speaker 3: And now it's considerably strengthened where we are today. So the good thing is we don't have to do acquisition.

Speaker 3: Therefore, while our BD group keeps up with and is aware of what's happening in our industry, we see we feel no need to have to do anything or be a part of it.

Therefore, while our BD group keeps up with then is aware of what's happening in our industry. Please see lethal no need to have to do anything or be a part of it.

Speaker 6: Great, great, that's very helpful. Vicky, I want to go back. I know the focus is on LCD today, but last quarter you talked about the strong performance in your Permian VELP productivity. There's been some talk around improving technology and really focusing on improving recovery rates. In the basin, you do as much technical work as anybody else.

Great Great that's very helpful.

I want to go back I know the focus is on LTE today, but last quarter you talked about the strong performance in your Permian.

Well productivity.

Theres been some talk around improving technology, and really focusing on improving recovery rates in.

In the basin you do as much technical work as anybody else. So just curious if you have any technologies that you are deploying or seen being deployed that could lead to a step change in recovery factors.

Speaker 6: So just curious if you have any technologies that you are deploying or seeing being deployed, that could lead to a step change in recovery factors.

Sure.

Speaker 3: I think I really feel like we've already had a step change in our recovery factors. And if you go back and look as far back as 2014 and 15, the improvements that we've seen have been dramatic. But most of those improvements have been around understanding the subsurface better.

I think and I really feel like we've already had a step change in our recovery factors and if you go back and look as far back as 2014 and 15 the improvements that we've seen have been dramatic but most of those improvements have been around understanding the subsurface better.

Speaker 3: in being able to better design frac jobs and also our wellbore configuration so that we can not only get the most out of the subsurface from a modeling perspective for the design, but also from an operating standpoint. We have an operations team that is doing a lot on the surface and with artificial lifts.

Being able to better design Frac jobs and also our wealth.

More configuration, so that we can.

Only get the most out of the sub surface from a modeling perspective for the design, but also from an operating standpoint, we had a an operations team that is doing a lot on the surface and with artificial lift to take advantage of AI and other things to ensure that we get the most out of them.

Speaker 3: to take advantage of AI and other things to ensure that we get the most out of the whales from an operating perspective and that we continue to...

Wells from an operating perspective and that we continue to.

Speaker 3: to access that by using artificial intelligence lowering our bottom hole pressures.

To access that by using artificial intelligence lowering our bottom hole pressures and making sure that we're the best that we can be on the subsurface with respect to the efficiencies.

Speaker 3: and making sure that we're the best that we can be on the set surface with respect to the efficiency.

Speaker 3: Now Richard and others would jump at a bit to be able to talk to you about all the technical work we're doing, but I consider that to be proprietary and I really feel like we've disclosed a considerable amount in the past and that's enabled some others to follow some of what we're doing.

Richard and others with chomping, a bit to be able to talk to you about all the technical work, we're doing but I consider that to be proprietary and I really feel likely we've disclosed a considerable amount in the past and that's enabled some others to follow some of what we're doing.

Speaker 3: So to be honest, I'd just rather keep the proprietary stuff to ourselves for now. And from a technology perspective, we have mentioned some things that we're doing internationally to recover more out of our wells in Oman. But I'll just leave it at that. Which really wants to do just a couple of minutes and probably what you're gonna do.

So to be honest I'd, just rather keep the proprietary stuff.

To ourselves for now and.

And then from a technology perspective, we have mentioned some things that we're doing internationally too to recover more out of our wells in Oman.

But but I'll just I'll just leave it at that.

Do you really want to do.

Just a couple of minutes and probably what youre going to say.

Speaker 4: You also have to be careful with the definition of recovery, right? That yeah, that's right. I'll stay clean. The thing I wanted to highlight is just obviously recovery factors.

You also have to be careful with the definition of recovery right.

Yeah, that's right and I'll start I'll state coins.

The thing I wanted to highlight is just obviously recovery factors core to what we're doing we were really proud of.

Speaker 4: core to what we're doing. We're really proud of the

Speaker 4: The slides that we keep in our appendix, which shows year on year the improving performance for our wells, and not over a few days. We look at it on our one-year cumes, and it's not only in the Permian, it's in the Rockies. As Vicki alluded to, we were talking earlier, Ken has some great advancements in the Middle East as well. The other thing I wanted to say was our appraisal success. So highlight this quarter on the Wolf Camp B well that came through the record well. The ability to go engineer and do those technical things for these new benches is core to what we believe is important as we go forward. And so really proud of that appraisal success.

The slides that we keep in our appendix, which shows year on year the improving.

Our performance for our wells and not over a few days you know we look at it on a one year queues and it's not only in the Permian its in the Rockies and as Vicki alluded to we were talking earlier, Ken has some great.

Advancements in the middle East as well the other thing I wanted to say was our appraisal.

Success. So highlight this quarter on the Wolfcamp b well that came through the record well you know the ability to go engineer and do those technical things for these new benches is core to what we believe is important as we go forward and so really proud of that appraisal success.

Speaker 6: The appraisal wells that we drilled this year, we've already replenished the planned drill wells for this year. So, and they're doing it at very low break evens in terms of adding inventory. So I just wanted to add those two things to give recognition to our team and the progress of Mikey. I thought I was gonna have to cut them off there for a second, but he did get it. And I was just hoping that you wouldn't, Vicki. But great job, guys. Thank you. Thank you.

The appraisal wells that we drilled this year, we've already replenished the play and drill wells for this year. So if theyre doing it at very low breakeven in terms of adding inventory. So I just.

I wanted to add those two things to give recognition to our team and the progress we're making I thought I was going to have to cut them off there for a second.

And I was just hoping that you wouldn't tricky, but great job guys. Thank you.

Thank you.

Yes.

Our next question will come from Neil Mehta with Goldman Sachs.

May now go ahead.

Speaker 7: Yeah, thank you so much. It was a really helpful update around LCV. I wanted to take you up, Vicki, on that offer to talk about the construction and how that back plant used

Yes. Thank you so much and it is a really helpful update around LTV I wanted to take your thinking on that offer to talk about construction and and.

And how how that.

That plant is building towards the mid 2025 start.

Speaker 7: start, what are the biggest gating items to get it to completion and how do you feel about that quests

What are the biggest gating items two to get it to completion in and how do you feel about your ability to mitigate those risks.

I will pass that to Ken.

Speaker 2: Good morning. So far I'd say construction is going very well. Warley are performing extremely well in engineering, procurement, and construction. Phase of the project is basically we're moving through the civil phase.

Good morning.

So far I would say construction's doing value well widely are performing extremely well and engineering procurement and construction.

Phase of the project is basically we're moving through this difficult phase.

Speaker 8: where we've got around 550 people at site into the different trades and we'll move up to about 1,200 people at site by the end of Q1.

Where we've got around 550 people at site into the different trades and we will move up to about 1200 people at site by the end of Q1.

Speaker 8: So far we've had no issues of painting labor.

So far we've had no issues obtaining labor.

Speaker 8: on the field in terms of procurement, where meeting construction needs at the moment, and we've committed.

On the field in terms of procurement, we're meeting construction needs at the moment and we are committed.

Speaker 8: around 90% of the material value that we need. So the prices are locked in at the moment. So things are going very well.

And 90% of the.

Material value that we need so prices are locked in at the moment.

So things are going very well I think.

<unk>.

Speaker 8: Warlies, engineering capabilities are such that we saved quite a bit of money in construction. And also we designed the system so that we can replicate that based on the engineering that we're carrying out today. We're building a digital twin and we're using AI going forward.

Engineering capabilities are such that we saved quite a bit of money in construction and also we designed the system. So that we can replicate that based.

Based on the engineering that we're counting today.

We're building a digital twin them, we're using AI going forward.

Speaker 8: On supply chain, I'd like to highlight the visionary vendors. We talked about that early on. We're basically working with companies who have aligned CEOs who are truly supportive and that's made a huge difference for us.

On supply chain I'd like to highlight the visionary vendors, we talked about early on for <unk>.

Working with companies, who have aligned Ceos, who are truly support must made a huge difference for us.

Speaker 8: As you know, the last couple of years has been huge pressure on electrical and instrumentation equipment.

As you know over the last couple of years, there's been huge pressure on the electrical and instrumentation and equipment.

Speaker 8: I'd like to highlight Siemens Industries in the US to really help us out. They've really been committed to this project and what it means.

I'd like to highlight Siemens industries in the U S. It really helped us really being committed to this project and what it means.

Speaker 8: Technique energies are also very supportive all the way to the CEO . And we've received many suggestions from the visionary vendors on how to reduce the cost of their packages going forward, right down to very detailed specifications.

Technip energies are also various support all the way to the CEO.

We have received many suggestions from division of your vendors and how to reduce the cost of their packages going forward right down to very detailed specifications.

I don't know if I can give one example, but one vendor that we visited two assembly lines one for bespoke equipment on one four as standard equipment.

Speaker 8: I don't know if I can give one example, but one vendor that we visited has two assembly lines, one for bespoke equipment and one for our standard equipment. And they do our attention to we changed one thing in our specification. We could save an awful lot of money and their experience is you don't gain any extra reliability for doing that.

Our attention to we changed one thing in our specification, we could say an awful lot of money.

And their experiences you don't gain any extra reliability for doing that.

Speaker 8: Safety performance has been exceptional, so I put 1.2 million minars.

Safety performance has been exceptional site, where like 212 million man hours.

Speaker 8: So overall things are going as well as expected and in terms of materials that are out with the required on site dates.

So overall things are going as well as expected.

In terms of materials that are with.

The required on site dates we don't really have any.

So.

Speaker 8: So, generally working well together with vendors, quarterly.

Really working well.

Together with vendors.

Or Italy.

And fabricators, we have bulk materials all sites, we built piping works we did this as a pilot.

Speaker 8: fabricators. We have built materials off sites. We've built piping racks. We did this as a pilot to reduce

Juice.

Speaker 8: Fabrication labor at site that's worked very well. We'll definitely do that on future decks And that takes you into the mode of can you get the point where you build a deck to it where you can generate piping materials, air contact or frames without doing all the work at site

Fabrication labor at site, that's worked very well, we will definitely do that in the future.

That takes you into the model can you get to supply before you build the deck, where you can generate.

Materials are contractor claims without doing all the work at site.

Speaker 8: So overall project going well and getting a lot of help from vendors.

Overall project is going well and getting a lot of help from vendors.

I'd just like to build on what Ken was saying about the visionary vendors.

Speaker 3: I'd just like to build on what Ken was saying about the visionary vendors. What's been very helpful for us is that as we went through and interviewed the various vendors and selected those that we felt like were more visionary, we also found that these more visionary companies also were very committed to making this work.

It's been very helpful for us is that.

As we went through and interviewed.

The various vendors and selected those that we felt like we're more visionary. We also found that these more visionary companies also we're very committed to making this work.

Speaker 3: Because what they realize and what's important to them is to do something that benefits the world.

I guess, what they realize and what's important to them is to today's something that benefits the world and if you look at the CMT going into the atmosphere. Today, it's about 35 giga tonnes and of that 35, Giga times going into the atmosphere.

Speaker 3: If you look at the CO2 going into the atmosphere today, it's about 35 gigatons and of that 35 gigatons going into the atmosphere.

Speaker 3: eight comes from and that's 23% comes from transportation and that's what Richard was getting at earlier. It's really hard to do anything to decarbonize transportation unless it's a

Eight.

From an Thats 12, 3% comes from transportation and Thats why Richard was getting at earlier, it's really hard to do anything to Decarbonize transportation unless I'd say.

Speaker 3: sustainable aviation fluids, SAF, like he mentioned, which is not completely emission free or using our carbon reduction credit.

Sustainable aviation fluids SaaS like he mentioned.

Which is not completely emission free or using our carbon reduction credits and when you look at eight gig at times that means thousands of these direct air capture facilities must be built and no matter what model you look at that's credible around it.

Speaker 3: And when you look at eight gigatons, that means thousands of these direct-air capture facilities must be built. And no matter what model you look at, that's credible around the globe with respect to climate transition and climate change. There's no model that...

Globe with respect to climate transition and climate change, there's no model that that would show that you can cap global warming to one and a half or two degrees without dealing with getting more.

Speaker 3: would show that you can cap global warming to one and a half or two degrees without dealing with getting more CO2 out of the atmosphere, both for transport and just because there's too much in the atmosphere today.

Out of the atmosphere, both for transport and just because there's too much in the atmosphere today.

Speaker 3: So that makes this a necessary technology and one that's important, as I said, for the world. And it's important to distinguish between the CO2 that goes into the atmosphere from power generation. Power generation can be...

That makes this a necessary technology and one that's important.

As I said for the World and it's important to distinguish between D. C. O two that goes into the atmosphere from our power generation power.

Our generation can be addressed.

Speaker 3: by wind and solar to some degree and ultimately fully if we can, if a low battery or some sort of industrial battery can be designed and built to aid it.

By wind and solar to some degree and ultimately fully if we cannot.

A flow battery or some sort of bar.

Industrial battery can be designed and built to aid it.

Speaker 3: But this director captures not, it's not a replacement for wind or solar. That's where a totally different type of CO2 emissions.

But but.

This direct air capture is not.

Not a replacement replacement for wind or solar that's where I totally different type of all <unk> emission.

Speaker 3: So would add just now, get one nil to your second question.

So with that just now.

Now to your second question.

Yeah. Thanks, Thanks that was great.

Speaker 7: The follow-up is just around 24 capital considerations. We'll get it on the fourth quarter call, I recognize. Can you just talk about the bridge from 23 to 24 and last quarter...

The follow up is just around the 24 capital considerations and we'll get it on the fourth quarter call I recognize but.

Can you just talk about the bridge from 'twenty three to 'twenty four and last.

Last quarter, you annualized it looks like a $6 $4 billion of Capex is it is it crazy to say that's a good starting point.

And any thoughts around that would be great.

Speaker 3: And now it wouldn't be crazy to say that I'll go back to what Rob said in his script. And that is that our upstream oil and gas, especially in the US, will have the same activity level next year that it's had this year.

And now it wouldn't be crazy to say that I'd go back to what Rob said in his script and that is that our upstream oil and gas, especially in the U S will have the same activity level next year than it had this year. In addition to that we will have $100 million for incremental for them.

Speaker 3: In addition to that, we'll have $100 million for incremental for battleground in 2024, and we'll run those two drill ships in the Gulf of Mexico. So I think that gets you to where to that or above as you go in and total all of that, and we'll have more guidance on that, hopefully the first part next year.

In 2024, and we will run those two drillships in the Gulf of Mexico.

So I think that gets you to him to wear to that or above as you go in total all of that and we will have more guidance on that.

Hopefully the first part of next year.

Next question will come from Paul Cheng with Scotiabank you May now go ahead.

Speaker 8: You may now go ahead. Thank you. Good morning, guys. Two questions. On maybe this is for Richard. Have you seen any meaningful in-patient ray in the construction site? And also that the higher interest ray impact your growth.

Thank you.

Good morning, guys.

Two questions on.

Maybe this is for Richard have you seen any meaningful inflation in the construction side and also the higher interest rate.

<unk> Pak.

Your growth plan and a business model that's the first question.

Speaker 4: Sure, I'm going to start. I'm assuming the inflation's oil and gas, but if we need to go more broadly, we can help with that. I'd say a few things, and maybe this goes back a little bit to the prior question as well. We sort of hit the end of this year a couple of things that...

Sure I'm going to start I'm, assuming the inflation's oil and gas, but if we need to go more broadly we can help with that.

Yeah, I'd say, a few things and maybe this goes back a little bit to the prior question as well as we sort of hit the end of this year a couple of things that we.

Speaker 4: We've been doing and seeing success is really optimizing our resources, so specifically rigs and for act. If you'll kind of follow our trajectory over the last two quarters, we're down to rigs and two to three Q and then down another two. And that's really allowed us to optimize, you know, with our contractors, the right rigs, the right crews and seeing some, you know, early returns for that with, you know, quite a bit better foot per day in both the Rocky.

We've been doing and seeing success is really optimizing our resources, specifically rigs and Frac. If you will kind of follow our trajectory over the last two quarters were we're down two rigs and $2 <unk> and then down another two that's really allowed us to optimize.

With our contractors the right rigs the right crews and seeing some.

Early returns for that with.

Quite a bit better foot per day in both the Rockies.

Speaker 4: and the Delaware. I think as we hit the kind of the fourth quarter, we're not ready to project anything into next year, but we are seeing some areas of improvement across our...

And the Delaware I think as we hit the kind of the fourth quarter, we're not ready to project anything into next year, but we are seeing some areas of improvement.

Across our rig rigs also things like all countries oil country tubular goods sand fuel. These things are leading to a little bit of softening, which we hope can play forward, but our focus really has been on that optimization on efficiency. So.

Speaker 9: Rig, rigs, also things like all country, all country tubular goods, sand, fuel. These things are leading to a little bit of softening, which we hope can play forward. But our focus really has been on that optimization on efficiency. So maybe I'll stop to make sure we answer that question. Yeah, and can we also extend not just on the oil and gas, but also...

Maybe I'll stop there and make sure we answered that question and Ken can.

We also expand not just on oil and gas, but also to the low carbon business that are we seeing the inflation rate are very different.

Speaker 9: with a low carbon distance that we see in the inflation rate are very different and it's actually hitting up that's just look like a lot.

And actually hitting up the slope.

Apply a lot of people moving in that direction.

Speaker 9: And also that the higher inflation also want to look at is on the low carbon venture and how that impact on that is.

And also with that.

The higher inflation also want to look at.

The low carbon ventures that how is that impact on that business model and that the mass where I'll ask my second question, which is.

Speaker 9: And that may match well, I'll ask my second question.

Speaker 9: You have signed some deal with financial institute that buying the CDL. Can you share that workout term, is it off take and is it fixed price and if it is fixed price what kind of pricing that we may be referring to.

Do you have signed some deal.

Great.

Financially Institute that bind the CDI.

Can you share that walk out time and yes, that's all.

And yes, it fixed pies and given it is fixed price.

Pricing that we may be referring to them by now thank you.

Speaker 4: Great. I think the way we'll do this, maybe Kingkins, start a little bit on inflation as it relates to DAC and then certainly want to have Mike talk about the market and what we're seeing with off-take. I think that's an important part of our mess.

Great I'm going to I think the way we will do this maybe Ken can start a little bit on inflation as it relates to <unk> and then certainly want to have Mike talk about the market and what we're seeing with off take I think that's an important part of our message.

Speaker 8: Hi, it's Ken. Yeah, we did see increases in the Stratos cost estimate.

Hi, it's Ken.

Yeah, we did see increases in those jobs those cost estimates, mainly mainly related to general industry inflation, so not specifically because of the.

Speaker 8: Men really, menally related to general industry inflation, so not specifically because of a tax.

But we also Inc.

Speaker 8: But we also increase cost as a result of incorporating landings from the CEC. And I would say it was probably 50, 50 in terms of impacts of moderate inflation on DAX. And it's just general industry inflation, steel prices, materials, etc.

Increased cost as a result of incorporating learnings from the CEO seat and I would say it was probably 50 50 in terms of them moderate inflation on that and it's just general industry inflation in steel prices materials et cetera.

Speaker 8: We're now at the point of the project where we're basically locked in pricing. So we feel pretty good and the optimizations were designed to give us improved efficiency for the DAG long term, included it recovery systems, solids handling upgrades, filtration systems upgrades.

We're now at the point of the project, where we're basically locked in pricing. So we feel pretty good and the optimizations were designed to it was improved efficiency for the long term included it recovery systems solids handling upgrades filtration systems updates.

Speaker 8: and electrical upgrades also. So a number of things are not only inflation, I would say, and not definitely not specific to that.

And electrical upgrades also so a number of things so not only inflation I would say are not definitely not specific to that.

Hi, Paul This is Mike every year, so I'll give an update on the sales process and progress that we've made forbes' tradeoffs and so what we're getting here.

Speaker 10: PyPole, this is Mike every year, so I'll give an update on the sales process and progress that we've made for Stratos. And so what we're getting here is a lot of momentum building in the market with a strong sort of pipeline of buyers that are growing now. We attribute this to the market beginning to realize the importance of how a direct air capture is gonna fit within their portfolios.

A lot of momentum building in the market.

With a strong pipeline of buyers that are growing now.

We attribute this to the market beginning to realize the importance of our direct air capture is going to fit within their portfolios.

Speaker 10: I think there's also a growing recognition that, you know, direct-air capture is not sitting out in the future. It's a technology that's ready to go now to...

I think there's also a growing recognition that direct air capture is not sitting out in the future. It's a technology that's ready to go now at commercial scales.

Speaker 10: And that it's actually more affordable than people think when placed next to some of the other alternatives out.

And that it's actually more affordable than people think when placed next to some of the other alternatives out there.

Speaker 10: You know, I think the market's also been moving toward these high integrity solutions as the carbon markets have been maturing

I think the market has also been moving towards these higher integrity solutions as the carbon markets have been maturing.

Speaker 10: And so today we've announced deals with Airbus, Amazon, ANA, TD Bank, NextGen, the Houston Astros, and the Texans. There's a range of terms on those CDR sales. They range from one year to 10 years. They are fixed price agreements.

And so to date, we've announced deals with Airbus Amazon in a TD bank Nextgen the Houston.

Houston Astros and the Texans.

There's a range of terms on those C. D. R sales they range from one year to 10 years.

They are fixed price agreements.

Speaker 10: And so, you know, if we look at the deals that we've announced to date, and we couple that together with the mature negotiations where we have got price volume and term agreed, Stratos net capacity is sold out about 65 to 70% to 2030.

And so if we look at the <unk>.

<unk> that we've announced to date and we couple that together with the mature negotiations where we have got.

This volume and term agreed.

<unk> net capacity is sold out to about 65% to 70% to 2030.

And then there's a strong pipeline behind that.

Speaker 10: And then there's a strong pipeline behind that of earlier stage negotiations that's also growing. That takes us up to about 85% neck as he sold out to 20%.

Earlier stage negotiations.

Also growing.

And that takes us up to about 85% net capacity sold out to 2013.

Our next question will come from Doug Leggate with Bank of America, You May now go ahead.

Speaker 1: Our next question will come from Doug Lagate with Bank of America.

Okay.

Speaker 11: Thank you, good morning everybody. Vicky, I wonder if I could ask you about the business plan or the strategy for that going forward.

Thank you and good morning, everybody.

Vicki I wonder if I could ask you about the business plan or the strategy for <unk> going forward clearly you.

Speaker 11: Given up some working interest now which I think you've signaled before.

Given up some working interest now, which I think you'd signaled before but.

Speaker 11: But I think, I'm no one to misquote Richard here, but I think he said our first partner in Stratos. Where do you see your working interest? How do you see it in DAC2? And where does license revenue fit into the capital efficiency of the DAC strategy? And I've got to follow up, please.

But I think.

Don't want to Misquote Richards here, but I think he said our first partner in Stratos, where do you see your working interest how do you see it in <unk> two.

Weird as license revenue fit into.

The capital efficiency of the dike strategy and I've got a follow up please.

Speaker 3: But we have a lot of confidence in this technology, and a lot of confidence that it sits very well with our strategy on a go-forward basis.

Well, we have a lot of confidence in this technology and a lot of confidence that it fits very well with our strategy on a go forward basis.

Speaker 3: Not only are we going to benefit from the sale of carbon reduction credits as a part of this technology and our strategy.

Not only are we going to benefit from the sale of carbon reduction credits as a part of this.

Technology and our strategy ultimately, we also while while were continuing to provide sequestration and sailing reservoirs for our customers.

Speaker 3: Ultimately, we also, while we're continuing to provide sequestration and sailing reservoirs for our customers.

Speaker 3: We also want to provide CO2 as a product to customers to convert to sustainable aviation fluids. So that's another part of the revenue potential revenue stream. And the other thing that we want to do with the CO2 that we've extract out of the air is use it in our enhanced or recovery reservoirs because that's the truest form of emission-free on a net basis.

We also want to provide C O two as a product to customers to convert to sustainable aviation fluids. So that's another part of the revenue.

The potential revenue stream.

The other thing that we want to do with.

Oh, two that we extract out of the air is used it in our enhanced oil recovery reservoirs, because that's the truest form of emission free on a net basis.

Speaker 3: oil that can then deliver the fuels that maritime and aviation need. Sustainable aviation fluids, as Richard said, is a necessary thing that we have to develop. The world needs it and we're going to support developing it by providing products and then potentially doing it through one of our investments that we've made.

Oil. They can then deliver the appeals that maritime and aviation need.

Sustainable Aviation fluids is as Richard said is a necessary thing that we have to develop the world needs It and we're going to support developing at.

Providing products and then potentially doing it.

Through one of our.

Investments that we've made.

Speaker 3: So that's important, but it's really the thing that's going to change the whole cost.

So that's important but.

But it's really the the thing that's going to change stayed the whole cost curve or the climate transition is for people to ultimately understand that you can use C. O two to generate net zero oil and the way that happens is you inject more C O two into the reservoir and the incremental <unk>.

Speaker 3: for the climate transition is for people to ultimately understand what you can use.

Speaker 3: CO2 to generate net zero oil. And the way that happens is you inject more CO2 into the reservoir than the incremental oil created or produced by that CO2 will emit when used. That's critically important because that generates the net zero oil that then can be converted into jet fuel and their maritime fuel.

Oil created are produced by that Sidoti will admit when used as critically important because that generates a net zero oil that then and they converted jet fuel in their maritime fuels.

Speaker 3: The thing that's so important about that is not only is it emission negative or on an app basis or emission equal, what it does is that

Thing Thats. So important about that is not only is it <unk>.

<unk> negative or on a net basis or.

Emission equal what it does is that it.

Speaker 3: It it in of itself is.

It ended up itself is.

Speaker 3: A lower impact also on the supply chain perspective because you're getting more oil out of reservoirs that exist today. So you're using existing infrastructure, which also reduces the emissions that are associated with the upstream part of the supply chain.

A lower impact also on the supply chain perspective, because you're getting more oil out of reservoirs that exist today, so youre using existing infrastructure, which also reduces the <unk>.

The emissions that are associated with the upstream part of the.

The supply chain than.

Speaker 3: Then the other part of that is that, and using existing infrastructure, that's of lower cost. So that's, it's what the world needs. So that's what the world needs.

And then the other part of that is that and using existing infrastructure. That's a lower cost. So that's what the world needs to use the highest intensity fuel at the lowest cost and the lowest emission level is the way that the world ultimately will need to solve this climate transition.

Speaker 3: Intensity fuel at the lowest cost and the lowest emission level is the way that the world ultimately will need to solve this climate transition. Otherwise the world cannot afford to cap level warming at one and a half or two degrees. So this is very much needed. So when you look at all of those.

And otherwise the world cannot afford to cap global warming at one and a half or two degrees. So this is very much needed and when you look at all of those options. We can the revenue streams that we will be bringing into our business will come from the all of those options they'll have some partners in the beginning is critically important for us to move.

Speaker 3: We can, the revenue streams that we will be bringing into our business will come from all of those options.

Speaker 3: So having partners in the beginning is critically important for us to move further down the road faster to get this technology to a point where we are comfortable that not only we could build it, but we could license the building to others as well. And so once we get to that point, then we're these instead of...

Further down the road faster to get this technology to a point, where we're comfortable that not only we could build it.

License to building to others as well.

And then once we get to that point, then where these are incentives.

Speaker 3: expecting to build 100 of these, then we can start to get into the hundreds of them, and potentially the thousands that are going to be needed to be built. But we would benefit from all of that. And sometimes we get to...

Expecting to build 100 of these then we can start to get into the hundreds of them and then potentially the thousands that are going to be needed to be built but we would benefit from all of that and it's.

Times, we get because.

Speaker 3: We get criticized for the fact that we're building a business. But without making this commercial, it's not sustainable. If it's not sustainable, then the world has no other better solution. And again, the world cannot afford the plans as they've been laid out by the UN and others right now.

When you get criticized for the fact that we're building a business.

Making this commercial it's not sustainable and if it's not sustainable and the world has no other better solution and again the world cannot afford the plans as they have been laid out by the U N than others right now and so we think we have the best solution to move forward the best on a business model to make it happen.

Speaker 3: And so we think we have the best solution to move forward, the best kind of business models to make it happen. And it will create significant value for our shareholders. We're just going to build the partnerships to make this happen at a pace that's much faster than what we could do just ourselves.

And and it'll create significant value for our shareholders.

We're just going to build the partnerships to make this happen at a pace that's that's.

Much faster than what we could do just ourselves.

Speaker 11: Yeah, Vicki just to be to clarify. So these obviously very ambitious growth plans going forward. It doesn't require that it's oxy capital, I guess, was my point. Am I writing thinking that outsourcing the capital once the technology has proven potential to be a revenue stream as a license revenue? That's what I was really getting.

But can you just clarify so.

These obviously very ambitious growth plans going forward it doesn't.

Acquire the Oxy capital I guess is my point and am I right in thinking that.

Sourcing the capital once the technology is proven has potential to be a revenue stream like a license revenue that's what I was really getting at.

Speaker 3: Oh yeah, that's incredibly important. There's absolutely no way that we would have the capability to provide all of the capital. We can't do it.

Oh, Yeah, that's that's incredibly important to us theres no. There's absolutely no way that we would add them the capability to provide all of the capital we can't do it.

Speaker 3: We're going to continue to be an oil and gas business because oil and gas is also important for the world. We'll continue our investments in oil and gas and grow our...

We're going to continue to be in oil and gas business because oil and gas is also important for the world. We will continue our investments in oil and gas and grow are are willing or oil over time, because I O eligible being carbon.

Speaker 3: Our oil over time because our oil will be

Speaker 3: carbon neutral or carbon negative ultimately and so that's to mean the last barrel of oil produced in the world should come from an enhanced over recovery reservoir using CO2 from the atmosphere

Carbon neutral or carbon negative ultimately and so that's to me the last barrel of oil produced in the world should come from enhanced oil recovery reservoir using C O two on the atmosphere. So.

Speaker 3: So we will we will be doing that, but but you're right.

We will we will be doing that but that you're right.

Doug and that we will be licensing a lot of this out and we are we talked about regional concepts having partners.

Speaker 3: Doug and that we will be licensing a lot of this out. And we've talked about regional concepts, having partners around the world that can manage and drive their own construction of these facilities as we go. And they, what would come back to us would be those licensing fees.

Around the world that can match.

Manage and drive their own construction of these facilities as we go in and they would come back to us with data licensing fees.

Speaker 1: Our next question will come from Neil Dingman with tourist securities.

Our next question will come from Neal Dingmann with two of Securities.

You May now go ahead.

Speaker 12: Good afternoon, Victor and Jonathan. And that's quarter my first question is on your Permian plan. Specifically, we all turn to more co-development in the Dell or maybe just discuss your future broader completion plans there.

Good afternoon, Victor Congrats on a nice quarter. My first question is on your Permian plan, specifically just wondering what your alternative more co development in the Delaware, maybe just discuss your future broader completion plans there.

Richard.

Speaker 4: Yeah, I'd answer that a couple of ways. I think one that's been really important to us and we've tried to highlight is again, back to some of the secondary benches in the way we think about those developments. We've been pretty precise in terms of how we've put together our DSUs with those in mind. I would say this year we have in, in career start, I'll generalize a completion intensity, but it's really fracking.

Yeah.

Answer that a couple of ways I think I would I think one that's been really important to us and we've tried to highlight is again back to some of the secondary benches.

And the way, we think about those developments.

Well, we've been pretty precise.

In terms of how we put together our D. S use with those in mind I would say this year we have.

<unk> increased our.

I'll generalize it completion intensity, but it's really frac intensity.

Speaker 4: And some of that was some of the capital that we put back into the Permian that delivered.

And some of that was some of the capital that we put back into the Permian delivered.

Speaker 4: increasing cashflow for us this year. So, you know, I'd say a good portion of that capital increase was due to our increased completion intensity. So, you know, as we think about playing it forward, I think over the next several years, we're going to continue to be methodical in the way we developed those secondary benches. They'll ultimately become, you know, a bigger part of our portfolio. But we've seen with these positive surprises, the ability to optimize really the next.

The increase in cash flow for us this year so.

I'd say a good portion of that capital increase was due to our increased completion.

Intensity. So you know as we think about playing it forward I think over the next several years, we're going to continue to do.

Be methodical in the way, we develop those secondary benches, though ultimately become a bigger part of our portfolio.

But we've seen with these positive surprises the ability to optimize really the next.

Speaker 4: you know, kind of three to five year type programs.

Three to five year type programs some of the success I would say even in the Midland Basin that we've seen in the secondary benches as we looked into.

Speaker 4: You know, some of the success, I would say even in the middle and basin that we've seen in the secondary benches, as we look into, you know, this year, I think we changed.

This year I think we changed about half of our development plan due to improvements in our appraisal activity there last year. So.

Speaker 4: about half of our development plan due to improvements in our appraisal activity there last year. So I think we'll continue to do what we do, which is really focused on the sub-surface. We want to make sure our recovery is outstanding and we want our...

So I think you know we will continue to do what we do which is really focus on the subsurface we want to make sure our recovery is.

Outstanding and we want our.

Speaker 4: really DSU across multiple benches to be fit for purpose for the geology of for that area.

Really D S U across multiple benches to be fit for purpose for the geology.

For that area.

Speaker 12: That makes sense. Thanks to the details. And then second also on the Permian. The second largest earthquake ever in the Perm was reported this morning. I'm just wondering why it's probably too early to know if you had any direct impact. I'm just wondering could you all discuss the continued disposal process? And if that has changed in recent years.

That makes sense. Thanks for the details and then second also on the Permian.

Largest earthquake. The Perm was reported this morning I'm just wondering it's probably too early to know if you had any direct impact I'm. Just wondering could you all discuss the continued disposal.

Disposal process and if that has changed in recent years.

Speaker 3: I'm sorry, Neil, I didn't get that the first part of that question.

I'm, sorry, Neal I didn't get that the first part of that question.

Speaker 12: This morning, there was announced the second largest earthquake hit that looks like a hit. Oh, I'm like, I'm just wondering, you know, again, I'm not asking for the impact to really there, but just wondering maybe if you could discuss, I know you had changed some disposal process and things in the past. You could maybe just hit that quick.

This morning, there was announced the second largest earthquake hit the it looks like if it's all right.

And I'm, just wondering again I'm not asking for the impact too early there, but just wondering maybe if you could discuss I know you had changed some disposal process and things in the past if you could maybe just hit that quickly.

Yeah, I didn't know where our plants continued to leverage really the work we've done around water recycling.

Speaker 4: Yeah, I didn't know. Our plans continued to leverage really the work we've done around water recycling, you know, just in general. You know, I'm just an independent of...

Just in general.

I'd say independent of any of the hazards. We just believe that responsible use of water is a big part of what we should do.

Speaker 4: any of the hazards. We just believe that responsible use of water is a big part of what we should do. You know, we actually had a trip here recently to the Permian, got to revisit the large recycling facility that we put together with our partner there in the Midland Basin and that continues to be helpful not only for OXI but actually some of our offset peers.

We actually had a trip here recently to the Permian got the revisit the larger cycling facility that we put together with our partner there in the Midland Basin and that continues to be helpful. Not only for oxy, but actually some of our offset peers. So we're expanding that into the Delaware, it's actually a very.

Ice link as you think about other carbon capture projects that we have responsible use of industrial water is a technology that.

We really think is important for the future. So.

Aware of some of what you're asking about and some of the.

Hazards, it's been identified but again, we're trying to get out in front of that just in general and recycle more water in all areas of our operations.

Speaker 7: Our next question will come from Matt Portillo with TPH. Give me now. Go ahead. Good afternoon. I wanted to start out on the Gulf of Mexico. You mentioned you'll be running two drill ships there next year. It's curious if you could just give us an idea of key projects you're progressing in 2024. And then maybe expand a little bit on the depths of the tie-in opportunities and potential. I think Vicki commented a last quarter for PUC.

Our next question will come from Matt Portillo with T. P H.

Speaker 1: Our next question will come from Matt Portillo with T.

You May now go ahead.

Speaker 7: Good afternoon. I wanted to start out on the Gulf of Mexico. You mentioned you'll be running two drill ships there next year. It's curious if you could just give us an idea of key projects you're progressing in 2024. And then maybe expand a little bit on the depths of the Thai in opportunities and potential. I think Vicki commented last quarter for possible growth out of the asset in the second half of the decade.

Good afternoon, I wanted to start out on the Gulf of Mexico, you mentioned, you'll be running two drillships. There next year. Just curious if you could just give us an idea of key projects are progressing in 2024, and then maybe expand a little bit on the depth of the tie in opportunities and potential I think Vicki commented a lot.

Quarter, four possible growth out of the asset in the second half of the decade.

Speaker 3: Yeah, I would just reiterate, we're really excited about not just what we're doing from a capital perspective and new development, but also what we're doing with the development that we have and it has some really good things to share with you about that.

Yeah, I would just reiterate we're really excited about not just what we're doing from a capital perspective, and a new development, but also what we're doing with the development that we have in and has some really good things to share with you about that.

Yes, if I start off with the first part of your question as far as the development initiatives, we plan to drill and complete five wells in close proximity to our facilities tied back to existing subsea manifolds with.

Speaker 8: If I start off with the first part of your question, you know, as part of the development initiatives, we've run to drill and complete five wells in close proximity to our facilities, tied back to existing subsea manifolds with available capacity.

Available capacity.

Speaker 8: We also do a test on two promising exploration opportunities in Eastern Goam. We're probably about working interest of around 40%.

We'll also do test on two promising exploration opportunities in the eastern Gulf, where we'll probably have a working interest of around 40%.

Speaker 8: That aligns to our slip approach of more shots on gold through partnering.

Lines to our simple approach of more shots on goal to partnering.

Speaker 8: If I can maybe get some context of Vicki's comments on the last call, we basically see GOM through three portfolio lenses. One is primary production with base optimization and drilling, including horizontal and stimulation.

If I can maybe get some context of <unk> comments on on the last call. We basically see gone through three portfolio lenses. One is primary production with base optimization and drilling, including Horizontals and stimulation.

Second aspect is secondly, recovery, which is one of bulk sale strengths as a company worldwide with water flooding and artificial lift including subsea pumping.

Speaker 8: Second aspect is secondary recovery, which is one of OXI's strengths as a company world wide with water flooding and artificial list including sub-sea pumping and EFPs.

<unk>.

Speaker 8: And these assets very little has been done on water flooding in the past for our reservoirs. And we see significant up-site, including reservoirs that already have direct analogs nearby. And that's been part of the success of some of the majors in Gulf of Mexico in terms of adding long-term low decline production and reserves to the base.

And these assets very little that's been done on water flooding in the past for our reservoirs and we see significant upside, including reservoirs that already have direct analogues nearby and that's been part of the success of some of the majors in Gulf of Mexico in terms of adding long term low decline production and reserve.

<unk> two.

The base.

Speaker 8: exploration and in exploration we've now built a new portfolio with a significant new partner base as you saw in the recent announcement.

In exploration and an explanation we've now built a new portfolio with a significant new partner base.

And the recent announcement.

Speaker 13: that came from caused to moss, that looks like it's a successful approach going forward and that could be easily tied back quickly to Lucius. So we see this as a way of moving capital between these three legs of the stool, going forward and we see tremendous upside on the secondary recovery option.

That came from cost smart, but looks like it's a successful approach going forward.

That can be easily tie back quickly to Lucius So we see this as a way of moving capital between these three legs of the stool going forward and we see tremendous upside in the secondary recovery option.

This conclusion.

Concludes our question and answer session I would like to turn the conference back over to Vicki Holt for any closing remarks.

Thank you all for your questions and for joining our call today very much appreciate it have a great day.

Speaker 3: Thank you all for your questions and for joining our call today. Very much appreciate it. Have a great day.

The conference has now concluded. Thank you for attending today's presentation you may now disconnect.

Speaker 1: the conference is not concluded. Thank you for today's presentation. You may not.