filings.toolsItem 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
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Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
| 60 | OXY 2024 FORM 10-K |
 | table of contents | FINANCIAL STATEMENTS REPORT |
Report of Independent Registered Public Accounting Firm
To the Stockholders and Board of Directors
Occidental Petroleum Corporation:
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of Occidental Petroleum Corporation and subsidiaries (the Company) as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive income, equity, and cash flows for each of the years in the three-year period ended December 31, 2024, and the related notes and financial statement schedule II - valuation and qualifying accounts (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2024, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 18, 2025 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Assessment of the estimated proved oil and gas reserves on the determination of depletion expense related to proved oil and gas properties.
As discussed in Note 1 to the consolidated financial statements, the Company determines depreciation and depletion of oil and gas producing properties by the unit-of-production method. Under this method, capitalized costs are amortized over estimated proved reserves. For the year ended December 31, 2024, the Company recorded depreciation and depletion expense related to proved oil and gas properties of $6.6 billion.
We identified the assessment of the estimated proved oil and gas reserves on the determination of depreciation and depletion expense related to proved oil and gas properties as a critical audit matter. Complex auditor judgment was required to assess the Company’s estimate of proved oil and gas reserves, which is a key input for the determination of depreciation and depletion expense. Estimating proved oil and gas reserves requires the expertise of professional petroleum reservoir engineers. The key assumptions included estimated future production quantities and estimated operating and capital costs.
The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls over the Company’s depreciation and
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| table of contents | FINANCIAL STATEMENTS REPORT |
depletion process, including the estimation of proved oil and gas reserves. We analyzed and assessed the determination of depreciation and depletion expense for compliance with industry and regulatory standards. We assessed compliance of the methodology used by the Company’s engineering and technical staff to estimate proved oil and gas reserves with industry and regulatory standards. We read the findings of the independent reservoir engineering specialist’s review of the methods and procedures used by the Company in estimating the proved reserves for compliance with industry and regulatory standards. To assess the Company’s ability to accurately estimate future production quantities, we compared the future production quantity assumptions used by the Company in prior periods to the actual production amounts. We compared the estimated future production quantities used by the Company in the current period to historical production rates. We evaluated the operating and capital cost assumptions used by the Company by comparing them to historical costs incurred. We evaluated the professional qualifications and the knowledge, skills, and ability of the Company’s internal reserve engineers and the independent reservoir engineering specialists engaged by the Company.
Fair value of oil and gas properties on the acquisition of CrownRock
As discussed in Note 5 to the consolidated financial statements, on August 1, 2024, the Company completed an acquisition of CrownRock, L.P. (CrownRock) for total consideration of approximately $12.4 billion. The transaction was accounted for as a business combination using the acquisition method. Under the acquisition method of accounting, the assets acquired and liabilities assumed were recorded at their respective fair values as of the acquisition date. As a result of the transaction, the Company acquired oil and gas properties, which were recognized at their acquisition date fair value of $11.8 billion. The Company used a combination of valuation methodologies to estimate the initial fair value of acquired oil and gas properties. Unproved oil and gas properties were valued using a market approach based on comparable transactions for similar properties. Proved oil and gas properties were valued using an income approach.
We identified the evaluation of the acquisition-date fair value of the oil and gas properties of CrownRock as a critical audit matter. Complex auditor judgment was required in evaluating the key assumptions used to estimate the fair value of the oil and gas properties as changes to those assumptions could have had a significant effect on the fair value. The income approach utilized a risk adjusted discounted cash flow model, which included key assumptions related to estimated future production quantities, estimated operating and capital costs, forecasted commodity pricing, and the discount rate. Estimating proved oil and gas reserves requires the expertise of professional petroleum reservoir engineers. Additionally, the audit effort associated with evaluating the forecasted commodity pricing and discount rate assumptions required specialized skills and knowledge. The market approach also required specialized skills and knowledge to determine which market-based transactions were most relevant to the Company’s acquisition of CrownRock’s oil and gas properties.
The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s acquisition-date valuation process, including controls related to the determination of the key assumptions, as noted above, used to measure the fair value of the acquired oil and gas properties. We assessed compliance of the methodology used by the Company’s engineering and technical staff to estimate proved oil and gas reserves with industry and regulatory standards. We compared the estimated future production quantities to historical production rates. We evaluated the operating and capital cost assumptions used by the Company by comparing them to historical costs incurred. We evaluated the professional qualifications and the knowledge, skills, and ability of the Company’s internal reserve engineers. In addition, we involved valuation professionals with specialized skills and knowledge, who assisted in:
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evaluating the forecasted commodity pricing assumptions by comparing them to independently developed ranges of forward price estimates using data from analysts and other industry sources
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evaluating the discount rate by comparing it to a discount rate range that was independently developed using publicly available market data for comparable entities.
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assessing the acreage valuation in the market approach by comparing such valuation to a range of indicated values for comparable transactions for similar properties using publicly available market data.
/s/ KPMG LLP
We have served as the Company’s auditor since 2002.
Houston, Texas
February 18, 2025
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Report of Independent Registered Public Accounting Firm
To the Stockholders and Board of Directors
Occidental Petroleum Corporation:
Opinion on Internal Control Over Financial Reporting
We have audited Occidental Petroleum Corporation and subsidiaries' (the Company) internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive income, equity, and cash flows for each of the years in the three-year period ended December 31, 2024, and the related notes and financial statement schedule II - valuation and qualifying accounts (collectively, the consolidated financial statements), and our report dated February 18, 2025 expressed an unqualified opinion on those consolidated financial statements.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Annual Assessment of and Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ KPMG LLP
Houston, Texas
February 18, 2025
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| table of contents | FINANCIAL STATEMENTS |
| Consolidated Balance Sheets | Occidental Petroleum Corporation and Subsidiaries |
| December 31, | ||||||||
| millions | 2024 | 2023 | ||||||
| ASSETS | ||||||||
| CURRENT ASSETS | ||||||||
| Cash and cash equivalents | $ | 2,132 | $ | 1,426 | ||||
| Trade receivables, net of reserves of $24 in 2024 and $29 in 2023 | 3,526 | 3,195 | ||||||
| Joint interest receivables | 720 | 902 | ||||||
| Inventories | 2,095 | 2,022 | ||||||
| Other current assets | 597 | 830 | ||||||
| Total current assets | 9,070 | 8,375 | ||||||
| INVESTMENTS IN UNCONSOLIDATED ENTITIES | 3,159 | 3,224 | ||||||
| PROPERTY, PLANT AND EQUIPMENT | ||||||||
| Oil and gas | 121,874 | 109,214 | ||||||
| Chemical | 8,725 | 8,279 | ||||||
| Midstream and marketing | 9,322 | 8,279 | ||||||
| Corporate | 1,033 | 1,039 | ||||||
| 140,954 | 126,811 | |||||||
| Accumulated depreciation, depletion and amortization | (71,576) | (68,282) | ||||||
| Total property, plant and equipment, net | 69,378 | 58,529 | ||||||
| OPERATING LEASE ASSETS | 937 | 1,130 | ||||||
| OTHER LONG-TERM ASSETS | 2,901 | 2,750 | ||||||
| TOTAL ASSETS | $ | 85,445 | $ | 74,008 |
The accompanying notes are an integral part of these Consolidated Financial Statements.
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| Consolidated Balance Sheets | Occidental Petroleum Corporation and Subsidiaries |
| December 31, | ||||||||
| millions except share and per-share amounts | 2024 | 2023 | ||||||
| LIABILITIES AND EQUITY | ||||||||
| CURRENT LIABILITIES | ||||||||
| Current maturities of long-term debt | $ | 1,138 | $ | 1,202 | ||||
| Current operating lease liabilities | 374 | 446 | ||||||
| Accounts payable | 3,753 | 3,646 | ||||||
| Accrued liabilities | 4,256 | 3,854 | ||||||
| Total current liabilities | 9,521 | 9,148 | ||||||
| LONG-TERM DEBT, NET | 24,978 | 18,536 | ||||||
| DEFERRED CREDITS AND OTHER LIABILITIES | ||||||||
| Deferred income taxes, net | 5,394 | 5,764 | ||||||
| Asset retirement obligations | 4,042 | 3,882 | ||||||
| Other deferred credits and liabilities | 7,030 | 6,329 | ||||||
| Total deferred credits and other liabilities | 16,466 | 15,975 | ||||||
| EQUITY | ||||||||
| Preferred stock, at $1.00 per share par value, issued shares: 2024 — 84,897 and 2023 — 84,897 | 8,287 | 8,287 | ||||||
| Common stock, $0.20 per share par value, authorized shares: 1.5 billion, issued shares: 2024 — 1,166,769,167 and 2023 — 1,107,516,500 | 233 | 222 | ||||||
| Treasury stock: 2024 — 228,311,184 shares and 2023 — 228,053,397 shares | (15,597) | (15,582) | ||||||
| Additional paid-in capital | 19,868 | 17,422 | ||||||
| Retained earnings | 21,189 | 19,626 | ||||||
| Accumulated other comprehensive income | 179 | 275 | ||||||
| Total stockholders’ equity | 34,159 | 30,250 | ||||||
| Noncontrolling interest | 321 | 99 | ||||||
| Total equity | 34,480 | 30,349 | ||||||
| TOTAL LIABILITIES AND EQUITY | $ | 85,445 | $ | 74,008 |
The accompanying notes are an integral part of these Consolidated Financial Statements.
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| table of contents | FINANCIAL STATEMENTS |
| Consolidated Statements of Operations | Occidental Petroleum Corporation and Subsidiaries |
| Years Ended December 31, | |||||||||||
| millions except per-share amounts | 2024 | 2023 | 2022 | ||||||||
| REVENUES AND OTHER INCOME | |||||||||||
| Net sales | $ | 26,725 | $ | 28,257 | $ | 36,634 | |||||
| Interest, dividends and other income | 171 | 139 | 153 | ||||||||
| Gains (losses) on sales of assets and other, net | (16) | 522 | 308 | ||||||||
| Total | 26,880 | 28,918 | 37,095 | ||||||||
| COSTS AND OTHER DEDUCTIONS | |||||||||||
| Oil and gas lease operating expense | 4,738 | 4,677 | 4,028 | ||||||||
| Transportation and gathering expense | 1,608 | 1,481 | 1,475 | ||||||||
| Chemical and midstream cost of sales | 3,121 | 3,116 | 3,273 | ||||||||
| Purchased commodities | 337 | 2,009 | 3,287 | ||||||||
| Selling, general and administrative expense | 1,062 | 1,083 | 945 | ||||||||
| Other operating and non-operating expense | 1,581 | 1,084 | 1,271 | ||||||||
| Taxes other than on income | 1,039 | 1,087 | 1,548 | ||||||||
| Depreciation, depletion and amortization | 7,371 | 6,865 | 6,926 | ||||||||
| Asset impairments and other charges | 1,281 | 209 | — | ||||||||
| Acquisition-related costs | 84 | 26 | 89 | ||||||||
| Exploration expense | 275 | 441 | 216 | ||||||||
| Interest and debt expense, net | 1,175 | 945 | 1,030 | ||||||||
| Total | 23,672 | 23,023 | 24,088 | ||||||||
| Income before income taxes and other items | 3,208 | 5,895 | 13,007 | ||||||||
| OTHER ITEMS | |||||||||||
| Gains on interest rate swaps, net | — | — | 317 | ||||||||
| Income from equity investments and other | 862 | 534 | 793 | ||||||||
| Total | 862 | 534 | 1,110 | ||||||||
| Income from continuing operations before income taxes | 4,070 | 6,429 | 14,117 | ||||||||
| Income tax expense | (1,174) | (1,733) | (813) | ||||||||
| Income from continuing operations | 2,896 | 4,696 | 13,304 | ||||||||
| Income from discontinued operations, net of tax | 182 | — | — | ||||||||
| NET INCOME | 3,078 | 4,696 | 13,304 | ||||||||
| Less: Net income attributable to noncontrolling interest | (22) | — | — | ||||||||
| Less: Preferred stock dividends and redemption premiums | (679) | (923) | (800) | ||||||||
| NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS | $ | 2,377 | $ | 3,773 | $ | 12,504 | |||||
| PER COMMON SHARE | |||||||||||
| Income from continuing operations—basic | $ | 2.39 | $ | 4.22 | $ | 13.41 | |||||
| Discontinued operations—basic | 0.20 | — | — | ||||||||
| Net income attributable to common stockholders—basic | $ | 2.59 | $ | 4.22 | $ | 13.41 | |||||
| Income from continuing operations—diluted | $ | 2.26 | $ | 3.90 | $ | 12.40 | |||||
| Discontinued operations—diluted | 0.18 | — | — | ||||||||
| Net income attributable to common stockholders—diluted | $ | 2.44 | $ | 3.90 | $ | 12.40 | |||||
The accompanying notes are an integral part of these Consolidated Financial Statements.
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| table of contents | FINANCIAL STATEMENTS |
| Consolidated Statements of Comprehensive Income | Occidental Petroleum Corporation and Subsidiaries |
| Years Ended December 31, | |||||||||||
| millions | 2024 | 2023 | 2022 | ||||||||
| Net income | $ | 3,078 | $ | 4,696 | $ | 13,304 | |||||
| Other comprehensive income (loss) items: | |||||||||||
| Gains (losses) on derivatives (a) | (5) | 44 | 80 | ||||||||
| Pension and postretirement gains (losses) (b) | (89) | 34 | 321 | ||||||||
| Other | (2) | 2 | 2 | ||||||||
| Other comprehensive income (loss), net of tax | (96) | 80 | 403 | ||||||||
| Comprehensive income | 2,982 | 4,776 | 13,707 | ||||||||
| Less: Comprehensive income attributable to noncontrolling interest | (22) | — | — | ||||||||
| Comprehensive income attributable to preferred and common stockholders | $ | 2,960 | $ | 4,776 | $ | 13,707 |
(a)Net of tax expense of $(22) in 2022.
(b)Net of tax benefit (expense) of $26, $(10) and $(99) in 2024, 2023 and 2022, respectively. See Note 11 - Retirement and Postretirement Benefit Plans in the Notes to Consolidated Financial Statements in Part II Item 8 of this Form 10-K for additional information.
The accompanying notes are an integral part of these Consolidated Financial Statements.
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| table of contents | FINANCIAL STATEMENTS |
| Consolidated Statements of Equity | Occidental Petroleum Corporation and Subsidiaries |
| Equity Attributable to Common Stock | ||||||||||||||||||||||||||
| Preferred Stock | Common Stock | Treasury Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interests | Total Equity | |||||||||||||||||||
| Balance, December 31, 2021 | $ | 9,762 | $ | 217 | $ | (10,673) | $ | 16,749 | $ | 4,480 | $ | (208) | $ | — | $ | 20,327 | ||||||||||
| Net income | — | — | — | — | 13,304 | — | — | 13,304 | ||||||||||||||||||
| Other comprehensive income, net of tax | — | — | — | — | — | 403 | — | 403 | ||||||||||||||||||
| Dividends on common stock, $0.52 per share | — | — | — | — | (485) | — | — | (485) | ||||||||||||||||||
| Dividends on preferred stock, $8,000 per share | — | — | — | — | (800) | — | — | (800) | ||||||||||||||||||
| Shareholder warrants exercised | — | 2 | — | 252 | — | — | — | 254 | ||||||||||||||||||
| Options Exercised | — | — | — | 27 | — | — | — | 27 | ||||||||||||||||||
| Issuance of common stock and other, net | — | 1 | — | 153 | — | — | — | 154 | ||||||||||||||||||
| Purchases of treasury stock | — | — | (3,099) | — | — | — | — | (3,099) | ||||||||||||||||||
| Balance, December 31, 2022 | $ | 9,762 | $ | 220 | $ | (13,772) | $ | 17,181 | $ | 16,499 | $ | 195 | $ | — | $ | 30,085 | ||||||||||
| Net income | — | — | — | — | 4,696 | — | — | 4,696 | ||||||||||||||||||
| Other comprehensive income, net of tax | — | — | — | — | — | 80 | — | 80 | ||||||||||||||||||
| Dividends on common stock, $0.72 per share | — | — | — | — | (646) | — | — | (646) | ||||||||||||||||||
| Dividends on preferred stock, $8,000 per share | — | — | — | — | (736) | — | — | (736) | ||||||||||||||||||
| Preferred stock redemption – face value | (1,511) | — | — | — | — | — | — | (1,511) | ||||||||||||||||||
| Preferred stock redemption – premium | — | — | — | — | (151) | — | — | (151) | ||||||||||||||||||
| Preferred stock redemption – amortization of carrying value | 36 | — | — | — | (36) | — | — | — | ||||||||||||||||||
| Shareholder warrants exercised | — | 1 | — | 98 | — | — | — | 99 | ||||||||||||||||||
| Options Exercised | — | — | — | 13 | — | — | — | 13 | ||||||||||||||||||
| Issuance of common stock and other, net | — | 1 | — | 130 | — | — | — | 131 | ||||||||||||||||||
| Purchases of treasury stock | — | — | (1,810) | — | — | — | — | (1,810) | ||||||||||||||||||
| Noncontrolling interest contributions, net | — | — | — | — | — | — | 99 | 99 | ||||||||||||||||||
| Balance, December 31, 2023 | $ | 8,287 | $ | 222 | $ | (15,582) | $ | 17,422 | $ | 19,626 | $ | 275 | $ | 99 | $ | 30,349 | ||||||||||
| Net income | — | — | — | — | 3,056 | — | 22 | 3,078 | ||||||||||||||||||
| Other comprehensive loss, net of tax | — | — | — | — | — | (96) | — | (96) | ||||||||||||||||||
| Dividends on common stock, $0.88 per share | — | — | — | — | (814) | — | — | (814) | ||||||||||||||||||
| Dividends on preferred stock, $8,000 per share | — | — | — | — | (679) | — | — | (679) | ||||||||||||||||||
| Shareholder warrants exercised | — | 5 | — | 554 | — | — | — | 559 | ||||||||||||||||||
| Issuance of common stock and other, net of cancellations | — | — | — | 143 | — | — | — | 143 | ||||||||||||||||||
| Purchases of treasury stock | — | — | (15) | — | — | — | — | (15) | ||||||||||||||||||
| Common Stock issued for CrownRock acquisition | — | 6 | — | 1,749 | — | — | — | 1,755 | ||||||||||||||||||
| Noncontrolling interest contributions, net | — | — | — | — | — | — | 200 | 200 | ||||||||||||||||||
| Balance, December 31, 2024 | $ | 8,287 | $ | 233 | $ | (15,597) | $ | 19,868 | $ | 21,189 | $ | 179 | $ | 321 | $ | 34,480 |
The accompanying notes are an integral part of these Consolidated Financial Statements.
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| Consolidated Statements of Cash Flows | Occidental Petroleum Corporation and Subsidiaries |
| Years Ended December 31, | ||||||||||||||
| millions | 2024 | 2023 | 2022 | |||||||||||
| CASH FLOW FROM OPERATING ACTIVITIES | ||||||||||||||
| Net income | $ | 3,078 | $ | 4,696 | $ | 13,304 | ||||||||
| Adjustments to reconcile net income to net cash from operating activities: | ||||||||||||||
| Discontinued operations, net | (182) | — | — | |||||||||||
| Depreciation, depletion and amortization of assets | 7,371 | 6,865 | 6,926 | |||||||||||
| Deferred income tax provision (benefit) | (461) | 57 | (1,644) | |||||||||||
| Other noncash charges (benefit) to income | 543 | (100) | (8) | |||||||||||
| Asset impairments and related items | 1,281 | 209 | — | |||||||||||
| Losses (gains) on sales of assets and other, net | 60 | (522) | (308) | |||||||||||
| Undistributed losses (earnings) from equity investments | (79) | 144 | (219) | |||||||||||
| Dry hole expense | 106 | 299 | 84 | |||||||||||
| Changes in operating assets and liabilities: | ||||||||||||||
| (Increase) decrease in trade receivables | (133) | 1,088 | (97) | |||||||||||
| Increase in inventories | (46) | (91) | (230) | |||||||||||
| (Increase) decrease in joint interest receivables and other current assets | 303 | (13) | (335) | |||||||||||
| Decrease in accounts payable and accrued liabilities | (661) | (549) | (478) | |||||||||||
| Increase (decrease) in current domestic and foreign income taxes | 559 | 225 | (185) | |||||||||||
| Operating cash flow from continuing operations | 11,739 | 12,308 | 16,810 | |||||||||||
| Operating cash flow from discontinued operations | (300) | — | — | |||||||||||
| Net cash provided by operating activities | 11,439 | 12,308 | 16,810 | |||||||||||
| CASH FLOW FROM INVESTING ACTIVITIES | ||||||||||||||
| Capital expenditures | (7,018) | (6,270) | (4,497) | |||||||||||
| Change in capital accrual | 96 | 25 | 147 | |||||||||||
| Purchases of assets, businesses and equity investments, net | (9,129) | (713) | (990) | |||||||||||
| Proceeds from sale of assets and equity investments, net | 1,673 | 448 | 584 | |||||||||||
| Equity investments and other, net | (212) | (470) | (116) | |||||||||||
| Net cash used by investing activities | (14,590) | (6,980) | (4,872) | |||||||||||
| CASH FLOW FROM FINANCING ACTIVITIES | ||||||||||||||
| Draws on receivables securitization facility | — | 900 | 400 | |||||||||||
| Payment of receivables securitization facility | — | (900) | (400) | |||||||||||
| Proceeds from long-term debt, net | 9,612 | (46) | — | |||||||||||
| Payments of long-term debt, net | (4,514) | (22) | (9,484) | |||||||||||
| Redemption of preferred stock | — | (1,661) | — | |||||||||||
| Purchases of treasury stock | (27) | (1,798) | (3,099) | |||||||||||
| Cash dividends paid on common and preferred stock | (1,446) | (1,365) | (1,184) | |||||||||||
| Proceeds from issuance of common stock | 584 | 135 | 293 | |||||||||||
| Contributions from noncontrolling interest | 200 | 100 | — | |||||||||||
| Financing portion of net cash paid for derivative instruments | — | — | (111) | |||||||||||
| Deferred payments for purchases of assets and businesses | (318) | — | — | |||||||||||
| Other financing, net | (247) | (233) | (130) | |||||||||||
| Net cash provided (used) by financing activities | 3,844 | (4,890) | (13,715) | |||||||||||
| Increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents | 693 | 438 | (1,777) | |||||||||||
| Cash, cash equivalents, restricted cash and restricted cash equivalents — beginning of year | 1,464 | 1,026 | 2,803 | |||||||||||
| Cash, cash equivalents, restricted cash and restricted cash equivalents — end of year | $ | 2,157 | $ | 1,464 | $ | 1,026 |
The accompanying notes are an integral part of these Consolidated Financial Statements.
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| Notes to Consolidated Financial Statements | Occidental Petroleum Corporation and Subsidiaries |
| NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
NATURE OF OPERATIONS
Occidental conducts its operations through various subsidiaries and affiliates. Occidental’s principal businesses consist of three reporting segments: oil and gas, chemical and midstream and marketing. The oil and gas segment explores for, develops and produces oil (which includes condensate), NGL and natural gas. OxyChem primarily manufactures and markets basic chemicals and vinyls. The midstream and marketing segment purchases, markets, gathers, processes, transports and stores oil (which includes condensate), NGL, natural gas, CO2 and power. It also optimizes its transportation and storage capacity, and invests in entities that conduct similar activities, such as WES.
The midstream and marketing segment also includes OLCV. OLCV seeks to leverage Occidental’s legacy of carbon management experience to develop CCUS projects, including the commercialization of DAC technology, and invests in other low-carbon technologies intended to reduce GHG emissions from Occidental’s operations and strategically partner with other industries to help reduce their emissions.
PRINCIPLES OF CONSOLIDATION
The Consolidated Financial Statements have been prepared in conformity with GAAP and include the accounts of Occidental, its subsidiaries, its undivided interests in oil and gas exploration and production ventures and, variable interest entities, for which Occidental was the primary beneficiary. Occidental accounts for its share of oil and gas exploration and production ventures by reporting its proportionate share of assets, liabilities, revenues, costs and cash flows within the relevant lines on the balance sheets, statements of operations and statements of cash flows.
INVESTMENTS IN UNCONSOLIDATED ENTITIES
Occidental’s percentage interest in the underlying net assets of affiliates for which it exercises significant influence without having a controlling interest (excluding oil and gas ventures in which Occidental holds an undivided interest) are accounted for under the equity method. Occidental reviews equity-method investments for impairment whenever events or changes in circumstances indicate that an other-than-temporary decline in value may have occurred. The amount of impairment, if any, is based on quoted market prices, when available, or other valuation techniques, including discounted cash flows. Occidental evaluates the facts and circumstances of any distributions in excess of its carrying amount in the investment to determine the appropriate accounting, including the source of the proceeds and any implicit or explicit commitments to fund the affiliate. If there is no implicit or explicit commitment, the distribution is treated as a gain. If an implicit or explicit commitment exists to possibly fund the affiliate at a future date, the distribution is recorded against the equity-method investment. See Note 4 - Investments and Related-Party Transactions for further discussion regarding investments in unconsolidated entities.
WES INVESTMENT
WES is a publicly traded limited partnership with its limited partner units traded on the NYSE under the ticker symbol “WES.” In August 2024, Occidental sold 19.5 million of its limited partner units for proceeds of $697 million resulting in a pre-tax gain of $489 million. As of December 31, 2024, Occidental owned all of the 2.3% non-voting general partner interest, 43.5% of the WES limited partner units, and a 2% non-voting limited partner interest in WES Operating, a subsidiary of WES. As of December 31, 2024, Occidental's combined share of net income from WES and its subsidiaries was 46.0%. See Note 4 - Investment and Related-Party Transactions for further information.
NONCONTROLLING INTEREST
In 2023, Occidental and BlackRock formed a joint venture for the continued development of the first commercial scale direct air capture facility in Ector County, Texas. The joint venture is a VIE and Occidental consolidates the VIE as it is the primary beneficiary. BlackRock’s investment is accounted for as a NCI. Each party has committed to make additional investments towards the completion of the direct air capture facility, with BlackRock committed to invest up to $550 million. In addition, Occidental has entered into agreements with the joint venture related to project management, operations and maintenance and carbon removal offtake. Occidental may incur additional payments if certain construction and operational thresholds are not met.
Occidental may call the NCI on June 30, 2035 or earlier if the plant does not achieve commercial operations or ceases and permanently discontinues operations. Dividends from the joint venture will be distributed preferentially to the NCI up to a return threshold, then preferentially to Occidental thereafter. The NCI receives preferential distributions in liquidation.
Because distributions from the joint venture will not be consistent over time, or with the initial investments or ownership interest, Occidental has determined that the appropriate methodology for attributing income and loss from the joint venture is the hypothetical liquidation at book value method. Under this method, the amounts of income and loss attributed to the NCI in the Consolidated Statements of Operations reflect changes in the amounts the NCI would hypothetically receive at each
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balance sheet date if the joint venture was liquidated. As of December 31, 2024, the VIE’s assets were comprised of $773 million construction in progress. Noncontrolling interest as of December 31, 2024 was $321 million.
BERKSHIRE HATHAWAY OWNERSHIP
Berkshire Hathaway is a related party of Occidental due to its level of ownership of Occidental's common stock. As of December 31, 2024, Berkshire Hathaway’s ownership in Occidental included 264 million shares of common stock, 83.9 million of warrants of Occidental common stock with a strike price of $59.62, and $8.5 billion in preferred stock. Occidental has, from time to time, contracted with Berkshire Hathaway for the provision of electricity, rail and insurance. In addition, certain Berkshire Hathaway subsidiaries purchase various chemicals from OxyChem.
DISCONTINUED OPERATIONS
Unless otherwise indicated, information presented in the Notes to Consolidated Financial Statements relates only to Occidental's continuing operations. Information related to discontinued operations is included in Note 5 - Acquisitions, Divestitures and Other Transactions and in some instances, where appropriate, is included as a separate disclosure within the individual Notes to Consolidated Financial Statements.
RISKS AND UNCERTAINTIES
The process of preparing Consolidated Financial Statements in conformity with GAAP requires Occidental’s management to make informed estimates and judgments regarding certain types of financial statement balances and disclosures. Such estimates primarily relate to unsettled transactions and events as of the date of the Consolidated Financial Statements and judgments on expected outcomes as well as the materiality of transactions and balances. Changes in facts and circumstances or discovery of new information relating to such transactions and events may result in revised estimates and judgments and actual results may differ from estimates upon settlement. Management believes that these estimates and judgments provide a reasonable basis for the fair presentation of Occidental’s financial statements. Occidental establishes a valuation allowance against net operating losses and other deferred tax assets to the extent it believes the future benefit from these assets will not be realized in the statutory carryforward periods. Realization of deferred tax assets is dependent upon Occidental generating sufficient future taxable income and reversal of temporary differences in jurisdictions where such assets originate.
The accompanying Consolidated Financial Statements include assets of approximately $7.7 billion as of December 31, 2024 and net sales of approximately $4.3 billion in 2024 relating to Occidental’s operations in countries outside North America. Occidental is exposed to various risks, because certain of its international operations are located in countries which could be affected by political or civil instability, OPEC production restrictions, equipment import restrictions and sanctions. Exposure to such risks may increase if a greater percentage of Occidental’s future oil and gas production or revenue comes from international sources. Occidental attempts to conduct its affairs so as to mitigate its exposure to such risks and would seek compensation in the event of nationalization.
Because Occidental’s major products are commodities, significant changes in the prices of oil, NGL, natural gas and chemical products may have a significant impact on Occidental’s results of operations. Also, see Property, Plant and Equipment section below.
RECEIVABLES AND OTHER CURRENT ASSETS
Trade receivables, net of $3.5 billion and $3.2 billion as of December 31, 2024 and 2023, respectively, represent rights to payment for which Occidental had satisfied its obligations under a contract with a customer and its right to payment was conditioned only on the passage of time.
Other current assets includes prepaid expenses, derivative assets and taxes receivable.
Joint interest receivables represent amounts due for capital and operating costs from third-party non-operating partners.
INVENTORIES
Materials and supplies are valued at weighted-average cost and are reviewed periodically for obsolescence. Oil, NGL and natural gas inventories are valued at the lower of cost or market.
For the chemical segment, Occidental’s finished goods inventories are valued at the lower of cost or market. For most of its domestic inventories, other than materials and supplies, the chemical segment uses the LIFO method as it better matches current costs and current revenue. For other countries, Occidental uses the first-in, first-out method (if the costs of goods are specifically identifiable) or the average-cost method (if the costs of goods are not specifically identifiable).
PROPERTY, PLANT AND EQUIPMENT
OIL AND GAS
The carrying value of Occidental’s PP&E represents the cost incurred to acquire or develop the asset, including any AROs and capitalized interest, net of accumulated DD&A and any impairment charges. For assets acquired, PP&E cost is based on fair values at the acquisition date. AROs and interest costs incurred in connection with qualifying capital expenditures are capitalized and amortized over the lives of the related assets.
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Occidental uses the successful efforts method to account for its oil and gas properties. Under this method, Occidental capitalizes costs of acquiring properties, costs of drilling successful exploration wells and development costs. The costs of exploratory wells are initially capitalized pending a determination of whether proved reserves have been found. If proved reserves have been found, the costs of exploratory wells remain capitalized. For exploratory wells that find reserves that cannot be classified as proved when drilling is completed, costs continue to be capitalized as suspended exploratory drilling costs if there have been sufficient reserves found to justify completion as a producing well and sufficient progress is being made in assessing the reserves and the economic and operating viability of the project. At the end of each quarter, management reviews the status of all suspended exploratory drilling costs in light of ongoing exploration activities, in particular, whether Occidental is making sufficient progress in its ongoing exploration and appraisal efforts or, in the case of discoveries requiring government sanctioning, analyzing whether development negotiations are underway and proceeding as planned. If management determines that future appraisal drilling or development activities are unlikely to occur, associated suspended exploratory well costs are expensed.
The following table summarizes the activity of capitalized exploratory well costs for continuing operations for the years ended December 31:
| millions | 2024 | 2023 | 2022 | ||||||||
| Balance — beginning of year | $ | 405 | $ | 276 | $ | 213 | |||||
| Additions to capitalized exploratory well costs pending the determination of proved reserves | 556 | 750 | 323 | ||||||||
| Reclassifications to property, plant and equipment based on the determination of proved reserves | (594) | (314) | (183) | ||||||||
| Capitalized exploratory well costs charged to expense | (105) | (307) | (77) | ||||||||
| Balance — end of year | $ | 262 | $ | 405 | $ | 276 |
Occidental expenses annual lease rentals, the costs of injectants used in production and geological and geophysical costs as incurred.
Occidental determines depreciation and depletion of oil and gas producing properties by the unit-of-production method. It amortizes leasehold costs over total proved reserves and capitalized development and successful exploration costs over proved developed reserves.
Proved oil and gas reserves are those quantities of oil and gas which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible from a given date forward, from known reservoirs and under existing economic conditions, operating methods and government regulations prior to the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of whether deterministic or probabilistic methods are used for the estimation. Proved reserves include PUD reserves. PUD reserves are supported by a management-approved, detailed, field-level development plan where sufficient capital has been committed to develop those reserves. Only PUD reserves which are reasonably certain to be drilled within five years of booking and are supported by a final investment decision to drill them are included in the development plan. A portion of the PUD reserves are expected to be developed beyond the five years and are tied to approved long-term development projects.
Occidental performs impairment tests with respect to its proved properties whenever events or circumstances indicate that the carrying value of property may not be recoverable. If there is an indication the carrying amount of the asset may not be recovered due to significant and prolonged declines in current and forward prices, significant changes in reserve estimates, changes in management’s plans, or other significant events, management will evaluate the property for impairment. Under the successful efforts method, if the sum of the undiscounted cash flows is less than the carrying value of the proved property, the carrying value is reduced to estimated fair value and reported as an impairment charge in the period. Individual proved properties are grouped for impairment purposes at the lowest level for which there are identifiable cash flows. The fair value of impaired assets is typically determined based on the present value of expected future cash flows using discount rates believed to be consistent with those used by market participants. The impairment test incorporates a number of assumptions involving expectations of future cash flows which can change significantly over time. These assumptions include estimates of future production, product prices, contractual prices, estimates of risk-adjusted oil and gas proved and unproved reserves and estimates of future operating and development costs. It is reasonably possible that prolonged declines in commodity prices, reduced capital spending in response to lower prices or increases in operating costs could result in additional impairments. See Note 9 - Fair Value Measurements and below for further discussion of asset impairments.
Net capitalized costs attributable to unproved properties were $10.2 billion as of December 31, 2024 and 2023, respectively. The unproved amounts are not subject to DD&A until they are classified as proved properties. Individually insignificant unproved properties are combined and amortized on a group basis based on factors such as geographic location, lease terms, success rates and other factors to provide for full amortization upon lease expiration or abandonment.
Significant unproved properties are assessed individually for impairment and, when events or circumstances indicate that the carrying value of property may not be recovered, a valuation allowance is provided if an impairment is indicated. Occidental periodically reviews significant unproved properties for impairments. When assessing for impairments, several
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factors are considered, including, but not limited to, availability of funds for future exploration and development activities, current exploration and development plans, favorable or unfavorable exploration activity on the property or the adjacent property, geologists’ evaluation of the property, the current and projected political and regulatory climate, contractual conditions and the remaining lease term for the properties. If an impairment is indicated, Occidental will first determine whether a comparable transaction for similar properties or implied acreage valuation derived from domestic onshore market participants is available and will adjust the carrying amount of the unproved property to its fair value using the market approach. In situations where the market approach is not observable and unproved reserves are available, undiscounted future net cash flows used in the impairment analysis are determined based on management’s risk-adjusted estimates of unproved reserves, future commodity prices and future costs to produce the reserves. If undiscounted future net cash flows are less than the carrying value of the unproved property, the future net cash flows are discounted and compared to the carrying value for determining the amount of the impairment loss to record. Occidental utilizes the same methodology discussed above for cash flows associated with proved properties.
CHEMICAL
Occidental’s chemical assets are depreciated using the straight-line method, based upon the estimated useful lives of the facilities. The estimated useful lives of Occidental’s chemical assets, which range from three years to 50 years, are also used for impairment tests. The estimated useful lives for the chemical facilities are based on the assumption that Occidental will provide an appropriate level of annual expenditures to ensure productive capacity is sustained. Such expenditures consist of ongoing routine repairs and maintenance, as well as planned major maintenance activities. Ongoing routine repairs and maintenance expenditures are expensed as incurred. Planned major maintenance activities costs are capitalized and amortized over the period until the next planned overhaul. Additionally, Occidental incurs capital expenditures that extend the remaining useful lives of existing assets, increase their capacity or operating efficiency beyond the original specification or add value through modification for a different use. These capital expenditures are not considered in the initial determination of the useful lives of these assets at the time they are placed into service. The resulting revision, if any, of the asset’s estimated useful life is measured and accounted for prospectively.
Without these continued expenditures, the useful lives of these assets could decrease significantly. Other factors that could change the estimated useful lives of Occidental’s chemical assets include sustained higher or lower product prices, which are affected by domestic and international competition, demand, feedstock costs, energy prices, environmental regulations and technological changes.
Occidental performs impairment tests on its chemical assets whenever events or changes in circumstances lead to a reduction in the estimated useful lives or estimated future cash flows that would indicate that the carrying amount may not be recoverable, or when management’s plans change with respect to those assets. Any impairment loss would be calculated as the excess of the asset’s net book value over its estimated fair value.
MIDSTREAM AND MARKETING
Occidental’s midstream and marketing PP&E is depreciated over the estimated useful lives of the assets, which range from 3 years to 40 years, using the straight-line method.
Occidental performs impairment tests on its midstream and marketing assets whenever events or changes in circumstances lead to a reduction in the estimated useful lives or estimated future cash flows that would indicate that the carrying amount may not be recoverable, or when management’s plans change with respect to those assets. Any impairment loss would be calculated as the excess of the asset’s net book value over its estimated fair value.
IMPAIRMENTS AND OTHER CHARGES
In 2024, Occidental recorded a pre-tax impairment of $334 million related to certain wells in the Gulf of America whose future net cash inflows did not indicate that the asset value is recoverable. Also included in Impairments and other charges was an increase in the non-current environmental remediation liability related to OU2 and OU4 of the DASS for $925 million. See Note 13 - Lawsuits, Claims, Commitments and Contingencies for additional information.
In 2023, Occidental recorded a pre-tax impairment of $180 million related to undeveloped acreage in the northern non-core area of the Powder River Basin where Occidental has decided not to pursue future exploration and appraisal activities. In 2023, impairment expense also included $29 million related to an equity method investment in Black Butte Coal Company.
INTANGIBLES AND GOODWILL
As of December 31, 2024, Occidental had $920 million of other intangible assets primarily related to Carbon Engineering and TerraLithium included in the midstream and marketing segment other long-term assets. These assets are amortized between 9 and 25 years on a straight-line basis. Occidental performs impairment tests on its finite-lived intangible assets whenever events or changes in circumstances lead to a reduction in the estimated useful lives or estimated future cash flows that would indicate that the carrying amount may not be recoverable, or when management’s plans change with respect to those assets. Any impairment loss would be calculated as the excess of the asset’s net book value over its estimated fair value.
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As of December 31, 2024, Occidental had $668 million of goodwill related to its ownership in Carbon Engineering included in the midstream and marketing segment other long-term assets. Goodwill is subject to annual impairment testing every April. Occidental’s goodwill impairment test first assesses qualitative factors to determine whether goodwill is likely impaired. If the qualitative assessment indicates that it is more likely than not that the fair value of a reporting unit is less than its carrying amount including goodwill, Occidental will then perform a quantitative goodwill impairment test. Changes in goodwill may result from, among other things, impairments, future acquisitions, or future divestitures.
FAIR VALUE MEASUREMENTS
Occidental has categorized its assets and liabilities that are measured at fair value in a three-level fair value hierarchy, based on the inputs to the valuation techniques: Level 1 – using quoted prices in active markets for the assets or liabilities; Level 2 – using observable inputs other than quoted prices for the assets or liabilities; and Level 3 – using unobservable inputs. Transfers between levels, if any, are reported at the end of each reporting period.
FAIR VALUES - RECURRING
Occidental primarily applies the market approach for recurring fair value measurements, maximizes its use of observable inputs and minimizes its use of unobservable inputs. Occidental utilizes the mid-point between bid and ask prices for valuing the majority of its assets and liabilities measured and reported at fair value. In addition to using market data, Occidental makes assumptions in valuing its assets and liabilities, including assumptions about the risks inherent in the inputs to the valuation technique. For assets and liabilities carried at fair value, Occidental measures fair value using the following methods:
■Occidental values exchange-cleared commodity derivatives using closing prices provided by the exchange as of the balance sheet date. These derivatives are classified as Level 1.
■OTC bilateral financial commodity contracts, foreign exchange contracts, interest rate swaps, warrants, options and physical commodity forward purchase and sale contracts are generally classified as Level 2 and are generally valued using quotations provided by brokers or industry-standard models that consider various inputs, including quoted forward prices for commodities, time value, volatility factors, credit risk and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these inputs are observable in the marketplace throughout the full term of the instrument, and can be derived from observable data or are supported by observable prices at which transactions are executed in the marketplace.
■Occidental values commodity derivatives based on a market approach that considers various assumptions, including quoted forward commodity prices and market yield curves. The assumptions used include inputs that are generally unobservable in the marketplace or are observable but have been adjusted based upon various assumptions and the fair value is designated as Level 3 within the valuation hierarchy.
■Occidental values debt using market-observable information for debt instruments that are traded on secondary markets. For debt instruments that are not traded, the fair value is determined by interpolating the value based on debt with similar terms and credit risk.
NON-FINANCIAL ASSETS
Occidental uses market-observable prices for assets when comparable transactions can be identified that are similar to the asset being valued. When Occidental is required to measure fair value and there is not a market-observable price for the asset or for a similar asset then the cost or income approach is used depending on the quality of information available to support management’s assumptions. The cost approach is based on management’s best estimate of the current asset replacement cost. The income approach is based on management’s best assumptions regarding expectations of future net cash flows. The expected cash flows are discounted using a commensurate risk-adjusted discount rate. Such evaluations involve significant judgment, and the results are based on expected future events or conditions such as sales prices, estimates of future oil and gas production or throughput, development and operating costs and the timing thereof, economic and regulatory climates and other factors, most of which are often outside of management’s control. However, assumptions used reflect a market participant’s view of long-term prices, costs and other factors and are consistent with assumptions used in Occidental’s business plans and investment decisions.
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ACCRUED LIABILITIES - CURRENT
Accrued liabilities-current consisted of the following line items for the years ended 2024 and 2023:
| millions | 2024 | 2023 | |||||||||
| Payroll and related expenses | $ | 694 | $ | 693 | |||||||
| Income tax payable | 471 | 25 | |||||||||
| Accrued interest payable | 446 | 336 | |||||||||
| Taxes other than on income | 442 | 618 | |||||||||
| Carbon Engineering acquisition payable | 393 | 300 | |||||||||
| Current asset retirement obligations | 388 | 193 | |||||||||
| Dividends payable | 354 | 307 | |||||||||
| Other | 1,068 | 1,382 | |||||||||
| Accrued liabilities - current | $ | 4,256 | $ | 3,854 |
ACCRUED LIABILITIES - NON-CURRENT
Accrued liabilities non-current consisted of the following line items for the years ended 2024 and 2023:
| millions | 2024 | 2023 | |||||||||
| Long term tax liabilities (b) | 2,204 | 2,072 | |||||||||
| Environmental remediation liabilities (a) | 1,759 | 889 | |||||||||
| Pension and postretirement obligations | 1,022 | 931 | |||||||||
| Operating lease liabilities | 614 | 727 | |||||||||
| Other | 1,431 | 1,710 | |||||||||
| Accrued liabilities - non-current | $ | 7,030 | $ | 6,329 |
(a) See Note 12 - Environmental Liabilities and Expenditures for additional information.
(b) See Note 13 - Lawsuits, Claims, Commitments and Contingencies for additional information.
ENVIRONMENTAL LIABILITIES AND EXPENDITURES
Certain subsidiaries of Occidental incur environmental liabilities and expenditures that relate to current operations and are expensed or capitalized by such subsidiaries as appropriate. Certain subsidiaries also incur environmental liabilities and expenditures with respect to remediation of existing conditions from alleged past practices at Third-Party, Currently Operated, and Closed or Non-operated Sites, which categories may include NPL sites. Those environmental liabilities and related charges and expenses for estimated remediation costs from alleged past practices are recorded when environmental remediation efforts are probable and the costs can be reasonably estimated. Occidental discloses such remediation liabilities of its subsidiaries on a consolidated basis. In determining the environmental remediation liability and the range of reasonably possible additional losses, Occidental refers to currently available information, including relevant past experience, remedial objectives, available technologies, applicable laws and regulations and cost-sharing arrangements. These environmental remediation liabilities are based on management’s estimate of the most likely cost to be incurred using the most cost-effective technology reasonably expected to achieve the remedial objective. Occidental periodically reviews these environmental remediation liabilities and adjusts them as new information becomes available. Occidental’s subsidiaries generally record reimbursements or recoveries of environmental remediation costs in income when received, or when receipt of recovery is highly probable.
Many factors could affect future remediation costs incurred by Occidental’s subsidiaries and result in adjustments to environmental remediation liabilities and the range of reasonably possible additional losses. The most significant are: (i) cost estimates for remedial activities may vary from the initial estimate; (ii) the length of time, type or amount of remediation necessary to achieve the remedial objective may change due to factors such as site conditions, the ability to identify and control contaminant sources or the discovery of additional contamination; (iii) a regulatory agency may ultimately reject or modify remedial plans proposed by Occidental’s subsidiaries; (iv) improved or alternative remediation technologies may change remediation costs; (v) laws and regulations may change remediation requirements or affect cost sharing or allocation of liability; and (vi) changes in allocation or cost-sharing arrangements may occur.
Certain sites involve multiple parties with various cost-sharing arrangements, which fall into the following three categories: (i) environmental proceedings that result in a negotiated or prescribed allocation of remediation costs among the affected Occidental subsidiary and other alleged potentially responsible parties; (ii) oil and gas ventures in which each participant pays its proportionate share of remediation costs reflecting its working interest; or (iii) contractual arrangements, typically relating to purchases and sales of properties, in which the parties to the transaction agree to methods of allocating remediation costs. In these circumstances, the affected subsidiary evaluates the financial viability of other parties with whom it is alleged to be jointly liable, the degree of their commitment to participate and the consequences to such subsidiary of
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their failure to participate when estimating its ultimate share of liability. Occidental records its environmental remediation liabilities at its expected net cost of remedial activities and, based on these factors, believes that it will not be required to assume a share of liability of such other potentially responsible parties in an amount materially above amounts reserved.
In addition to the costs of investigations and cleanup measures, which often take in excess of 10 years at CERCLA NPL sites, Occidental’s environmental remediation liabilities include management’s estimates of the costs to operate and maintain remedial systems. If remedial systems are modified over time in response to significant changes in site-specific data, laws, regulations, technologies or engineering estimates, Occidental reviews and adjusts its environmental remediation liabilities accordingly.
ASSET RETIREMENT OBLIGATIONS
Occidental recognizes the fair value of AROs in the period in which a determination is made that a legal obligation exists to dismantle an asset and reclaim or remediate the property at the end of its useful life and the cost of the obligation can be reasonably estimated. The liability amounts are based on future retirement cost estimates and incorporate many assumptions such as time to abandonment, future inflation rates and the risk-adjusted discount rate. When the liability is initially recorded, Occidental capitalizes the cost by increasing the related PP&E balances. If the estimated future cost of the AROs changes, Occidental records an adjustment to both the AROs and PP&E. Over time, the liability is increased, expense is recognized for accretion and the capitalized cost is depreciated over the useful life of the asset. Adjustments to ARO for oil and gas properties where the field has reached cessation of production are recorded as gain (loss) on ARO settlements and are included in gain (loss) on the sale of assets and other, net in the Consolidated Statements of Operations.
The majority of Occidental’s AROs relate to the plugging of wells and the related abandonment of oil and gas properties.
At a certain number of its facilities, Occidental has identified conditional AROs that are related mainly to plant decommissioning. Occidental does not know or cannot estimate when it may settle these obligations. Therefore, Occidental cannot reasonably estimate the fair value of these liabilities. Occidental will recognize these conditional AROs in the periods in which sufficient information becomes available to reasonably estimate their fair values.
The following table summarizes the activity of AROs for the years ended December 31:
| millions | 2024 | 2023 | ||||||
| Beginning balance | $ | 4,075 | $ | 3,805 | ||||
| Liabilities incurred – capitalized to PP&E | 287 | 105 | ||||||
| Liabilities settled and paid | (445) | (295) | ||||||
| Accretion expense | 234 | 211 | ||||||
| Acquisitions, divestitures and other, net | 2 | (15) | ||||||
| Revisions to previous estimates | 277 | 264 | ||||||
| Ending balance | $ | 4,430 | $ | 4,075 |
DERIVATIVE INSTRUMENTS
Derivatives are carried at fair value and on a net basis when a legal right of offset exists with the same counterparty. Fair value gains or losses are recognized in earnings in the current period. Gains and losses from derivative instruments are reported net in the Consolidated Statements of Operations. See Note 8 - Derivatives for additional information. There were no fair value hedges as of and during the years ended December 31, 2024, 2023 and 2022.
STOCK-BASED INCENTIVE PLANS
Occidental has established the Plans that are more fully described in Note 15 - Stock-Based Incentive Plans. A summary of Occidental’s accounting policy for awards issued under the Plans is as follows.
For cash- and stock-settled RSUs and CROCEI awards, compensation value is initially measured on the grant date using the quoted market price of Occidental’s common stock and the estimated payout on the grant date. The fair value of stock options is estimated using a Black-Scholes model. For TSRI awards, compensation value is initially measured on the grant date using the fair value derived from a Monte Carlo valuation model. Compensation expense for all awards is recognized on a straight-line basis over the requisite service periods, which is generally over the awards’ respective vesting or performance periods. The stock-settled awards are expensed using the initially measured compensation value. The liability resulting from cash settled awards and accrued dividends are remeasured at each reporting period. Dividends accrued on unvested awards are adjusted quarterly for any changes in the number of share equivalents expected to be paid based on the relevant performance and market criteria, if applicable.
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RETIREMENT AND POSTRETIREMENT BENEFIT PLANS
Occidental recognizes the overfunded or underfunded amounts of its defined benefit pension and postretirement plans, which are more fully described in Note 11 - Retirement and Postretirement Benefit Plans, in its financial statements using a December 31 measurement date.
Occidental’s defined benefit pension and postretirement benefit plan obligations are actuarially determined based on various assumptions and discount rates. The discount rate assumptions used are meant to reflect the interest rate at which the obligations could effectively be settled on the measurement date. Occidental estimates the rate of return on assets with regard to current market factors but within the context of historical returns. Occidental funds and expenses negotiated pension increases for domestic union employees over the terms of the applicable collective bargaining agreements.
Pension and any postretirement plan assets are measured at fair value. Common stock, preferred stock, publicly registered mutual funds, U.S. government securities and corporate bonds are valued using quoted market prices in active markets when available. When quoted market prices are not available, these investments are valued using pricing models with observable inputs from both active and non-active markets. Common and collective trusts are valued at the fund units’ NAV provided by the issuer, which represents the quoted price in a non-active market. Short-term investment funds are valued at the fund units’ NAV provided by the issuer.
SUPPLEMENTAL CASH FLOW INFORMATION
The following table represents U.S. federal, domestic state and international income taxes paid, tax refunds received and interest paid related to continuing operations during the year ended December 31, 2024, 2023 and 2022, respectively.
| millions | 2024 | 2023 | 2022 | ||||||||
| Income taxes paid | $ | 1,203 | $ | 1,299 | $ | 2,184 | |||||
| Income tax refunds received | $ | 38 | $ | 18 | $ | 89 | |||||
| Production, property and other tax payments | $ | 1,348 | $ | 1,164 | $ | 1,093 | |||||
| Interest paid (a) | $ | 1,208 | $ | 1,099 | $ | 1,425 |
(a) Net of capitalized interest of $189 million, $98 million and $69 million, for the years 2024, 2023 and 2022, respectively.
Occidental issued 29.6 million shares as a portion of the purchase price for the CrownRock Acquisition, see Note 5 -Acquisitions, Divestitures, and Other Transactions for additional details. Occidental swapped oil and gas acreage with a fair value of approximately $30 million and $120 million in non-monetary exchange transactions during the years ended December 31, 2024 and December 31, 2023, respectively.
CASH EQUIVALENTS AND RESTRICTED CASH EQUIVALENTS
Occidental considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents or restricted cash equivalents. The cash equivalents and restricted cash equivalents balance as of December 31, 2024, included investments in government money market funds in which the carrying value approximates fair value.
The following table provides a reconciliation of cash, cash equivalents, restricted cash and restricted cash equivalents as reported at the end of the period in the Consolidated Statements of Cash Flows for the year ended December 31, 2024 and 2023:
| millions | 2024 | 2023 | ||||||
| Cash and cash equivalents | $ | 2,132 | $ | 1,426 | ||||
| Restricted cash and restricted cash equivalents | 11 | 21 | ||||||
| Restricted cash and restricted cash equivalents included in long-term receivables and other assets, net | 14 | 17 | ||||||
| Cash, cash equivalents, restricted cash and restricted cash equivalents | $ | 2,157 | $ | 1,464 |
FOREIGN CURRENCY TRANSACTIONS
The functional currency applicable to all of Occidental’s international oil and gas operations is the U.S. dollar since cash flows are denominated principally in U.S. dollars. In Occidental’s other operations, Occidental’s use of non-United States dollar functional currencies was not material for all years presented. The effect of exchange rates on transactions in foreign currencies is included in periodic income. Occidental reports the exchange rate differences arising from translating foreign-currency-denominated balance sheet accounts to the United States dollar as of the reporting date in OCI. Exchange-rate gains and losses for continuing operations were not material for all years presented.
INCOME TAXES
Occidental files various U.S. federal, state and foreign income tax returns. The impact of changes in tax regulations are reflected when enacted. In general, deferred federal, state and foreign income taxes are provided on temporary differences
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between the financial statement carrying amounts of assets and liabilities and their respective tax basis. Occidental routinely assesses the realizability of its deferred tax assets. If Occidental concludes that it is more likely than not that some of the deferred tax assets will not be realized, the tax asset is reduced by a valuation allowance. Occidental recognizes a tax benefit from an uncertain tax position when it is more likely than not that the position will be sustained upon examination, based on the technical merits of the position. The tax benefit recorded is equal to the largest amount that is greater than 50% likely to be realized through final settlement with a taxing authority. Interest and penalties related to unrecognized tax benefits are recognized in income tax expense (benefit). See Note 10 - Income Taxes for more information.
LOSS CONTINGENCIES
Occidental or certain of its subsidiaries are involved, in the normal course of business, in lawsuits, claims and other legal proceedings that seek, among other things, compensation for alleged personal injury, breach of contract, property damage or other losses, punitive damages, civil penalties, or injunctive or declaratory relief. Occidental or certain of its subsidiaries also are involved in proceedings under CERCLA and similar federal, state, local and international environmental laws. These environmental proceedings seek funding or performance of remediation and, in some cases, compensation for alleged property damage, punitive damages, civil penalties, injunctive relief, and government oversight costs. Usually Occidental or such subsidiaries are among many companies in these environmental proceedings and have to date been successful in sharing response costs with other financially sound companies. Further, some lawsuits, claims and legal proceedings involve acquired or disposed assets with respect to which a third party or Occidental or its subsidiaries retains liability or indemnifies the other party for conditions that existed prior to the transaction.
In accordance with applicable accounting guidance, Occidental accrues reserves for outstanding lawsuits, claims and proceedings when it is probable that a liability has been incurred and the liability can be reasonably estimated. In Note 12 - Environmental Liabilities and Expenditures, Occidental has disclosed its reserve balances for environmental remediation matters that satisfy this criteria. See Note 13 - Lawsuits, Claims, Commitments and Contingencies.
RECENT ACCOUNTING PRONOUNCEMENTS
In December 2023, FASB issued new guidance to improve Income Tax disclosures to provide information to assess how an entity’s operations and related tax risks and tax planning and operational opportunities affect its tax rate and prospects for future cash flows. The rules become effective for annual periods beginning after December 15, 2024. The standard modifies required income tax disclosures. Occidental is currently evaluating the impact of adopting this guidance on the consolidated financial statements.
In November 2024, FASB issued new guidance to provide more detailed information about expenses. Issuers are to disclose disaggregated expenses of certain captions in tabular form. The rule becomes effective for annual periods beginning after December 15, 2024. Occidental is currently evaluating the impact of adopting this guidance on the consolidated financial statements.
| NOTE 2 - REVENUE |
Revenue from customers is recognized when obligations under the terms of a contract are satisfied; this generally occurs with the delivery of oil, NGL, gas, chemicals or services such as transportation. Revenue from customers is measured as the amount of consideration Occidental expects to receive in exchange for the delivery of goods or services. Contracts may last from one month to one year or more and may have renewal terms that extend indefinitely at the option of either party. Price is typically based on market indexes. Volumes fluctuate due to production and, in certain cases, customer demand and transportation availability. Occidental records revenue net of certain taxes, such as sales taxes, that are assessed by government authorities on Occidental’s customers.
Occidental does not incur significant costs to obtain contracts. Incidental items that are immaterial in the context of the contract are recognized as expenses. Sales of hydrocarbons and chemicals to customers are invoiced and settled on a monthly basis. Occidental is not usually subject to obligations for warranties, rebates, returns or refunds except in the case of customer incentive payments as discussed for the chemical segment below. Occidental does not typically receive payment in advance of satisfying its obligations under the terms of its sales contracts with customers; therefore, liabilities related to such payment are immaterial to Occidental. Occidental does not disclose consideration for remaining performance obligations with an original expected duration of one year or less or for variable consideration related to unsatisfied performance obligations.
OIL AND GAS SEGMENT
Revenue from oil and gas production is recognized when production is delivered and control passes to the customer. Revenues from the production of oil and gas properties in which Occidental has an interest with other producers are recognized on the basis of Occidental’s net revenue interest.
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CHEMICAL SEGMENT
Revenue from chemical product sales is recognized when control passes to the customer. Certain incentive programs may provide for payments or credits to be made to customers based on the volume of product purchased over a defined period. Customer incentives are estimated and recorded as a reduction to revenue ratably over the contract period. Such estimates are evaluated and revised as warranted. Revenue from exchange contracts is excluded from revenue from customers.
MIDSTREAM AND MARKETING SEGMENT
Revenue from pipeline and gas processing is recognized upon the completion of the transportation or processing service. Revenue from power sales is recognized upon delivery. Net marketing revenue is recognized upon completion of contract terms that are a prerequisite to payment and upon title transfer for physical deliveries. Unless the normal purchases and sales exception has been elected, net marketing revenue is classified as a derivative, reported on a net basis, recorded at fair value. Changes in fair value are reflected in net sales and excluded from revenue from customers in the table below.
DISAGGREGATION OF REVENUE FROM CONTRACTS WITH CUSTOMERS
The following table reconciles revenue from customers to total net sales for the years ended December 31:
| millions | 2024 | 2023 | 2022 | ||||||||
| Revenue from customers | $ | 27,413 | $ | 28,325 | $ | 36,234 | |||||
| All other revenues | (688) | (68) | 400 | ||||||||
| Net sales | $ | 26,725 | $ | 28,257 | $ | 36,634 |
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The table below presents Occidental's revenue from customers by segment, product and geographical area. The oil and gas segment typically sells its oil, NGL and natural gas at the lease or concession area. Chemical segment revenues are shown by geographic area based on the location of the sale. Excluding net marketing revenue, midstream and marketing segment revenues are shown by the location of sale.
| millions | United States | International | Eliminations | Total | ||||||||||
| Year ended December 31, 2024 | ||||||||||||||
| Oil and gas | ||||||||||||||
| Oil | $ | 15,604 | $ | 2,940 | $ | — | $ | 18,544 | ||||||
| NGL | 1,865 | 390 | — | 2,255 | ||||||||||
| Gas | 514 | 361 | — | 875 | ||||||||||
| Other | 29 | 2 | — | 31 | ||||||||||
| Segment total | $ | 18,012 | $ | 3,693 | $ | — | $ | 21,705 | ||||||
| Chemical | $ | 4,628 | $ | 292 | $ | — | $ | 4,920 | ||||||
| Midstream and marketing | $ | 1,240 | $ | 413 | $ | — | $ | 1,653 | ||||||
| Eliminations | $ | — | $ | — | $ | (865) | $ | (865) | ||||||
| Consolidated | $ | 23,880 | $ | 4,398 | $ | (865) | $ | 27,413 | ||||||
| Year ended December 31, 2023 | ||||||||||||||
| Oil and gas | ||||||||||||||
| Oil | $ | 14,893 | $ | 3,057 | $ | — | $ | 17,950 | ||||||
| NGL | 1,619 | 372 | — | 1,991 | ||||||||||
| Gas | 970 | 335 | — | 1,305 | ||||||||||
| Other | 36 | 2 | — | 38 | ||||||||||
| Segment total | $ | 17,518 | $ | 3,766 | $ | — | $ | 21,284 | ||||||
| Chemical | $ | 5,002 | $ | 313 | $ | — | $ | 5,315 | ||||||
| Midstream and marketing | $ | 2,216 | $ | 409 | $ | — | $ | 2,625 | ||||||
| Eliminations | $ | — | $ | — | $ | (899) | $ | (899) | ||||||
| Consolidated | $ | 24,736 | $ | 4,488 | $ | (899) | $ | 28,325 | ||||||
| Year ended December 31, 2022 | ||||||||||||||
| Oil and gas | ||||||||||||||
| Oil | $ | 17,421 | $ | 3,935 | $ | — | $ | 21,356 | ||||||
| NGL | 2,631 | 421 | — | 3,052 | ||||||||||
| Gas | 2,422 | 311 | — | 2,733 | ||||||||||
| Other | 20 | 4 | — | 24 | ||||||||||
| Segment total | $ | 22,494 | $ | 4,671 | $ | — | $ | 27,165 | ||||||
| Chemical | $ | 6,359 | $ | 379 | $ | — | $ | 6,738 | ||||||
| Midstream and marketing | $ | 3,167 | $ | 588 | $ | — | $ | 3,755 | ||||||
| Eliminations | $ | — | $ | — | $ | (1,424) | $ | (1,424) | ||||||
| Consolidated | $ | 32,020 | $ | 5,638 | $ | (1,424) | $ | 36,234 |
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| NOTE 3 - INVENTORIES |
Finished goods primarily represents oil, which is carried at the lower of weighted-average cost or net realizable value, and caustic soda and chlorine, which are valued under the LIFO method. Inventories consisted of the following as of December 31:
| millions | 2024 | 2023 | ||||||
| Raw materials | $ | 113 | $ | 115 | ||||
| Materials and supplies | 1,279 | 988 | ||||||
| Commodity inventory and finished goods | 796 | 1,027 | ||||||
| 2,188 | 2,130 | |||||||
| Revaluation to LIFO | (93) | (108) | ||||||
| Total | $ | 2,095 | $ | 2,022 |
| NOTE 4 - INVESTMENTS AND RELATED-PARTY TRANSACTIONS |
EQUITY INVESTMENTS
The following table represents significant investments in unconsolidated entities as of December 31, 2024:
| millions | % Economic Interest | Carrying amount | ||||||||||||
| WES (a) | 46.0 | % | $ | 1,850 | ||||||||||
| OxyChem Ingleside Facility | 50.0 | % | 503 | |||||||||||
| NET Power | 41.6 | % | 488 | |||||||||||
| DEL(b) | 24.5 | % | — | |||||||||||
| Other | various | 318 | ||||||||||||
| Total Investments in unconsolidated entities | $ | 3,159 | ||||||||||||
(a) In 2024, 2023, and 2022, Occidental sold 19.5 million, 5.1 million and 10.0 million of its limited partner units in WES, respectively, resulting in gains on sale of $489 million, $51 million and $62 million, respectively.
(b) Not presented in investments in unconsolidated entities is Occidental’s 24.5% ownership in DEL, which had a carrying value of $237 million and is presented in deferred credits and other liabilities - other. As a result of a refinancing transaction at DEL in November 2021, Occidental received cash distributions in excess of its investment balance. Since Occidental may be requested to provide financial support to DEL in the future, the excess distributions were recorded against the carrying amount of the equity investment and in deferred credits and other liabilities - other.
Dividends received from equity investments were $822 million, $708 million and $643 million to Occidental in 2024, 2023 and 2022, respectively. As of December 31, 2024 and 2023, cumulative undistributed earnings of equity-method investees since they were acquired were $764 million and $613 million, respectively. Excluding Occidental’s investment in NET Power and DEL, as of December 31, 2024, Occidental’s investments in equity investees exceeded the underlying equity in net assets by approximately $421 million, of which $316 million represented PP&E and equity investments with the remainder comprised of intangibles; both are subject to amortization over their estimated average lives. As of December 31, 2023, Occidental’s investments in equity investees exceeded the underlying equity in net assets by approximately $424 million, of which $371 million represented PP&E and equity investments with the remainder comprised of intangibles; both are subject to amortization over their estimated average lives.
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The following table presents the summarized financial information of its equity-method investments combined for the years ended and as of December 31:
| millions | 2024 | 2023 | 2022 | ||||||||
| Summarized Results of Operations | |||||||||||
| Revenues and other income | $ | 5,184 | $ | 4,724 | $ | 6,342 | |||||
| Costs and expenses | 3,527 | 3,753 | 4,514 | ||||||||
| Net income | $ | 1,657 | $ | 971 | $ | 1,828 | |||||
| Summarized Balance Sheet | |||||||||||
| Current assets | $ | 4,874 | $ | 4,772 | $ | 3,482 | |||||
| Non-current assets | $ | 18,151 | $ | 18,715 | $ | 15,282 | |||||
| Current liabilities | $ | 2,270 | $ | 2,547 | $ | 1,342 | |||||
| Long-term debt | $ | 9,296 | $ | 9,673 | $ | 9,512 | |||||
| Other non-current liabilities | $ | 2,504 | $ | 2,396 | $ | 1,289 | |||||
| Equity | $ | 8,955 | $ | 8,870 | $ | 6,621 |
RELATED-PARTY TRANSACTIONS
Occidental sells oil, NGL, natural gas, chemicals, power and steam to and purchases oil, NGL and chemicals from its equity method investees and other related parties. Occidental is charged service fees primarily related to gathering, processing and treatment of oil, NGL and natural gas by certain of its equity investees and other related parties. Berkshire Hathaway is a related party of Occidental due to its ownership of Occidental's common stock. Occidental has, from time to time, contracted with Berkshire Hathaway for the provision of electricity, rail and insurance. In addition, certain Berkshire Hathaway subsidiaries purchase various chemicals from OxyChem. Occidental entered into the following related-party transactions and had the following amounts due from or to its related parties for the years ended December 31:
| millions | 2024 | 2023 | 2022 | ||||||||
| Sales (a) | $ | 244 | $ | 256 | $ | 337 | |||||
| Purchases (b) | $ | 560 | $ | 722 | $ | 948 | |||||
| Services (c) | $ | 1,413 | $ | 1,155 | $ | 1,006 | |||||
| Advances and amounts due from related parties | $ | 49 | $ | 62 | $ | 40 | |||||
| Amounts due to related parties | $ | 384 | $ | 371 | $ | 306 |
(a)In 2024, 2023 and 2022 sales of Occidental-produced oil and NGL to WES accounted for 35%, 37% and 42% of related party sales, respectively.
(b)In 2024, 2023 and 2022, purchases of gas and NGL marketed on behalf of WES accounted for 5%, 22% and 24% of related party purchases, respectively, while purchases of ethylene from the OxyChem Ingleside Facility accounted for 82%, 69% and 64%, respectively, of related party purchases.
(c)In 2024, 2023 and 2022, services primarily related to fees charged by WES to gather, process and treat Occidental produced oil, NGL and natural gas.
| NOTE 5 - ACQUISITIONS, DIVESTITURES AND OTHER TRANSACTIONS |
CROWNROCK ACQUISITION
In December 2023, Occidental entered into an agreement to purchase CrownRock for total consideration of $12.4 billion, consisting of $9.4 billion of cash consideration (inclusive of certain working capital and other customary purchase price adjustments), 29.6 million shares of common stock of Occidental, and the assumption of $1.2 billion of existing debt of CrownRock. The acquisition closed August 1, 2024, adding to Occidental's oil and gas portfolio in the Permian Basin.
In connection with the CrownRock Acquisition, Occidental issued $5.0 billion of senior notes, a $2.0 billion 364-day term loan and a $2.7 billion two-year term loan.
The CrownRock Acquisition qualified as a business combination and was accounted for using the acquisition method of
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accounting. The following table summarizes the cash and common stock components of the purchase price:
| in millions of dollars and shares (except per-share price) | Total | ||||
| Cash portion of purchase price | $ | 9,100 | |||
| Closing Adjustments | |||||
| Net Working Capital and Other Purchase Price Adjustments | 254 | ||||
| Pre-closing dividends declared by Occidental | 13 | ||||
| Total Cash Purchase Price | $ | 9,367 | |||
| Total shares of Occidental common stock issued | 29.6 | ||||
| Occidental common stock share price | $ | 59.38 | |||
| Stock portion of purchase price | $ | 1,755 | |||
| Total purchase price | $ | 11,122 | |||
The following table sets forth the preliminary allocation of the acquisition consideration. Certain data necessary to complete the purchase price allocation is not yet available, including, but not limited to, final appraisals of PP&E. Occidental will finalize the purchase price allocation during the 12-month period following the acquisition date, during which time the value of the assets and liabilities may be revised as appropriate.
| in millions | August 1, 2024 | ||||
| Fair value of assets acquired: | |||||
| Cash and cash equivalents | $ | 589 | |||
| Trade receivables, net | 198 | ||||
| Other current assets | 39 | ||||
| Property, plant and equipment, oil and gas | 11,818 | ||||
| Amount attributable to assets acquired | $ | 12,644 | |||
| Fair value of liabilities acquired: | |||||
| Current maturities of long-term debt | $ | 868 | |||
| Accounts payable | 207 | ||||
| Accrued liabilities | 22 | ||||
| Long-term debt | 378 | ||||
| Asset retirement obligations | 47 | ||||
| Amount attributable to liabilities acquired | $ | 1,522 | |||
| Fair value of net assets acquired: | $ | 11,122 |
The aggregate purchase price noted above was allocated to the major categories of assets and liabilities acquired based upon their preliminary estimated fair values at the date of the acquisition. The valuation of certain assets, primarily property, was based on preliminary appraisals.
Unproved oil and gas properties were valued using a market approach based on comparable transactions for similar properties.
Proved oil and gas properties were valued using an income approach, which are considered Level 3 fair value estimates and include significant assumptions of future production and timing of production, commodity price assumptions, and operating and capital cost estimates, discounted using an 8.5% weighted average cost of capital. Taxes were based on current statutory rates. Future production and timing of production were based on internal reserves estimates and internal economic models for specific proved oil and gas assets. Price assumptions were based on a combination of market information and published industry resources adjusted for historical differentials. Price assumptions ranged from approximately $75 per barrel of oil increasing to approximately $97 per barrel of oil for the 15-year period, with an unweighted arithmetic average price of $84.79 for WTI indexed assets for the same period. Natural gas prices ranged from approximately $2.80 per Mcf to $5.10 per Mcf for the 15-year period, with an unweighted arithmetic average price of $4.34 for NYMEX based assets for the same period. Both oil and natural gas commodity prices were held flat after 2038 and were adjusted for location and quality differentials. Operating and capital cost estimates were based on current observable costs and were further escalated 2% in every period. The weighted average cost of capital was calculated based on industry peers and best approximates the cost of capital an external market participant would expect to obtain.
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The following summarizes the unaudited pro forma condensed financial information of Occidental as if the CrownRock Acquisition had occurred on January 1, 2023:
| Years ended | |||||||||||||||||||||||
| millions, except per-share amounts | 2024 | 2023 | |||||||||||||||||||||
| Revenues | $ | 28,184 | $ | 30,777 | |||||||||||||||||||
| Net income attributable to common stockholders | $ | 2,713 | $ | 4,197 | |||||||||||||||||||
| Net income attributable to common stockholders per share—basic | $ | 2.90 | $ | 4.54 | |||||||||||||||||||
| Net income attributable to common stockholders per share—diluted | $ | 2.74 | $ | 4.21 | |||||||||||||||||||
2024
During the third quarter of 2024, Occidental sold non-core assets in the Powder River Basin with near to intermediate term lease expirations and certain Delaware Basin assets in Texas and New Mexico for combined net proceeds of $769 million, subject to customary purchase price adjustments. Occidental recognized a pre-tax loss of $479 million on the asset sales. In addition, Occidental sold 19.5 million of its limited partner units in WES for proceeds of $697 million resulting in a pre-tax gain of $489 million, see Note 4 - Investments and Related-Party Transactions. Subsequent to the balance sheet date Occidental announced approximately $1.2 billion of divestitures in the first quarter of 2025.
2023
In August 2023, Occidental entered into an agreement with Carbon Engineering Ltd., its equity method investee, to purchase the remaining 68% interest not already owned by Occidental or its affiliates for total cash consideration of approximately $1.1 billion, resulting in Carbon Engineering becoming a wholly owned subsidiary of Occidental. The transaction qualified as a business combination and was accounted for using the acquisition method of accounting. Because Occidental acquired control of Carbon Engineering in the 2023 purchase, Occidental remeasured its previously held 32% equity interest at its acquisition-date fair value and recognized the resulting gain of $283 million in accordance with GAAP. The purchase price was payable in three approximately equal annual payments, with the first payment made at closing. This transaction closed on November 3, 2023, and Occidental made the first payment of $349 million. The second payment of $318 million was made in the fourth quarter of 2024, and the last payment will be made in 2025.
The purchase price was allocated to the major categories of assets and liabilities acquired based upon their estimated fair values at the date of acquisition. The valuation of intangible assets was based on inputs that are not observable in the market and thus represent Level 3 inputs. The fair value of intangible assets was derived using an income approach, with significant inputs being forecasted revenues and expenses, an anticipated growth rate, and an estimated discount rate.
Occidental allocated the preliminary purchase price to the fair value of Carbon Engineering’s assets as follows:
| millions | 2023 | ||||
| Fair value of assets acquired: | |||||
| Cash and other current assets | $ | 154 | |||
| Property, plant and equipment | 11 | ||||
| Intangible assets related to developed technology | 845 | ||||
| Goodwill | 668 | ||||
| Total fair value of assets acquired | $ | 1,678 | |||
| Fair value of liabilities acquired: | |||||
| Liabilities acquired | 110 | ||||
| Deferred tax liability | 190 | ||||
| Total liabilities assumed | $ | 300 | |||
| Fair value of previously held interest | 371 | ||||
| Total acquisition consideration | $ | 1,007 |
Throughout 2023, Occidental entered into non-monetary exchange agreements, primarily in the Permian Basin. These exchanges were recorded as acquisitions and divestitures at a total combined fair value of $120 million. The difference in the assets' net book value was treated as a recovery of cost and normal retirement, which resulted in no gain or loss being recognized.
In September 2023, Occidental sold 5.1 million limited partner units of WES for proceeds of approximately $128 million, resulting in a gain of $51 million, see Note 4 - Investments and Related-Party Transactions.
In September 2023, Occidental sold certain non-core proved and unproved properties in the Permian Basin for $202 million and recorded a gain on sale of assets of $142 million.
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2022
Throughout 2022, Occidental entered into non-monetary exchange agreements, primarily in the Permian Basin. These exchanges were recorded as acquisitions and divestitures at a total combined fair value of $340 million.
In 2022, Occidental acquired additional interests in emerging low-carbon businesses to advance its net-zero pathway for a combined net purchase price of approximately $350 million.
In the fourth quarter of 2022, Occidental acquired additional primarily producing assets in the Permian Basin for a combined net purchase price of approximately $400 million.
In January 2022, Occidental sold certain non-strategic assets in the Permian Basin for net cash proceeds of approximately $190 million. The difference in the proved assets' net book value and adjusted purchase price was treated as a normal retirement, which resulted in no gain or loss being recognized. The difference in the unproved assets' net book value and adjusted purchase price resulted in a gain on sale of approximately $123 million.
In September 2022, Occidental sold 10.0 million limited partner units of WES for proceeds of approximately $250 million, resulting in a gain of $62 million, see Note 4 - Investments and Related-Party Transactions.
DISCONTINUED OPERATIONS
As previously disclosed, on April 5, 2024, Andes and the Occidental entities named in the pending actions related to the Andes Arbitration executed a confidential final settlement in which the parties agreed to dismiss all pending legal actions. The settlement resulted in a gain of $182 million, net of taxes, in discontinued operations.
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| table of contents | FINANCIAL STATEMENTS FOOTNOTES |
| NOTE 6 - LONG-TERM DEBT |
As of December 31, 2024 and 2023, Occidental’s debt consisted of the following:
| millions | 2024 | 2023 | ||||||||||||||||||
| 2.900% senior notes due 2024 | — | 654 | ||||||||||||||||||
| 6.950% senior notes due 2024 | — | 291 | ||||||||||||||||||
| 3.450% senior notes due 2024 | — | 111 | ||||||||||||||||||
| 3.500% senior notes due 2025 | — | 137 | ||||||||||||||||||
| 5.875% senior notes due 2025 | 536 | 606 | ||||||||||||||||||
| 5.500% senior notes due 2025 | 465 | 465 | ||||||||||||||||||
| 5.550% senior notes due 2026 | 870 | 870 | ||||||||||||||||||
| 3.200% senior notes due 2026 | 182 | 182 | ||||||||||||||||||
| 3.400% senior notes due 2026 | 284 | 284 | ||||||||||||||||||
| Two-year term loan due 2026 (6.249% as of December 31, 2024) | 2,700 | — | ||||||||||||||||||
| 7.500% debentures due 2026 | 112 | 112 | ||||||||||||||||||
| 8.500% senior notes due 2027 | 489 | 489 | ||||||||||||||||||
| 3.000% senior notes due 2027 | 216 | 216 | ||||||||||||||||||
| 7.125% debentures due 2027 | 150 | 150 | ||||||||||||||||||
| 7.000% debentures due 2027 | 48 | 48 | ||||||||||||||||||
| 5.000% senior notes due 2027 | 600 | — | ||||||||||||||||||
| 6.625% debentures due 2028 | 14 | 14 | ||||||||||||||||||
| 7.150% debentures due 2028 | 232 | 232 | ||||||||||||||||||
| 7.200% senior debentures due 2028 | 82 | 82 | ||||||||||||||||||
| 6.375% senior notes due 2028 | 578 | 578 | ||||||||||||||||||
| 7.200% debentures due 2029 | 135 | 135 | ||||||||||||||||||
| 7.950% debentures due 2029 | 116 | 116 | ||||||||||||||||||
| 8.450% senior debentures due 2029 | 116 | 116 | ||||||||||||||||||
| 3.500% senior notes due 2029 | 286 | 286 | ||||||||||||||||||
| 5.200% senior notes due 2029 | 1,200 | — | ||||||||||||||||||
| Variable rate bonds due 2030 (5.710% and 5.750% as of December 31, 2024 and 2023, respectively) | 68 | 68 | ||||||||||||||||||
| 8.875% senior notes due 2030 | 1,000 | 1,000 | ||||||||||||||||||
| 6.625% senior notes due 2030 | 1,449 | 1,449 | ||||||||||||||||||
| 6.125% senior notes due 2031 | 1,143 | 1,143 | ||||||||||||||||||
| 7.500% senior notes due 2031 | 900 | 900 | ||||||||||||||||||
| 7.875% senior notes due 2031 | 500 | 500 | ||||||||||||||||||
| 5.375% senior notes due 2032 | 1,000 | — | ||||||||||||||||||
| 5.550% senior notes due 2034 | 1,200 | — | ||||||||||||||||||
| 6.450% senior notes due 2036 | 1,727 | 1,727 | ||||||||||||||||||
| Zero Coupon senior notes due 2036 | 673 | 673 | ||||||||||||||||||
| 0.000% loan due 2039 (CAD denominated) | 18 | 19 | ||||||||||||||||||
| 4.300% senior notes due 2039 | 247 | 247 | ||||||||||||||||||
| 7.950% senior notes due 2039 | 325 | 325 | ||||||||||||||||||
| 6.200% senior notes due 2040 | 737 | 737 | ||||||||||||||||||
| 4.500% senior notes due 2044 | 191 | 191 | ||||||||||||||||||
| 4.625% senior notes due 2045 | 296 | 296 | ||||||||||||||||||
| 6.600% senior notes due 2046 | 1,117 | 1,117 | ||||||||||||||||||
| (continued on next page) |
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| table of contents | FINANCIAL STATEMENTS FOOTNOTES |
| millions (continued) | 2024 | 2023 | ||||||||||||||||||
| 4.400% senior notes due 2046 | 424 | 424 | ||||||||||||||||||
| 4.100% senior notes due 2047 | 258 | 258 | ||||||||||||||||||
| 4.200% senior notes due 2048 | 304 | 304 | ||||||||||||||||||
| 4.400% senior notes due 2049 | 280 | 280 | ||||||||||||||||||
| 6.050% senior notes due 2054 | 1,000 | — | ||||||||||||||||||
| 7.730% debentures due 2096 | 58 | 58 | ||||||||||||||||||
| 7.500% debentures due 2096 | 60 | 60 | ||||||||||||||||||
| 7.250% debentures due 2096 | 5 | 5 | ||||||||||||||||||
| Total borrowings at face value | $ | 24,391 | $ | 17,955 | ||||||||||||||||
| Adjustments to book value: | ||||||||||||||||||||
| Unamortized premium, net | 1,037 | 1,152 | ||||||||||||||||||
| Debt issuance costs | (105) | (106) | ||||||||||||||||||
| Net book value of debt | $ | 25,323 | $ | 19,001 | ||||||||||||||||
| Long-term finance leases | 658 | 591 | ||||||||||||||||||
| Current finance leases | 135 | 146 | ||||||||||||||||||
| Total debt and finance leases | $ | 26,116 | $ | 19,738 | ||||||||||||||||
| Less current maturities of finance leases | (135) | (146) | ||||||||||||||||||
| Less current maturities of long-term debt | (1,003) | (1,056) | ||||||||||||||||||
| Long-term debt, net | $ | 24,978 | $ | 18,536 |
DEBT MATURITIES
As of December 31, 2024, future principal payments of debt were approximately $24.4 billion, of which $1.0 billion is due in 2025, $4.1 billion in 2026, $1.5 billion in 2027, $0.9 billion in 2028, and $16.9 billion due in 2029 and thereafter.
ZERO COUPONS
The Zero Coupons have an aggregate principal amount due at the 2036 maturity of approximately $673 million. The Zero Coupons can be put to Occidental in October of each year, in whole or in part, for the then-accreted value of the outstanding Zero Coupons. The Zero Coupons can next be put to Occidental in October 2025, which, if put in whole, would be $381 million at such date. Occidental currently has the ability to meet this obligation and may use available capacity under the RCF to satisfy the put should it be exercised.
FAIR VALUE OF DEBT
Occidental estimates the fair value of fixed-rate debt based on the quoted market prices for those instruments or on quoted market yields for similarly rated debt instruments, taking into account such instruments’ maturities. The estimated fair values of Occidental’s debt as of December 31, 2024, and 2023, the majority of which were classified as Level 1, were approximately $24.0 billion and $18.1 billion, respectively. Occidental’s exposure to changes in interest rates relates primarily to its variable-rate, long-term debt obligations. As of December 31, 2024, and 2023, variable-rate debt constituted approximately 11% and 0.4%, respectively, of Occidental’s total debt.
DEBT RATINGS
As of December 31, 2024, Occidental’s long-term debt was rated Baa3 by Moody’s Investors Service, BBB- by Fitch Ratings and BB+ by Standard and Poor’s. Any downgrade in credit ratings could impact Occidental's ability to access capital markets and increase its cost of capital. In addition, Occidental or its subsidiaries may be requested, elect to provide or in some cases be required to provide collateral in the form of cash, letters of credit, surety bonds or other acceptable support as financial assurance of their performance and payment obligations under certain contractual arrangements such as pipeline transportation contracts, oil and gas purchase contracts and certain derivative instruments; certain permits, including with respect to carbon capture, utilization and storage activities; and environmental remediation matters. Following the CrownRock Acquisition in August 2024, Occidental's current credit ratings were reaffirmed.
As of the date of this filing, Occidental had provided required financial assurances through a combination of cash, letters of credit and surety bonds and had not issued any letters of credit under the RCF or other committed facilities.
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| table of contents | FINANCIAL STATEMENTS FOOTNOTES |
DEBT ACTIVITY
In connection with the CrownRock Acquisition, Occidental issued $9.7 billion in new debt in July 2024 and assumed $1.2 billion of existing CrownRock debt in August 2024. Occidental used proceeds from divestitures and cash on hand to repay $4.5 billion of debt, which included the satisfaction and discharge of the 5.000% senior notes due 2029 that were assumed with the CrownRock Acquisition. The following table summarizes Occidental’s debt activity in 2024:
| millions | Borrowings at face value | ||||
| Total borrowings at face value as of December 31, 2023 | $ | 17,955 | |||
| Borrowings | |||||
| 364-day term loan due 2025 | $ | 2,000 | |||
| Two-year term loan due 2026 | 2,700 | ||||
| 5.000% senior notes due 2027 | 600 | ||||
| 5.200% senior notes due 2029 | 1,200 | ||||
| 5.375% senior notes due 2032 | 1,000 | ||||
| 5.550% senior notes due 2034 | 1,200 | ||||
| 6.050% senior notes due 2054 | 1,000 | ||||
| Total borrowings | $ | 9,700 | |||
| Debt assumptions related to CrownRock | |||||
| 5.625% senior notes due 2025 | $ | 868 | |||
| 5.000% senior notes due 2029 | 376 | ||||
| Total debt assumptions | $ | 1,244 | |||
| Repayments | |||||
| 6.950% senior notes due 2024 | $ | (291) | |||
| 3.450% senior notes due 2024 | (111) | ||||
| 2.900% senior notes due 2024 | (654) | ||||
| 364-day term loan due 2025 | (2,000) | ||||
| 5.625% senior notes due 2025 | (868) | ||||
| 5.875% senior notes due 2025 | (70) | ||||
| 3.500% senior notes due 2025 | (137) | ||||
| 5.000% senior notes due 2029 | (376) | ||||
| Total repayments | $ | (4,507) | |||
| Foreign currency revaluation on CAD denominated debt | $ | (1) | |||
| Total borrowings at face value as of December 31, 2024 | $ | 24,391 |
REVOLVING CREDIT FACILITY
In February 2024, Occidental entered into a Third Amended and Restated Credit Agreement for the RCF extending its maturity date to June 30, 2028. In May 2024, Occidental amended the RCF to add an additional $150 million commitment, increasing the borrowing capacity to $4.15 billion. The interest rate margin and the facility fee rates are subject to adjustments based on Occidental’s performance on specified sustainability target thresholds with respect to absolute reductions in GHG emissions from its worldwide operated assets. No amounts were drawn under the facility as of December 31, 2024.
Borrowings under the RCF bear interest at SOFR benchmark rates, plus a margin based on Occidental’s senior debt ratings. The facility has similar terms to other debt agreements and does not contain material adverse change clauses or debt ratings triggers that could restrict Occidental’s ability to borrow, or that would permit lenders to terminate their commitments or accelerate debt repayment. The facility provides for the termination of loan commitments and requires immediate repayment of any outstanding amounts if certain events of default occur. As of the date of this filing, Occidental had no drawn amounts under the RCF. In 2024, Occidental paid average annual facility fees of 0.20% on the total commitment amount.
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| table of contents | FINANCIAL STATEMENTS FOOTNOTES |
RECEIVABLES SECURITIZATION FACILITY
In July 2024, Occidental amended and extended its existing receivables securitization facility to July 30, 2027. In February 2023, Occidental amended the facility to expand its available borrowing capacity to $600 million. As of December 31, 2024, the facility had $600 million of available borrowing capacity and no drawn amounts. The amended facility includes adjustments based on the same specified sustainability target thresholds as contained in the RCF.
| NOTE 7 - LEASE COMMITMENTS |
Lease assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Lease assets include the discounted value of future lease payments, upfront payments and costs incurred to execute the lease and are amortized on a straight-line basis over the lease term. Occidental assesses the likelihood of exercising renewal, termination and purchase options to determine the lease term. Occidental uses its incremental borrowing rate at commencement date to determine the present value of lease payments. For assets except drilling rigs, Occidental does not separate lease and non-lease components as the non-lease portions are not significant.
Occidental has operating leases for office space of $309 million, drilling rigs of $252 million, compressors of $214 million, railcars of $101 million, and $112 million of other assets.
Occidental’s finance leases include compressors of $467 million, office space of $231 million, and $95 million of other assets. Property, plant and equipment included $777 million of finance lease assets as of December 31, 2024.
The following summarizes maturities of lease liabilities as of December 31, 2024:
| millions | Operating Leases (a) | Finance Leases (b) | Total | ||||||||
| 2025 | $ | 410 | $ | 172 | $ | 582 | |||||
| 2026 | 264 | 161 | 425 | ||||||||
| 2027 | 136 | 145 | 281 | ||||||||
| 2028 | 76 | 115 | 191 | ||||||||
| 2029 | 58 | 82 | 140 | ||||||||
| Thereafter | 137 | 265 | 402 | ||||||||
| Total lease payments | 1,081 | 940 | 2,021 | ||||||||
| Less: Discount | (93) | (147) | (240) | ||||||||
| Total lease liabilities | $ | 988 | $ | 793 | $ | 1,781 |
(a)The weighted-average remaining lease term is 4.0 years and the weighted-average discount rate is 4.77%.
(b)The weighted-average remaining lease term is 5.7 years and the weighted-average discount rate is 4.80%.
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| table of contents | FINANCIAL STATEMENTS FOOTNOTES |
The following tables present Occidental’s total lease cost and other information for operating and finance lease liabilities for the years ended December 31:
| millions | 2024 | 2023 | ||||||
| Lease Cost | ||||||||
| Finance lease cost: | ||||||||
| Amortization of right-of-use assets | $ | 152 | $ | 126 | ||||
| Interest on lease liabilities | 36 | 27 | ||||||
| Operating lease cost | 518 | 398 | ||||||
| Short-term lease cost | 367 | 460 | ||||||
| Total lease cost | $ | 1,073 | $ | 1,011 | ||||
| millions | 2024 | 2023 | ||||||
| Cash payments related to leases | ||||||||
| Operating cash flows from finance leases | $ | 34 | $ | 27 | ||||
| Operating cash flows from operating leases | $ | 298 | $ | 198 | ||||
| Investing cash flows from operating leases | $ | 209 | $ | 183 | ||||
| Financing cash flows from finance leases | $ | 137 | $ | 105 | ||||
| Changes in Right-of-Use assets | ||||||||
| Right-of-use assets obtained in exchange for new finance lease liabilities | $ | 195 | $ | 226 | ||||
| Right-of-use assets obtained in exchange for new operating lease liabilities | $ | 316 | $ | 630 |
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| table of contents | FINANCIAL STATEMENTS FOOTNOTES |
| NOTE 8 - DERIVATIVES |
OBJECTIVE AND STRATEGY
Occidental uses a variety of derivative financial instruments and physical contracts to manage its exposure to commodity price fluctuations and transportation commitments and to fix margins on the future sale of stored commodity volumes. Derivatives are carried at fair value and on a net basis when a legal right of offset exists with the same counterparty. Occidental may occasionally use a variety of derivative financial instruments to manage its exposure to foreign currency fluctuations and interest rate risks. Occidental also enters into derivative financial instruments for trading purposes.
Occidental may elect normal purchases and normal sales exclusions when physically delivered commodities are purchased from a vendor or sold to a customer. Occidental occasionally applies cash flow hedge accounting treatment to derivative financial instruments to lock in margins on the forecasted sales of its natural gas storage volumes. The value of cash flow hedges was insignificant for all periods presented. See Note 1 - Summary of Significant Accounting Policies for Occidental’s accounting policy on derivatives.
DERIVATIVES NOT DESIGNATED AS HEDGING INSTRUMENTS
As of December 31, 2024, Occidental’s derivatives not designated as hedges consisted of marketing derivatives. All interest rate swaps were settled prior to December 31, 2023.
Derivative instruments that are not designated as hedging instruments are required to be recorded on the balance sheet at fair value. Changes in fair value will impact Occidental’s earnings through mark-to-market adjustments until the physical commodity is delivered or the financial instrument is settled.
MARKETING DERIVATIVES
Occidental’s marketing derivative instruments not designated as hedges are short-duration physical and financial forward contracts. A substantial majority of Occidental’s physically settled derivative contracts are index-based and carry no mark-to-market valuation in earnings. As of December 31, 2024, the weighted-average settlement prices of these forward contracts were $71.07 per barrel and $3.50 per Mcf for crude oil and natural gas, respectively. The weighted-average settlement prices were $76.36 per barrel and $2.62 per Mcf for crude oil and natural gas, respectively, as of December 31, 2023. Net gains and losses associated with marketing derivative instruments not designated as hedging instruments are recognized currently in net sales. Derivative settlements and collateralization are classified as cash flows from operating activities unless the derivatives contain an other-than-insignificant financing element, in which case the settlements and collateralization are classified as cash flows from financing activities.
The following table summarizes net short volumes associated with the outstanding marketing commodity derivatives as of December 31:
| 2024 | 2023 | |||||||
| Oil commodity contracts | ||||||||
| Volume (MMbbl) | (34) | (20) | ||||||
| Natural gas commodity contracts | ||||||||
| Volume (Bcf) | (130) | (113) |
FAIR VALUE OF DERIVATIVES
Occidental has categorized its assets and liabilities that are measured at fair value in a three-level fair value hierarchy, based on the inputs to the valuation techniques: Level 1 – using quoted prices in active markets for the assets or liabilities; Level 2 – using observable inputs other than quoted prices for the assets or liabilities; and Level 3 – using unobservable inputs. Transfers between levels, if any, are reported at the end of each reporting period. The following table presents the fair values of Occidental’s outstanding derivatives. Fair values are presented at gross amounts below, including when derivatives are subject to netting arrangements, and are presented on a net basis in the Consolidated Balance Sheets.
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| table of contents | FINANCIAL STATEMENTS FOOTNOTES |
| millions | Fair Value Measurements Using | Total Fair Value | |||||||||||||||
| Balance Sheet Classification | Level 1 | Level 2 | Level 3 | Netting (a) | |||||||||||||
| December 31, 2024 | |||||||||||||||||
| Marketing Derivatives | |||||||||||||||||
| Other current assets | $ | 455 | $ | 92 | $ | — | $ | (512) | $ | 35 | |||||||
| Other long-term assets | — | 1 | — | (1) | — | ||||||||||||
| Accrued liabilities | (451) | (90) | — | 512 | (29) | ||||||||||||
| Deferred credits and other liabilities - other | — | (2) | — | 1 | (1) | ||||||||||||
| December 31, 2023 | |||||||||||||||||
| Marketing Derivatives | |||||||||||||||||
| Other current assets | $ | 1,008 | $ | 100 | $ | — | $ | (1,009) | $ | 99 | |||||||
| Other long-term assets | 47 | 1 | — | (43) | 5 | ||||||||||||
| Accrued liabilities | (967) | (64) | — | 1,009 | (22) | ||||||||||||
| Deferred credits and other liabilities - other | (43) | (6) | — | 43 | (6) | ||||||||||||
(a)These amounts do not include collateral. Occidental netted $12 million of collateral received from brokers against derivative assets and $9 million of collateral deposited with brokers against derivatives liabilities as of December 31, 2024. As of December 31, 2023, Occidental netted $42 million of collateral received from brokers against derivative assets and no collateral deposited with brokers against derivative liabilities.
GAINS AND LOSSES ON DERIVATIVES
The following table presents gains and (losses) related to Occidental’s derivative instruments in the Consolidated Statements of Operations for the years ended December 31:
| millions | ||||||||||||||||||||||||||||||||
| Income Statement Classification | 2024 | 2023 | 2022 | |||||||||||||||||||||||||||||
| Marketing Derivatives | ||||||||||||||||||||||||||||||||
| Net sales (a) | (374) | (74) | 381 | |||||||||||||||||||||||||||||
| Interest Rate Swaps | ||||||||||||||||||||||||||||||||
| Gains on interest rate swaps, net (b) | — | — | 317 |
(a)Included derivative and non-derivative marketing activity.
(b)Occidental retired all remaining outstanding interest rate swaps on or before December 31, 2022.
CREDIT RISK
The majority of Occidental’s counterparty credit risk is related to the physical delivery of energy commodities to its customers and any inability to meet their settlement commitments. Occidental manages credit risk by selecting counterparties that it believes to be financially strong, by entering into netting arrangements with counterparties and by requiring collateral or other credit risk mitigants, as appropriate. Occidental actively evaluates the creditworthiness of its counterparties, assigns appropriate credit limits and monitors credit exposures against those assigned limits. Occidental also enters into futures contracts through regulated exchanges with select clearinghouses and brokers, which are subject to minimal credit risk, if any.
| NOTE 9 - FAIR VALUE MEASUREMENTS |
FAIR VALUES – NONRECURRING
In 2024, Occidental recorded a pre-tax impairment of $334 million related to certain wells in the Gulf of America whose future net cash inflows did not indicate that the asset value is recoverable.
In 2023, Occidental recorded a pre-tax impairment of $180 million related to undeveloped acreage in the northern non-core area of the Powder River Basin where Occidental has decided not to pursue future exploration and appraisal activities. Impairment expense also included a $29 million impairment related to an equity method investment in Black Butte Coal Company.
There were no significant non-recurring fair value measurements in 2022.
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| table of contents | FINANCIAL STATEMENTS FOOTNOTES |
FINANCIAL INSTRUMENTS FAIR VALUE
The carrying amounts of cash, cash equivalents, restricted cash, restricted cash equivalents and other financial instruments, other than fixed-rate debt, approximate fair value. See Note 6 - Long-Term Debt for the fair value of long-term debt.
| NOTE 10 - INCOME TAXES |
LEGAL ENTITY REORGANIZATION
To align Occidental’s legal entity structure with the nature of its business activities after completing the acquisition of Anadarko and subsequent large scale post-acquisition divestiture programs, management undertook a legal entity reorganization that was completed in 2022.
As a result of this legal entity reorganization, management made an adjustment to the tax basis in a portion of its operating assets, thus reducing Occidental’s deferred tax liabilities. Accordingly, in 2022, Occidental recorded a tax benefit of $2.7 billion in connection with this reorganization. The timing of any reduction in Occidental’s future cash taxes as a result of this legal entity reorganization will be dependent on a number of factors, including prevailing commodity prices, capital activity level and production mix. The legal entity reorganization transaction is currently under IRS review as part of the Company’s 2022 federal tax audit.
INFLATION REDUCTION ACT
In August 2022, Congress passed the IRA that contains, among other provisions, certain tax incentives related to climate change and clean energy. Since the enactment of the IRA, the Treasury has released a substantial amount of regulatory and sub-regulatory guidance. However, much of this guidance remains unfinalized, and significant questions persist regarding its application. In January 2025, the Trump Administration issued an executive order that pauses the disbursement of funds appropriated under the IRA. The ultimate impact of the IRA on Occidental’s businesses depends on several factors, including the Treasury's statutory interpretations in the final regulatory guidance pending issuance and potential changes to the IRA incentives in future tax legislation.
PILLAR TWO
Approximately 140 countries have agreed to support the OECD Pillar Two initiative that proposes to apply a 15% global minimum tax on multinational entities, applied jurisdiction-by-jurisdiction. Several countries, including European Union member states, Canada, and Oman, have enacted or are in the process of enacting legislation aligned with all, or portions of, Pillar Two. Widespread implementation of Pillar Two is anticipated in 2025.
As the legislation becomes effective in countries in which Occidental operates, the Company’s cash tax could increase, and its effective tax rate could be negatively impacted. In January 2025, the Trump Administration issued an executive order indicating that any commitments made by the prior U.S. administration regarding Pillar Two “have no force or effect in the United States”. The order also suggested the U.S. will consider retaliatory measures against countries that attempt to apply extraterritorial taxes on U.S. companies.
Occidental will continue to monitor the developments in the U.S., in addition to the status of legislation and guidance issued by both the OECD and the jurisdictions in which the Company operates, to assess the impact on the Company’s tax position. Occidental does not expect the global minimum tax provisions to have a material impact on its results of operations, financial position, or cash flows.
The following summarizes domestic and foreign components of income from continuing operations before domestic and foreign income taxes for the years ended December 31:
| millions | 2024 | 2023 | 2022 | ||||||||
| Domestic | $ | 2,398 | $ | 4,246 | $ | 11,314 | |||||
| Foreign | 1,672 | 2,183 | 2,803 | ||||||||
| Total income from continuing operations before income taxes | $ | 4,070 | $ | 6,429 | $ | 14,117 |
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| table of contents | FINANCIAL STATEMENTS FOOTNOTES |
The following summarizes components of income tax (expense) benefit on continuing operations for the years ended December 31:
| millions | 2024 | 2023 | 2022 | ||||||||
| Current | |||||||||||
| Federal | $ | (956) | $ | (871) | $ | (1,272) | |||||
| State and local | (50) | (92) | (105) | ||||||||
| Foreign | (629) | (713) | (1,080) | ||||||||
| Total current tax expense | $ | (1,635) | $ | (1,676) | $ | (2,457) | |||||
| Deferred | |||||||||||
| Federal | 389 | (37) | 1,569 | ||||||||
| State and local | 28 | 25 | 57 | ||||||||
| Foreign | 44 | (45) | 18 | ||||||||
| Total deferred tax (expense) benefit | $ | 461 | $ | (57) | $ | 1,644 | |||||
| Total income tax expense | $ | (1,174) | $ | (1,733) | $ | (813) |
The following reconciliation of the U.S. federal statutory income tax rate to Occidental’s worldwide effective tax rate on income from continuing operations for the years ended December 31 is stated as a percentage of income from continuing operations before income taxes:
| 2024 | 2023 | 2022 | |||||||||
| U.S. federal statutory tax rate | 21 | % | 21 | % | 21 | % | |||||
| Legal entity reorganization | — | — | (18) | ||||||||
| Tax impact from foreign operations | 5 | 3 | 3 | ||||||||
| State income taxes, net of federal benefit | — | 1 | — | ||||||||
| Uncertain tax positions | 3 | 2 | — | ||||||||
| Other | — | — | — | ||||||||
| Worldwide effective tax rate | 29 | % | 27 | % | 6 | % |
In 2024 and 2023, Occidental’s worldwide effective tax rate was higher than the U.S. statutory rate of 21%, primarily driven by Occidental's jurisdictional mix of income, where international income is subject to tax at statutory rates as high as 55%.
In 2022, Occidental’s worldwide effective tax rate was 6%, which was lower than the U.S. statutory rate of 21% and primarily driven by a tax benefit associated with Occidental's legal entity reorganization, as described above, partially offset by higher tax rates in the foreign jurisdictions in which Occidental operates.
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| table of contents | FINANCIAL STATEMENTS FOOTNOTES |
The tax effects of temporary differences resulting in deferred income taxes as of December 31:
| millions | 2024 | 2023 | ||||||
| Deferred tax liabilities | ||||||||
| Property, plant and equipment differences | $ | (7,100) | $ | (6,994) | ||||
| Equity investments, partnerships and international subsidiaries | (633) | (709) | ||||||
| Gross long-term deferred tax liabilities | (7,733) | (7,703) | ||||||
| Deferred tax assets | ||||||||
| Environmental reserves | 416 | 223 | ||||||
| Postretirement benefit accruals | 249 | 229 | ||||||
| Deferred compensation and benefits | 258 | 237 | ||||||
| Asset retirement obligations | 788 | 722 | ||||||
| Foreign tax credit carryforwards | 1,975 | 2,759 | ||||||
| Business credit carryforwards | 54 | 43 | ||||||
| Net operating loss carryforward | 1,031 | 1,056 | ||||||
| Interest expense carryforward | 11 | 11 | ||||||
| All other | 539 | 586 | ||||||
| Gross long-term deferred tax assets | 5,321 | 5,866 | ||||||
| Valuation allowance | (2,962) | (3,901) | ||||||
| Net long-term deferred tax assets | $ | 2,359 | $ | 1,965 | ||||
| Total deferred income tax liability, net | $ | (5,374) | $ | (5,738) | ||||
| Less: foreign deferred tax asset in long-term receivables and other assets, net | (20) | (26) | ||||||
| Total deferred income tax liability | $ | (5,394) | $ | (5,764) |
Total deferred tax assets, after valuation allowances, were $2.4 billion and $2.0 billion as of December 31, 2024 and 2023, respectively. Occidental expects to realize the recorded deferred tax assets, net of any allowances, through future operating income and reversal of temporary differences. The total deferred tax liabilities were $7.7 billion as of December 31, 2024 and 2023.
As of December 31, 2024, Occidental had foreign tax credit carryforwards of $2.0 billion and state tax credit carryforwards of $38 million. Occidental had recorded a valuation allowance for $2.0 billion of the foreign tax credit carryforwards and $32 million of the state tax credit carryforwards.
As of December 31, 2024, Occidental had tax-effected foreign net operating loss carryforwards of $838 million, state net operating loss carryforwards of $190 million, and federal net operating loss carryforwards of $3 million. The carryforward balances have varying carryforward periods through 2044, excluding certain attributes for which there is an indefinite carryforward period. A valuation allowance was recorded for $774 million of the tax-effected foreign net operating loss carryforwards and $153 million of the tax-effected state net operating loss carryforwards. Occidental had an additional valuation allowance of $25 million against other foreign deferred tax assets. In 2024, the Company evaluated its operations in foreign jurisdictions that maintained deferred tax assets offset with a full valuation allowance. Based on this assessment, the Company determined that $149 million of these deferred tax assets had a remote likelihood of recovery due to the lack of current or planned operating activity. Consequently, the Company reversed both the deferred tax assets and the associated valuation allowance in 2024.
Occidental had a tax-effected state interest expense carryforward of $11 million with no valuation allowance as of December 31, 2024.
A deferred tax liability had not been recognized for temporary differences related to unremitted earnings of certain consolidated international subsidiaries aggregating approximately $406 million as of December 31, 2024, as it is Occidental’s intention to reinvest such earnings indefinitely. If the earnings of these international subsidiaries were not indefinitely reinvested, an additional deferred tax liability of approximately $109 million would be required.
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| table of contents | FINANCIAL STATEMENTS FOOTNOTES |
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
| millions | 2024 | 2023 | 2022 | ||||||||
| Balance as of January 1 | $ | 1,951 | $ | 2,010 | $ | 2,026 | |||||
| Increases related to prior-year positions | — | — | 2 | ||||||||
| Increases related to current-year positions | — | — | — | ||||||||
| Settlements | — | — | — | ||||||||
| Reductions for tax positions of prior years | — | (59) | (18) | ||||||||
| Balance as of December 31 | $ | 1,951 | $ | 1,951 | $ | 2,010 |
The December 31, 2024 balance of unrecognized tax benefits of $2.0 billion included potential benefits of $2.0 billion of which, if recognized, $1.5 billion would affect the effective tax rate on income. Also included were benefits of $45 million related to tax positions for which the ultimate deductibility is highly certain, but the timing of such deductibility is uncertain. Unrecognized tax benefits are included in deferred credits and other liabilities - other. Occidental records estimated potential interest and penalties related to liabilities for unrecognized tax benefits in the provisions for domestic and foreign income taxes. In 2024, Occidental recorded interest related to liabilities for unrecognized tax benefits of $186 million, for a cumulative accrued interest related to liabilities for unrecognized tax benefits of $763 million as of December 31, 2024. There were no penalties associated with liabilities for unrecognized tax benefits recorded for the years ended December 31, 2024 and 2023. Over the next 12 months, it is reasonably possible that the total amount of unrecognized tax benefits could decrease by an estimated $9 million due to settlements with taxing authorities or lapses in statutes of limitation.
Occidental recognized $30 million and $79 million in federal and state income tax receivables as of December 31, 2024 and 2023, respectively, which were recorded in other current assets. In addition, Occidental recognized $247 million and $31 million in 2024 and 2023, respectively, of long-term income tax receivables, which were recorded in long-term receivables and other assets, net.
Occidental is subject to audit by various tax authorities in varying periods. See Note 13 - Lawsuits, Claims, Commitments and Contingencies for a discussion of these matters.
| NOTE 11 - RETIREMENT AND POSTRETIREMENT BENEFIT PLANS |
Occidental has various defined contribution and defined benefit plans for its salaried, domestic union and nonunion hourly and certain foreign national employees. In addition, Occidental also provides medical and other benefits for certain active, retired and disabled employees and their eligible dependents.
DEFINED CONTRIBUTION PLANS
All domestic employees and certain foreign national employees are eligible to participate in one or more of the defined contribution retirement or savings plans that provide for periodic contributions by Occidental based on plan-specific criteria, such as base pay, level and employee contributions. Certain salaried employees participate in a supplemental retirement plan that restores benefits lost due to government limitations on qualified retirement benefits. The accrued liabilities for the supplemental retirement plan were $387 million and $330 million as of December 31, 2024 and 2023, respectively. In 2024, 2023 and 2022 Occidental expensed $252 million, $221 million and $202 million, respectively, under the provisions of these defined contribution and supplemental retirement plans.
DEFINED BENEFIT PLANS
Participation in defined benefit plans is limited. Approximately 300 domestic and 300 foreign national employees, mainly union, nonunion hourly and certain employees that joined Occidental from acquired operations with grandfathered benefits, are currently accruing benefits under these plans.
Pension costs for Occidental’s defined benefit pension plans, determined by independent actuarial valuations, are generally funded by payments to trust funds, which are administered by independent trustees.
POSTRETIREMENT AND OTHER BENEFIT PLANS
Occidental provides medical and dental benefits and life insurance coverage for certain active, retired and disabled employees and their eligible dependents. Occidental generally funds the benefits as they are paid during the year. In 2024, 2023 and 2022, these benefit costs, including the postretirement costs, were $205 million, $175 million and $211 million, respectively.
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OBLIGATIONS AND FUNDED STATUS
The following tables show the amounts recognized in Occidental’s Consolidated Balance Sheets related to its pension and postretirement benefit plans as of December 31:
| Pension Benefits | Postretirement Benefits | |||||||||||||
| millions | 2024 | 2023 | 2024 | 2023 | ||||||||||
| Amounts recognized in the Consolidated Balance Sheet: | ||||||||||||||
| Other long-term assets | $ | 133 | $ | 126 | $ | — | $ | — | ||||||
| Accrued liabilities | (2) | (3) | (52) | (57) | ||||||||||
| Deferred credits and other liabilities — pension and postretirement obligations | (244) | (270) | (778) | (661) | ||||||||||
| $ | (113) | $ | (147) | $ | (830) | $ | (718) | |||||||
| Accumulated other comprehensive loss included the following after-tax balances: | ||||||||||||||
| Net (gain) loss | $ | (8) | $ | 3 | $ | (122) | $ | (217) | ||||||
| Prior service credit | — | — | (40) | (45) | ||||||||||
| $ | (8) | $ | 3 | $ | (162) | $ | (262) |
The following tables show the funding status, obligations and plan asset fair values of Occidental related to its pension and postretirement benefit plans for the years ended December 31:
| Pension Benefits | Postretirement Benefits | |||||||||||||
| millions | 2024 | 2023 | 2024 | 2023 | ||||||||||
| Changes in the benefit obligation: | ||||||||||||||
| Benefit obligation — beginning of year | $ | 879 | $ | 886 | $ | 718 | $ | 773 | ||||||
| Service cost — benefits earned during the period | 4 | 5 | 18 | 16 | ||||||||||
| Interest cost on projected benefit obligation | 42 | 45 | 35 | 37 | ||||||||||
| Actuarial (gain) loss | (38) | 19 | 105 | (53) | ||||||||||
| Benefits paid | (71) | (80) | (50) | (65) | ||||||||||
| Other | (3) | 4 | 4 | 10 | ||||||||||
| Benefit obligation — end of year | $ | 813 | $ | 879 | $ | 830 | $ | 718 | ||||||
| Changes in plan assets: | ||||||||||||||
| Fair value of plan assets — beginning of year | $ | 732 | $ | 641 | $ | — | $ | — | ||||||
| Actual return on plan assets | 16 | 77 | — | — | ||||||||||
| Employer contributions | 23 | 89 | 45 | 54 | ||||||||||
| Benefits paid | (71) | (80) | (50) | (64) | ||||||||||
| Other | — | 5 | 5 | 10 | ||||||||||
| Fair value of plan assets — end of year | $ | 700 | $ | 732 | $ | — | $ | — | ||||||
| Unfunded status: | $ | (113) | $ | (147) | $ | (830) | $ | (718) |
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Actuarial losses related to postretirement benefits are primarily due to changes in health care trend rates and expected increases in premiums related to certain provisions in the Inflation Reduction Act that go into effect in 2025 and 2026. Other actuarial gains and losses are primarily driven by discount rate movement.
The following table sets forth details of the obligations and assets of Occidental’s defined benefit pension plans for the years ended December 31:
| Accumulated Benefit Obligation in Excess of Plan Assets | Plan Assets in Excess of Accumulated Benefit Obligation | |||||||||||||
| millions | 2024 | 2023 | 2024 | 2023 | ||||||||||
| Projected benefit obligation | $ | 648 | $ | 719 | $ | 165 | $ | 160 | ||||||
| Accumulated benefit obligation | $ | 647 | $ | 717 | $ | 165 | $ | 157 | ||||||
| Fair value of plan assets | $ | 505 | $ | 543 | $ | 195 | $ | 189 |
COMPONENTS OF NET PERIODIC BENEFIT COSTS
The following table sets forth the components of net periodic benefit costs for the years ended December 31:
| Pension Benefits | Postretirement Benefits | |||||||||||||||||||
| millions | 2024 | 2023 | 2022 | 2024 | 2023 | 2022 | ||||||||||||||
| Net periodic benefit costs: | ||||||||||||||||||||
| Service cost — benefits earned during the period | $ | 4 | $ | 5 | $ | 7 | $ | 18 | $ | 16 | $ | 38 | ||||||||
| Interest cost on projected benefit obligation | 42 | 45 | 36 | 35 | 37 | 33 | ||||||||||||||
| Expected return on plan assets | (41) | (45) | (38) | — | — | — | ||||||||||||||
| Recognized actuarial loss (gain) | 2 | 4 | 1 | (15) | (20) | 5 | ||||||||||||||
| Recognized prior service credit | — | — | — | (8) | (9) | (9) | ||||||||||||||
| Gain (loss) due to settlement | — | 1 | (1) | — | — | — | ||||||||||||||
| Net periodic benefit costs | $ | 7 | $ | 10 | $ | 5 | $ | 30 | $ | 24 | $ | 67 |
The service cost component of net periodic benefit costs is included in selling, general and administrative expense, oil and gas operating expense, chemical and midstream costs and exploration expense on Occidental’s Consolidated Statements of Operations. All other components of net periodic benefit costs are included in other operating and non-operating expense.
ADDITIONAL INFORMATION
The following table sets forth the weighted-average assumptions used to determine Occidental’s benefit obligation and net periodic benefit cost for domestic plans for the years ended December 31:
| Pension Benefits | Postretirement Benefits | |||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||
| Benefit Obligation Assumptions: | ||||||||||||||
| Discount rate | 5.52 | % | 4.98 | % | 5.68 | % | 5.12 | % | ||||||
| Rate of increase in compensation levels | 3.95 | % | 3.96 | % | — | — | ||||||||
| Net Periodic Benefit Cost Assumptions: | ||||||||||||||
| Discount rate | 4.98 | % | 5.27 | % | 5.12 | % | 5.43 | % | ||||||
| Rate of increase in compensation levels | 3.96 | % | 3.95 | % | — | — | ||||||||
| Assumed long-term rate of return on assets | 6.13 | % | 6.65 | % | — | — |
For domestic pension plans and postretirement benefit plans, Occidental based the discount rate on a AA-AAA Universe yield curve in 2024 and 2023. The assumed long-term rate of return on assets is estimated with regard to current market factors but within the context of historical returns for the asset mix that exists at year end. Assumed rates of compensation increases for active participants in certain plans vary by age group.
The postretirement benefit obligation was determined by application of the terms of medical and dental benefits and life insurance coverage, including the effect of established maximums on covered costs, together with relevant actuarial assumptions and health care cost trend rates. Health care cost trend rates for Medicare advantaged prescription drug plans
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are 7.7% starting in 2024, then grading down to 4.5% in 2032 and beyond. Health care cost trend rates used for non-medicare advantaged prescription drug plans are 5.5% to 5.7% in 2024, then grading down to 4.5% in 2032 and beyond.
The actuarial assumptions used could change in the near term as a result of changes in expected future trends and other factors that, depending on the nature of the changes, could cause increases or decreases in the plan assets and liabilities.
FAIR VALUE OF PENSION PLAN ASSETS
Qualified defined benefit plan assets are monitored by Occidental’s Pension and Retirement Trust and Investment Committee in its role as a fiduciary. The Investment Committee selects and employs various external professional investment management firms to manage specific investments across the spectrum of asset classes. The Investment Committee employs a liability driven investment approach that uses a diversified blend of investments (equity securities, fixed-income securities, and alternative investments) along a glide path to optimize the long-term return of plan assets relative to plan liabilities, at a prudent level of risk. Equity investments are diversified across U.S. and non-U.S. stocks, as well as differing styles and market capitalizations. Investment performance is measured and monitored on an ongoing basis through quarterly investment portfolio and manager guideline compliance reviews, annual liability measurements and periodic studies.
The fair values of Occidental’s pension plan assets by asset category were as follows:
| millions | Level 1 | Level 2 | Level 3 | Total | ||||||||||
| December 31, 2024 | ||||||||||||||
| Asset Class: | ||||||||||||||
| Government securities | $ | 33 | $ | — | $ | — | $ | 33 | ||||||
| Corporate bonds (a) | — | 17 | — | 17 | ||||||||||
| Equity securities (b) | 31 | — | — | 31 | ||||||||||
| Other | 2 | 41 | — | 43 | ||||||||||
| Investments measured at fair value | $ | 66 | $ | 58 | $ | — | $ | 124 | ||||||
| Investments measured at net asset value (c) | — | — | — | 576 | ||||||||||
| Total pension plan assets | $ | 66 | $ | 58 | $ | — | $ | 700 | ||||||
| December 31, 2023 | ||||||||||||||
| Asset Class: | ||||||||||||||
| Government securities | $ | 42 | $ | — | $ | — | $ | 42 | ||||||
| Corporate bonds (a) | — | 19 | — | 19 | ||||||||||
| Equity securities (b) | 33 | — | — | 33 | ||||||||||
| Other | — | 47 | — | 47 | ||||||||||
| Investments measured at fair value | $ | 75 | $ | 66 | $ | — | $ | 141 | ||||||
| Investments measured at net asset value (c) | — | — | — | 591 | ||||||||||
| Total pension plan assets | $ | 75 | $ | 66 | $ | — | $ | 732 |
(a)This category represents investment grade bonds of U.S. and non-U.S. issuers from diverse industries.
(b)This category represents direct investments in mutual funds and common and preferred stocks from diverse U.S. and non-U.S. industries.
(c)Certain investments measured at fair value using the NAV per share (or its equivalent) have not been categorized in the fair value hierarchy. Amounts presented in this table are intended to reconcile the fair value hierarchy to the pension plan assets.
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Occidental expects to contribute approximately $29 million to its defined benefit pension plans during 2025.
Estimated future benefit payments, which reflect expected future service, as appropriate, are as follows for the years ended December 31:
| millions | Pension Benefits | Postretirement Benefits | ||||||||||||
| 2025 | $ | 73 | $ | 54 | ||||||||||
| 2026 | 68 | 56 | ||||||||||||
| 2027 | 70 | 60 | ||||||||||||
| 2028 | 65 | 59 | ||||||||||||
| 2029 | 62 | 58 | ||||||||||||
| 2030 - 2034 | 295 | 293 |
| NOTE 12 - ENVIRONMENTAL LIABILITIES AND EXPENDITURES |
Occidental and its subsidiaries and their respective operations are subject to numerous federal, state, local and international laws and regulations related to improving or maintaining environmental quality. The laws that require or address environmental remediation, including CERCLA and similar federal, state, local and international laws, may apply retroactively and regardless of fault, the legality of the original activities or the current ownership or control of sites. Occidental or certain of its subsidiaries participate in or actively monitor a range of remedial activities and government or private proceedings under these laws with respect to alleged past practices at Third-Party, Currently Operated, and Closed or Non-operated Sites, which categories may include NPL Sites. Remedial activities may include one or more of the following: investigation involving sampling, modeling, risk assessment or monitoring; cleanup measures including removal, treatment or disposal; or operation and maintenance of remedial systems. The environmental proceedings seek funding or performance of remediation and, in some cases, compensation for alleged property damage, natural resource damages, punitive damages, civil penalties, injunctive relief and government oversight costs.
ENVIRONMENTAL REMEDIATION
As of December 31, 2024, certain Occidental subsidiaries participated in or monitored remedial activities or proceedings at 158 sites. The following table presents the current and non-current environmental remediation liabilities of such subsidiaries on a consolidated basis as of December 31, 2024 and 2023, the current portion of which is included in accrued liabilities ($150 million in 2024 and $132 million in 2023) and the remainder in deferred credits and other liabilities - environmental remediation liabilities ($1.8 billion in 2024 and $0.9 billion in 2023).
These environmental remediation sites are grouped into NPL Sites and the following three categories of non-NPL Sites —Third-Party Sites, Currently Operated Sites and Closed or Non-operated Sites.
| 2024 | 2023 | |||||||||||||
| millions, except number of sites | Number of Sites | Remediation Balance | Number of Sites | Remediation Balance | ||||||||||
| NPL Sites | 32 | $ | 1,374 | 32 | $ | 435 | ||||||||
| Third-Party Sites | 63 | 200 | 65 | 233 | ||||||||||
| Currently Operated Sites | 12 | 88 | 12 | 98 | ||||||||||
| Closed or Non-operated Sites | 51 | 247 | 51 | 255 | ||||||||||
| Total | 158 | $ | 1,909 | 160 | $ | 1,021 |
As of December 31, 2024, environmental remediation liabilities of Occidental subsidiaries exceeded $10 million each at 16 of the 158 sites described above, and 88 of the sites had liabilities less than $1 million each.
The DASS in Newark, New Jersey accounted for a significant portion of the liabilities associated with the category of NPL Sites. During 2024, OxyChem increased the environmental remediation liability related to the DASS by $925 million. See Note 13 - Lawsuits, Claims, Commitments and Contingencies under the heading “Diamond Alkali Superfund Site Litigation”.
Five of the 63 Third-Party Sites — a former copper mining and smelting operation in Tennessee, a chrome site in New Jersey, a former oil field and a landfill in California and an active refinery in Louisiana where Occidental reimburses the current owner for certain remediation activities — accounted for approximately two thirds of the liabilities associated with this category.
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Three Currently Operated Sites — oil and gas operations in Colorado and chemical plants in Kansas and Louisiana — accounted for approximately two thirds of the liabilities associated with this category.
Seven Closed or Non-operated Sites — a landfill in Western New York, a former refinery in Oklahoma, former chemical plants in California, New York, Michigan, and Washington, and a closed coal mine in Pennsylvania — accounted for approximately two thirds of the liabilities associated with this category.
The consolidated estimate of environmental remediation liabilities in the table above varies over time depending on factors such as acquisitions or divestitures, identification of additional sites, remedy selection and implementation and changes in applicable laws or regulations, among other factors. Excluding the increase related to the DASS, Occidental’s subsidiaries recorded environmental remediation expenses of $76 million, $79 million and $65 million for the years ended December 31, 2024, 2023, and 2022, respectively, on a consolidated basis. Environmental remediation expenses primarily relate to existing conditions from alleged past practices. Based on current estimates, Occidental expects its subsidiaries to expend funds corresponding to approximately 25% of the year-end remediation balance over the next three to four years with the remainder over the subsequent 10 or more years.
Occidental believes its range of reasonably possible additional losses of its subsidiaries beyond those amounts currently recorded for environmental remediation for the 158 environmental sites in the table above could be up to $1.9 billion.
DIAMOND ALKALI SUPERFUND SITE
The EPA has organized the DASS into four OUs for evaluating, selecting and implementing remediation under CERCLA. OxyChem’s current activities in each OU are summarized below, many of which are performed on OxyChem’s behalf by Glenn Springs Holdings, Inc.
OU1 – The Former Diamond Alkali Plant at 80-120 Lister Avenue in Newark: Maxus and its affiliates implemented an interim remedy of OU1 pursuant to a 1990 Consent Decree, for which OxyChem currently performs maintenance and monitoring. In January 2025, the EPA issued a ROD for the final remedy of OU1 that provides for optimized containment for which it estimated a cost of $16 million.
OU2 – The Lower 8.3 Miles of the Lower Passaic River: In March 2016, the EPA issued a ROD specifying remedial actions required for OU2. During the third quarter of 2016, and following Maxus’s bankruptcy filing, OxyChem and the EPA entered into an AOC to complete the design of the remedy selected in the ROD. In May 2024, the EPA approved OxyChem's remedial design for OU2. In June 2024, the EPA notified OxyChem that the work required by the AOC has been fully performed in accordance with its terms. The EPA has estimated the cost to remediate OU2 to be approximately $1.4 billion.
OU3 – Newark Bay Study Area, including Newark Bay and portions of the Hackensack River, Arthur Kill, and Kill van Kull: Maxus and its affiliates initiated a remedial investigation and feasibility study of OU3 pursuant to a 2004 AOC which was amended in 2010. OxyChem is currently performing feasibility study activities in OU3.
OU4 – The 17-mile Lower Passaic River Study Area, comprising OU2 and the Upper 9 Miles of the Lower Passaic River: In September 2021, the EPA issued a ROD selecting an interim remedy for the portion of OU4 that excludes OU2 and is located upstream from the Lister Avenue Plant site for which OxyChem inherited legal responsibility. In March 2023, the EPA issued a Unilateral Administrative Order in which it directed and ordered OxyChem to design the EPA’s selected interim remedy for OU4. The EPA has estimated the cost to remediate OU4 to be approximately $440 million.
Natural Resource Trustees – In addition to the activities of the EPA and OxyChem in the OUs described above, federal and state natural resource trustees are assessing natural resources in the Lower Passaic River and Greater Newark Bay to evaluate potential claims for natural resource damages.
OTHER INFORMATION
For the DASS, OxyChem has accrued a reserve relating to its estimated allocable share of the costs to perform the maintenance and monitoring required in the OU1 Consent Decree, and the remedial investigation and feasibility study required in OU3 (Newark Bay). Subject to and without waiver of its rights, including its appeal, OxyChem has accrued a reserve for design and implementation of remedies selected in the OU2 ROD and AOC and the OU4 ROD and OU4 Unilateral Administrative Order based upon a December 2024 Order of the U.S. District Court for the District of New Jersey (District Court) approving the proposed Alden Leeds Settlement, which OxyChem is appealing. See Note 13 below, Lawsuits, Claims, Commitments and Contingencies.
OxyChem’s accrued environmental remediation reserve does not reflect the potential for additional remediation costs or natural resource damages for the DASS that OxyChem believes are not reasonably estimable. OxyChem’s ultimate liability at the DASS may be higher or lower than the reserved amount and the reasonably possible additional losses, and is subject to final design plans, further action by the EPA and natural resource trustees, and the resolution of OxyChem's allocable share with other potentially responsible parties, among other factors.
OxyChem continues to evaluate the estimated costs currently recorded for remediation at the DASS as well as the range of reasonably possible additional losses beyond those amounts currently recorded. Given the complexity and extent of the remediation efforts, estimates of the remediation costs may increase or decrease over time as new information becomes available.
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| NOTE 13 - LAWSUITS, CLAIMS, COMMITMENTS AND CONTINGENCIES |
LEGAL MATTERS
Occidental or certain of its subsidiaries are involved, in the normal course of business, in lawsuits, claims and other legal proceedings that seek, among other things, compensation for alleged personal injury, breach of contract, property damage or other losses, punitive damages, civil penalties, or injunctive or declaratory relief. Occidental or certain of its subsidiaries also are involved in proceedings under CERCLA and similar federal, regional, state, provincial, tribal, local and international environmental laws. These environmental proceedings seek funding or performance of remediation and, in some cases, compensation for alleged property damage, natural resource damages, punitive damages, civil penalties, injunctive relief and government oversight costs. Usually Occidental or such subsidiaries are among many companies in these environmental proceedings and have to date been successful in sharing remediation costs with other financially sound companies. Further, some lawsuits, claims and legal proceedings involve acquired or disposed assets with respect to which a third party or Occidental or its subsidiary retains liability or indemnifies the other party for conditions that existed prior to the transaction.
In accordance with applicable accounting guidance, Occidental or its subsidiaries accrue reserves for outstanding lawsuits, claims and proceedings when it is probable that a liability has been incurred and the liability can be reasonably estimated. Other than reserves for the environmental remediation and tax matters discussed below, reserves for matters that satisfied these criteria as of December 31, 2024 and 2023 were not material to Occidental’s Consolidated Balance Sheets.
If unfavorable outcomes of these matters were to occur, future results of operations or cash flows for any particular quarterly or annual period could be materially adversely affected. Occidental’s estimates are based on information known about the legal matters and its experience in contesting, litigating and settling similar matters. Occidental will reassess the probability and estimability of contingent losses as new information becomes available.
DIAMOND ALKALI SUPERFUND SITE LITIGATION
Alden Leeds Litigation
In December 2022, the EPA and the DOJ filed a proposed Consent Decree in the Alden Leeds litigation seeking court approval to settle with 85 parties for a total of $150 million for cleanup costs associated with OU2 and OU4. In January 2024, the DOJ filed a proposed Amended Consent Decree in which it excluded three companies from the proposed settlement, among other changes, followed by a motion to approve the Amended Consent Decree. In December 2024, the District Court approved the Amended Consent Decree. In its order approving the Amended Consent Decree, the District Court accepted the EPA’s revised determination that OxyChem was liable for approximately 85% of cleanup costs associated with OU2 and OU4. OxyChem has appealed the District Court’s ruling because OxyChem believes it is incorrect for several reasons including, but not limited to, the fact that the District Court failed to address the impact of several recent Supreme Court rulings that curtail EPA authority and limit judicial deference to EPA actions. OxyChem filed its Notice of Appeal in February 2025.
As a result of the District Court’s approval of the Amended Consent Decree, OxyChem increased the non-current environmental remediation liability related to OU2 and OU4 by $925 million. This charge is included in asset impairments and other charges in the Consolidated Statements of Operations. This charge represents the additional share of the total estimated remediation costs which OxyChem may incur as a result of the assignment by the District Court of 85% of the responsibility for OU2 and OU4. These costs have not been discounted as the timing and amount of the payments are not fixed or reliably determinable. Associated with this charge, OxyChem reduced the amount of its reasonably possible additional loss by approximately $0.9 billion. It is expected that the cash outlay for remediation costs will be expended over ten to twenty years, or more.
The proposed settlement does not address the liability of entities that were excluded from the settlement for the DASS, including OU2, OU3, OU4 or natural resource damages, or the liability of any settling party with respect to OU3 or natural resource damages.
While the remedies for OU2 and OU4 are expected to take ten to twenty years to complete, the EPA may seek to order OxyChem to perform a substantial majority or all of the remediation work and provide additional financial assurance. It is uncertain when or to what extent the EPA may take action to compel OxyChem to perform further remediation in OU2 or OU4 or the amount of financial assurance the EPA could attempt to require OxyChem to post.
Contribution and Cost Recovery Actions
In June 2018, OxyChem filed a complaint under CERCLA in U.S. District Court for the District of New Jersey against numerous potentially responsible parties seeking contribution and cost recovery of amounts incurred or to be incurred to comply with the AOC and the OU2 ROD, or to perform other remediation activities related to the DASS (2018 Contribution Action).
Subject to all its defenses, OxyChem is designing the interim remedy for OU4 in compliance with a Unilateral Administrative Order issued by EPA in the first quarter of 2023. Because OxyChem is incurring costs to implement the OU4 Unilateral Administrative Order, OxyChem brought a cost recovery action under CERCLA in March 2023 in the District Court
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against multiple parties (2023 Cost Recovery Action). The 2018 Contribution Action and the 2023 Cost Recovery Action were stayed pending the outcome of the Alden Leeds litigation. OxyChem does not know when the Court will lift the stay in those matters.
As stated above, OxyChem has filed its Notice of Intent to appeal the settlement and Amended Consent Decree in the Alden Leeds litigation. In the 2018 Contribution Action and 2023 Cost Recovery Action, OxyChem also intends to defend and prosecute vigorously its right to seek contribution and cost recovery from all potentially responsible parties to pay remediation costs in the DASS and to seek a judicial allocation of responsibility under CERCLA. If not reversed on appeal, the approved Amended Consent Decree could bar OxyChem from pursuing contribution against the settling parties for remediation costs OxyChem has incurred or may incur in the future to design and implement the remedies in OU2 and OU4, including claims OxyChem asserted in the 2018 Contribution Action. As a result, OxyChem has reduced its receivable from other potentially responsible parties by $84 million. This charge is included in other operating and non-operating expense in the Consolidated Statements of Operations.
MAXUS LITIGATION
A portion of estimated environmental remediation liabilities relate to the former DSCC. When OxyChem acquired DSCC in 1986, Maxus agreed to indemnify OxyChem for a number of environmental sites, including the DASS. In June 2016, Maxus and several affiliated companies filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the District of Delaware. In June 2017, the Bankruptcy Court approved a Plan of Liquidation to liquidate Maxus and create the Maxus Liquidating Trust for the benefit of Maxus’ creditors, including OxyChem, to satisfy claims by OxyChem and other creditors for past and future remediation and other costs. In April 2023, the claims pending in the Bankruptcy Court were resolved. Under the settlement, which became final in August 2023, OxyChem has now received settlement proceeds of approximately $350 million.
ANDES ARBITRATION
In April 2024, Andes and the Occidental entities named in the pending actions related to the Andes Arbitration executed a confidential final settlement in which the parties agreed to dismiss all pending legal actions. The settlement resulted in a gain of $182 million, net of taxes, which was included in operating cash flows from discontinued operations.
TAX MATTERS AND OTHER DISPUTES
During the course of its operations, Occidental is subject to audit by tax authorities for varying periods in various federal, state, local and international tax jurisdictions. Tax years through 2021 for U.S. federal income tax purposes have been audited by the IRS pursuant to its Compliance Assurance Program and subsequent taxable years are currently under review. Tax years through 2018 have been audited for state income tax purposes. There are no outstanding significant audit matters in international jurisdictions. During the course of tax audits, disputes have arisen and other disputes may arise as to facts and matters of law.
For Anadarko, its taxable years through 2014 and tax year 2016 for U.S. federal tax purposes have been audited and closed by the IRS. Tax years 2015 and 2017 through 2019 have been audited by the IRS but remain open pending the outcome of the Tronox U.S. Tax Court litigation discussed below. Tax years through 2010 have been audited for state income tax purposes. There are no outstanding significant audit matters in international jurisdictions. As stated above, during the course of tax audits, disputes have arisen and other disputes may arise as to facts and matters of law.
Other than the dispute discussed below, Occidental believes that the resolution of these outstanding tax disputes would not have a material adverse effect on its consolidated financial position or results of operations.
Anadarko received an $881 million tentative refund in 2016 related to its $5.2 billion Tronox Adversary Proceeding settlement payment in 2015. In September 2018, Anadarko received a statutory notice of deficiency from the IRS disallowing the net operating loss carryback and rejecting Anadarko’s refund claim. Anadarko disagreed and, in November 2018, filed a petition with the U.S. Tax Court to dispute the disallowance. Trial was held in May 2023. The parties filed post-trial briefs throughout 2023 and 2024. Closing arguments were held in May 2024. The Tax Court may issue an opinion at any time. If the Tax Court opines that all or a portion of the original $5.2 billion deduction is not deductible, a computation phase will commence where the parties will compute the tax amount to be included in the Tax Court’s decision. Once the parties submit their computation, the Tax Court judge will formally enter the decision reflecting the computed tax amount. To pursue an appeal of the Tax Court’s decision, any tax due as a result of the Tax Court’s decision must be fully bonded or paid within 90 days of the decision’s entry. If Anadarko does not pursue an appeal, the IRS will assess any resulting tax deficiency, including interest, and issue a notice demanding payment thereof.
In accordance with ASC 740’s guidance on the accounting for uncertain tax positions, Occidental has recorded no tax benefit on the tentative cash tax refund of $881 million. Additionally, Occidental has recorded no tax benefit on approximately $500 million of additional cash tax benefits realized from the utilization of tax attributes generated as a result of the deduction of the $5.2 billion Tronox Adversary Proceeding settlement payment in 2015. If the payment is ultimately determined not to be deductible, Occidental would be required to repay the tentative refund received, plus other cash benefits received related to the $5.2 billion deduction, plus interest, which as of December 31, 2024 totaled approximately $2.1 billion. As a result, should Occidental not ultimately prevail on the issue, there would be no additional tax expense recorded relative to this position for financial statement purposes other than future interest. However, in that event, as of
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| table of contents | FINANCIAL STATEMENTS FOOTNOTES |
December 31, 2024, Occidental would be required to repay approximately $1.4 billion in federal and state taxes and accrued interest of $760 million. A liability for the taxes and interest is included in deferred credits and other liabilities - other.
INDEMNITIES TO THIRD PARTIES
Occidental, its subsidiaries, or both, have indemnified various parties against specified liabilities those parties might incur in the future in connection with purchases and other transactions that they have entered into with Occidental or its subsidiaries. These indemnities usually are contingent upon the other party incurring liabilities that reach specified thresholds. As of December 31, 2024, Occidental is not aware of circumstances that it believes would reasonably be expected to lead to indemnity claims that would result in payments materially in excess of reserves.
PURCHASE OBLIGATIONS AND COMMITMENTS
Occidental, its subsidiaries, or both, have entered into agreements providing for future payments, primarily to secure terminal, pipeline and processing capacity, CO2, drilling rigs and services, electrical power, non-lease components, steam and certain chemical raw materials. Occidental has certain other commitments under contracts, guarantees and joint ventures, including purchase commitments for goods and services at market-related prices and certain other contingent liabilities. The amounts that will be paid for such outstanding off-balance sheet purchase obligations as of December 31, 2024 are $3.4 billion in 2025, $4.4 billion in 2026 and 2027, $2.6 billion in 2028 and 2029 and $2.4 billion in 2030 and thereafter.
| NOTE 14 - STOCKHOLDERS’ EQUITY |
The following table presents Occidental's common share activity, including exercises of warrants, and other transactions in Occidental's common stock in 2024:
| Period | Exercise of Warrants and Options | (a) | CrownRock Acquisition | Other | (b) | Treasury Stock Purchases | (c) | Common Stock Outstanding | (d) | ||||||||||||||||||||
| December 31, 2023 | 879,463,103 | ||||||||||||||||||||||||||||
| First Quarter 2024 | 3,277,628 | — | 3,978,999 | — | 886,719,730 | ||||||||||||||||||||||||
| Second Quarter 2024 | 18,875,864 | — | 94,789 | (130,424) | 905,559,959 | ||||||||||||||||||||||||
| Third Quarter 2024 | 3,032,136 | 29,560,619 | 21,504 | — | 938,174,218 | ||||||||||||||||||||||||
| Fourth Quarter 2024 | 246,049 | — | 165,079 | (127,363) | 938,457,983 | ||||||||||||||||||||||||
| Total 2024 | 25,431,677 | 29,560,619 | 4,260,371 | (257,787) | 938,457,983 |
(a) Approximately $559 million of cash was received as a result of the exercise of common stock warrants and options.
(b) Consisted of issuances for the 2015 long-term incentive plan, the OPC savings plan and the dividend reinvestment plan.
(c) Consisted of purchases of shares from the trustee of Occidental's defined contribution savings plan that are not part of publicly announced plans or programs.
(d) As of December 31, 2024, Occidental had 74.0 million of outstanding warrants with a strike price of $22 per share and 83.9 million of warrants with a strike price of $59.62 per share.
TREASURY STOCK
As of December 31, 2024, 2023 and 2022, treasury stock shares numbered 228.3 million, 228.1 million and 198.7 million, respectively.
PREFERRED STOCK
In connection with the Anadarko Acquisition, Occidental issued 100,000 shares of series A preferred stock, with a face value of $100,000 per share and a liquidation preference of $105,000 per share plus unpaid accrued dividends. Prior to August 2029, a mandatory redemption provision obligates Occidental to redeem preferred stock at a 10% premium to face value on a dollar-for-dollar basis for every dollar distributed to common shareholders (either via common stock dividends or share repurchases) above $4.00 per share, on a trailing 12-month basis. Preferred redemptions can settle between 30 and 60 days from the date Berkshire Hathaway is notified of the redemption obligation and accrued unpaid dividends are paid up to but not including the redemption date. Occidental cannot voluntarily redeem preferred stock before August 2029. After August 2029, Occidental can voluntarily redeem preferred stock at a 5% premium to face value.
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Dividends on the preferred stock accrue on the face value at a rate per annum of 8%, but will be paid only when, as and if declared by Occidental’s Board of Directors. At any time, when such dividends have not been paid in full, the unpaid amounts will accrue dividends, compounded quarterly, at a rate per annum of 9%. Following the payment in full of any accrued but unpaid dividends, the dividend rate will remain at 9% per annum. If preferred dividends are not paid in full, Occidental is prohibited from paying dividends on common stock. Occidental paid $679 million in preferred stock dividends in 2024.
Occidental did not redeem preferred stock in 2024. To the extent Occidental's trailing 12-month distributions to common shareholders is above $4.00 per share, Occidental is required to match any common shareholder distributions with preferred stock redemptions. As of the date of this filing approximately $8.5 billion face value of the preferred stock remains outstanding.
BERKSHIRE WARRANT
In connection with the preferred stock issuance, Occidental also issued the Berkshire Warrant. The Berkshire Warrant is exercisable at the holder’s option, in whole or in part, until the first anniversary of the date on which no shares of preferred stock remain outstanding, at which time the Berkshire Warrant expires. The holder of the Berkshire Warrant and the preferred stock may redeem the preferred stock as payment for the exercise price of the Warrant in lieu of cash payment upon exercise. As of December 31, 2024, the Berkshire Warrant would result in the issuance of 83.9 million shares of Occidental common stock, if exercised in full for its current strike price of $59.62 per share of Occidental common stock.
COMMON STOCK WARRANTS
Occidental issued approximately 116 million Common Stock Warrants on August 3, 2020 to holders of record of outstanding shares of Occidental’s common stock as of the close of business on July 6, 2020. The Common Stock Warrants have an exercise price of $22.00 per share and will expire on August 3, 2027. As of December 31, 2024, Occidental had 74.0 million outstanding warrants. The Common Stock Warrants are listed on the NYSE and trade under the symbol "OXY WS".
EARNINGS PER SHARE
Occidental’s instruments containing rights to nonforfeitable dividends granted in stock-based awards are considered participating securities prior to vesting and, therefore, have been deducted from earnings in computing basic and diluted EPS under the two-class method.
Basic EPS was computed by dividing net income attributable to common stock, net of income allocated to participating securities, by the weighted-average number of common shares outstanding during each period, including vested but unissued shares and share units. The computation of diluted EPS reflects the additional dilutive effect of stock options, warrants and unvested stock awards.
The following table presents the calculation of basic and diluted EPS for the years ended December 31:
| millions except per share amounts | 2024 | 2023 | 2022 | ||||||||
| Income from continuing operations | $ | 2,896 | $ | 4,696 | $ | 13,304 | |||||
| Income from discontinued operations, net of tax | 182 | — | — | ||||||||
| Net income | $ | 3,078 | $ | 4,696 | $ | 13,304 | |||||
| Less: Net income attributable to noncontrolling interest | (22) | — | — | ||||||||
| Less: Preferred stock dividends | (679) | (923) | (800) | ||||||||
| Net income attributable to common stock | $ | 2,377 | $ | 3,773 | $ | 12,504 | |||||
| Less: Net income allocated to participating securities | (13) | (23) | (83) | ||||||||
| Net income, net of participating securities | $ | 2,364 | $ | 3,750 | $ | 12,421 | |||||
| Weighted-average number of basic shares | 911.8 | 889.2 | 926.2 | ||||||||
| Basic earnings per common share | $ | 2.59 | $ | 4.22 | $ | 13.41 | |||||
| Net income attributable to common stock | $ | 2,377 | $ | 3,773 | $ | 12,504 | |||||
| Less: Net income allocated to participating securities | (13) | (21) | (77) | ||||||||
| Net income, net of participating securities | $ | 2,364 | $ | 3,752 | $ | 12,427 | |||||
| Weighted-average number of basic shares | 911.8 | 889.2 | 926.2 | ||||||||
| Dilutive securities | 55.3 | 71.7 | 75.8 | ||||||||
| Total diluted weighted-average common shares | 967.1 | 960.9 | 1,002.0 | ||||||||
| Diluted earnings per common share | $ | 2.44 | $ | 3.90 | $ | 12.40 |
For the years ended December 31, 2024, 2023 and 2022, there were no Occidental common stock warrants nor options that were excluded from diluted shares.
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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
Accumulated OCI (loss) consisted of the following after-tax amounts as of December 31:
| millions | 2024 | 2023 | ||||||
| Foreign currency translation adjustments | $ | (6) | $ | (4) | ||||
| Derivatives | 15 | 20 | ||||||
| Pension and postretirement adjustments (a) | 170 | 259 | ||||||
| Total | $ | 179 | $ | 275 |
(a)See Note 11 - Retirement and Postretirement Benefit Plans for further information.
| NOTE 15 - STOCK-BASED INCENTIVE PLANS |
Occidental issues stock-based awards to employees in accordance with the terms of the Plans. An aggregate of 133 million shares of Occidental common stock were authorized for issuance and approximately 12.9 million shares had been reserved for issuance for employee awards through December 31, 2024. As of December 31, 2024, approximately 32.1 million shares were available for grants of future awards. The 2015 Long-Term Incentive plan requires each share covered by an award (other than options) to be counted as if three shares were issued in determining the number of shares that are available for future awards. Accordingly, the number of shares available for future awards may be less than 32.1 million depending on the type of award granted, and shares available for future awards may increase by the number of shares that are forfeited, canceled, or correspond to the portion of any stock-based awards settled in cash, including awards that were issued under a previous plan that remain outstanding. Current outstanding awards include RSUs, stock options, CROCEI awards and TSRI awards.
During 2024, non-employee directors were granted awards for 36,191 shares of common stock. Compensation expense for these awards was measured using the closing quoted market price of Occidental’s common stock on the grant date and was fully recognized at that time.
Occidental incurred expenses of $228 million, $217 million and $258 million related to stock-based incentive plans in the years ended December 31, 2024, 2023, and 2022, respectively. The income tax benefit associated with this expense was $48 million, $46 million and $54 million in the years ended December 31, 2024, 2023, and 2022, respectively.
As of December 31, 2024, unrecognized compensation expense for all unvested stock-based incentive awards was $300 million. This expense is expected to be recognized over a weighted-average period of 1.9 years. Occidental accounts for forfeitures as they occur.
RESTRICTED STOCK UNITS
Certain employees are awarded the right to receive RSUs, some of which have performance criteria, and are in the form of, or equivalent in value to, actual shares of Occidental common stock. Depending on their terms, RSUs may be settled in stock or may be cash settled liabilities. These awards vest from one to three years following the grant date. For certain RSUs, dividend equivalents are paid during the vesting period.
CASH-SETTLED RSU LIABILITY AWARDS
The weighted-average, grant-date fair values of cash-settled RSUs granted in 2024, 2023, and 2022 were $58.87, $60.43 and $47.41 per share, respectively. Cash-settled RSUs resulted in payments of $8 million, $9 million and $203 million, during the years ended December 31, 2024, 2023, and 2022, respectively.
STOCK-SETTLED RSU EQUITY AWARDS
The weighted-average, grant-date fair values of the stock-settled RSUs granted in 2024, 2023, and 2022 were $61.34, $59.85 and $45.14, respectively. The fair value of RSUs settled in shares during the years ended December 31, 2024, 2023, and 2022 was $240 million, $254 million and $160 million, respectively.
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A summary of changes in Occidental’s unvested cash- and stock-settled RSUs for 2024 is presented below:
| Cash-Settled | Stock-Settled | |||||||||||||
| thousands, except fair values | RSUs | RSUs | ||||||||||||
| Unvested as of January 1 | 271 | $ | 37.96 | 7,732 | $ | 47.03 | ||||||||
| Granted | 293 | $ | 58.87 | 3,540 | $ | 61.34 | ||||||||
| Vested | (141) | $ | 43.61 | (3,978) | $ | 40.37 | ||||||||
| Forfeitures | (25) | $ | 57.60 | (175) | $ | 56.58 | ||||||||
| Unvested as of December 31 | 398 | $ | 50.14 | 7,119 | $ | 57.63 |
TOTAL SHAREHOLDER RETURN INCENTIVE AWARDS
Certain executives are awarded TSRIs that vest at the end of a three-year period following the grant date. Payout is based upon Occidental’s absolute total shareholder return and performance relative to its peers. TSRIs have payouts that range from 0% to 200% of the target award and settle in stock once certified. Dividend equivalents for TSRIs are accumulated and paid upon certification of the award. The fair value of TSRIs settled in shares during the years ended December 31, 2024, 2023, and 2022 was $68 million, $45 million and zero, respectively.
The fair values of TSRIs are initially determined on the grant date using a Monte Carlo simulation model based on Occidental’s assumptions, noted in the following table, and the volatility from corresponding peer group companies. The expected life is based on the Term. The risk-free interest rate is the implied yield available on zero coupon Treasury notes at the time of grant with a remaining term equal to the Term. The dividend yield is the expected annual dividend yield over the Term, expressed as a percentage of the stock price on the grant date. Estimates of fair value may not accurately predict the value ultimately realized by the employees who receive the awards, and the ultimate value may not be indicative of the reasonableness of the original estimates of fair value made by Occidental.
The grant-date assumptions used in the Monte Carlo simulation models for the estimated payout level of TSRIs were as follows:
| TSRIs | |||||||||||
| 2024 | 2023 | 2022 | |||||||||
| Assumptions used: | |||||||||||
| Risk-free interest rate | 4.3% | 4.6% | 1.7% | ||||||||
| Volatility factor | 45% | 64% | 80% | ||||||||
| Expected life, years | 2.83 | 2.84 | 2.89 | ||||||||
| Grant-date fair value of underlying Occidental common stock | $ | 61.36 | $ | 59.71 | $ | 42.98 |
A summary of changes in Occidental’s unvested TSRIs in 2024 is presented below:
| TSRIs | ||||||||||||||
| thousands, except fair values | Awards | Weighted-Average Grant-Date Fair Value of Occidental Stock | ||||||||||||
| Unvested as of January 1 | 1,507 | $ | 40.43 | |||||||||||
| Granted | 439 | $ | 61.36 | |||||||||||
| Vested (a) | (651) | $ | 25.39 | |||||||||||
| Forfeitures | (44) | $ | 55.30 | |||||||||||
| Unvested as of December 31 | 1,251 | $ | 55.08 |
(a)Presented at the target payouts. In 2024, the weighted-average payout at vesting was 180% of the target, resulting in the issuance of approximately 1,172,000 shares of Occidental common stock.
STOCK OPTIONS
Certain employees are granted options that vest over three years, expire on the tenth anniversary of the grant date, and settle in stock. Exercise prices of the options were equal to the quoted market value of Occidental’s stock on the grant date. There were no options granted in 2024.
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A summary of Occidental’s outstanding stock options as of December 31, 2024 and changes during the year ended December 31, 2024 is presented below:
| Vested | Unvested | |||||||||||||
| thousands, except fair values | Options | Weighted Average Strike Price | Options | Weighted Average Strike Price | ||||||||||
| January 1 | 2,094 | $ | 38.45 | 294 | $ | 35.37 | ||||||||
| Vested | 211 | $ | 32.36 | (211) | $ | 32.36 | ||||||||
| December 31 | 2,305 | $ | 37.89 | 83 | $ | 42.98 |
The intrinsic value of options exercised during the years ended December 31, 2024, 2023 and 2022, respectively, was zero, $9 million and $17 million. As of December 31, 2024, the remaining life of fully vested options was 5.4 years.
CASH RETURN ON CAPITAL EMPLOYED INCENTIVE AWARDS
Certain executives are awarded CROCEI awards that vest at the end of a three-year period if performance targets based on CROCE are met. These awards are settled in stock upon certification of the performance target, with payouts that range from 0% to 200% of the target award. Dividend equivalents are accumulated and paid upon certification of the award. The value of shares that vested in 2024 was $25 million. A summary of changes in Occidental’s unvested CROCEI in 2024 is presented below:
| CROCEI | |||||||||||
| thousands, except fair values | Awards | Weighted-Average Grant-Date Fair Value of Occidental Stock | |||||||||
| Unvested as of January 1 | 507 | $ | 39.59 | ||||||||
| Granted | 161 | $ | 61.36 | ||||||||
| Vested (a) | (221) | $ | 25.39 | ||||||||
| Unvested as of December 31 | 447 | $ | 54.55 |
(a) Presented at the target payouts. In 2024, the weighted-average payout at vesting was 200% of the target, resulting in the issuance of approximately 441,000 shares of Occidental common stock.
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| NOTE 16 - INDUSTRY SEGMENTS AND GEOGRAPHIC AREAS |
Occidental conducts its operations through three segments: oil and gas, chemical and midstream and marketing. Income taxes, interest income, interest expense, environmental remediation expenses and acquisition-related costs of Occidental and its operating subsidiaries and unallocated corporate expenses are consolidated under corporate and eliminations. Intersegment sales eliminate upon consolidation and are made at prices that approximate market. Identifiable assets are those assets used in the operations of the segments. Corporate assets consist of cash and restricted cash, certain corporate receivables and PP&E.
Occidental’s President and CEO is ultimately responsible for allocating resources and assessing the performance of each operating segment and is Occidental’s CODM. The CEO may be assisted in this function by other members of Occidental’s executive management including, but not limited to, the Chief Financial Officer. While other executives are responsible for the performance of their individual areas, the CEO is solely responsible for allocating resources across Occidental as a whole.
For all three reporting segments the CODM utilizes segment income (loss) from continuing operations before income taxes to measure performance, as well as allocate resources (including financial or capital resources) for each segment, predominantly in the annual budget and forecasting process.
The following table reconciles segment income from continuing operations before taxes to net income attributable to common shares:
| Years Ended December 31, | |||||||||||
| millions | 2024 | 2023 | 2022 | ||||||||
| Segment income from continuing operations before taxes | |||||||||||
| Oil and gas segment | $ | 5,214 | $ | 6,240 | $ | 12,803 | |||||
| Chemical segment | 1,124 | 1,531 | 2,508 | ||||||||
| Midstream and marketing segment | 580 | 24 | 273 | ||||||||
| Corporate and eliminations | (1,673) | (421) | (437) | ||||||||
| Interest and debt expense, net | (1,175) | (945) | (1,030) | ||||||||
| Income from continuing operations before income taxes | $ | 4,070 | $ | 6,429 | $ | 14,117 | |||||
| Income tax expense | (1,174) | (1,733) | (813) | ||||||||
| Income from continuing operations | $ | 2,896 | $ | 4,696 | $ | 13,304 | |||||
| Discontinued operations, net of tax | 182 | — | — | ||||||||
| Net income | $ | 3,078 | $ | 4,696 | $ | 13,304 | |||||
| Less: Net income attributable to noncontrolling interest | (22) | — | — | ||||||||
| Less: Preferred stock dividends and redemption premiums | (679) | (923) | (800) | ||||||||
| Net income attributable to common stockholders | $ | 2,377 | $ | 3,773 | $ | 12,504 |
The following tables include a summary of significant revenue and expense line items for each segment. Items within “Significant segment expenses” align with the significant segment-level information that is regularly provided to the CODM as required by the adoption of ASU 2023-07 in the fourth quarter of 2024. Intersegment expenses are included within the amounts shown.
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OIL AND GAS SEGMENT
Other segment expenses include asset impairments and other charges, selling, general and administrative expense, acquisition-related costs and exploration expense:
| Years Ended December 31, | |||||||||||
| millions | 2024 | 2023 | 2022 | ||||||||
| Revenues and other income | |||||||||||
| Net sales | $ | 21,705 | $ | 21,284 | $ | 27,165 | |||||
| Gains (losses) on sale of assets and other income | (551) | 192 | 220 | ||||||||
| Total | $ | 21,154 | $ | 21,476 | $ | 27,385 | |||||
| Significant segment expenses | |||||||||||
| Oil and gas lease operating expense | 4,738 | 4,677 | 4,028 | ||||||||
| Transportation and gathering expense | 1,583 | 1,427 | 1,393 | ||||||||
| Other operating and non-operating expense | 997 | 889 | 942 | ||||||||
| Taxes other than on income | 1,026 | 1,076 | 1,535 | ||||||||
| Depreciation, depletion and amortization | 6,565 | 6,112 | 6,179 | ||||||||
| Other segment expenses | 993 | 1,031 | 498 | ||||||||
| Total | $ | 15,902 | $ | 15,212 | $ | 14,575 | |||||
| Segment income before other items | $ | 5,252 | $ | 6,264 | $ | 12,810 | |||||
| Losses from equity investments and other | (38) | (24) | (7) | ||||||||
| Segment income from continuing operations before taxes | $ | 5,214 | $ | 6,240 | $ | 12,803 | |||||
CHEMICAL SEGMENT
Other segment expenses include asset impairments and other charges, and selling, general and administrative expense:
| Years Ended December 31, | |||||||||||
| millions | 2024 | 2023 | 2022 | ||||||||
| Revenues and other income | |||||||||||
| Net sales | $ | 4,923 | $ | 5,321 | $ | 6,757 | |||||
| Gains on sale of assets and other income | 19 | 57 | 65 | ||||||||
| Total | 4,942 | 5,378 | 6,822 | ||||||||
| Significant segment expenses | |||||||||||
| Cost of sales | 3,367 | 3,425 | 3,909 | ||||||||
| Depreciation, depletion and amortization | 363 | 356 | 370 | ||||||||
| Other segment expenses | 191 | 175 | 149 | ||||||||
| Total | $ | 3,921 | $ | 3,956 | $ | 4,428 | |||||
| Segment income before other items | $ | 1,021 | $ | 1,422 | $ | 2,394 | |||||
| Income from equity investments and other | 103 | 109 | 114 | ||||||||
| Segment income from continuing operations before taxes | $ | 1,124 | $ | 1,531 | $ | 2,508 | |||||
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MIDSTREAM AND MARKETING SEGMENT
Other segment expenses include asset impairments and other charges, transportation expense, taxes other than on income, and selling, general and administrative expense:
| Years Ended December 31, | |||||||||||
| millions | 2024 | 2023 | 2022 | ||||||||
| Revenues and other income | |||||||||||
| Net sales | $ | 962 | $ | 2,551 | $ | 4,136 | |||||
| Gains on sale of assets and other income | 627 | 493 | 267 | ||||||||
| Total | $ | 1,589 | $ | 3,044 | $ | 4,403 | |||||
| Significant segment expenses | |||||||||||
| Cost of sales | 558 | 597 | 706 | ||||||||
| Purchased commodities | 470 | 2,144 | 3,497 | ||||||||
| Other operating and non-operating expense | 298 | 239 | 143 | ||||||||
| Depreciation, depletion and amortization | 329 | 326 | 328 | ||||||||
| Other segment expenses | 151 | 163 | 167 | ||||||||
| Total | $ | 1,806 | $ | 3,469 | $ | 4,841 | |||||
| Segment losses before other items | $ | (217) | $ | (425) | $ | (438) | |||||
| Income from equity investments and other | 797 | 449 | 711 | ||||||||
| Segment income from continuing operations before taxes | $ | 580 | $ | 24 | $ | 273 | |||||
SEGMENT INVESTMENTS AND EXPENDITURES
The following table includes segment-level balance sheet information:
| millions | Oil and gas | Chemical | Midstream and marketing | Corporate and eliminations | Total | |||||||||||||||
| Year ended December 31, 2024 | ||||||||||||||||||||
| PP&E Additions | $ | 5,408 | $ | 718 | $ | 941 | $ | 141 | $ | 7,208 | ||||||||||
| Investments in unconsolidated entities | $ | 94 | $ | 513 | $ | 2,552 | $ | — | $ | 3,159 | ||||||||||
| Total Assets | $ | 63,596 | $ | 5,122 | $ | 13,641 | $ | 3,086 | $ | 85,445 |
| Year ended December 31, 2023 | ||||||||||||||||||||
| PP&E Additions | $ | 5,028 | $ | 551 | $ | 664 | $ | 125 | $ | 6,368 | ||||||||||
| Investments in unconsolidated entities | $ | 93 | $ | 550 | $ | 2,581 | $ | — | $ | 3,224 | ||||||||||
| Total Assets | $ | 53,786 | $ | 4,682 | $ | 13,327 | $ | 2,213 | $ | 74,008 |
GEOGRAPHIC AREAS
The following table represents Occidental’s property, plant and equipment, net by geographic area:
| Years Ended December 31, | |||||||||||
| millions | 2024 | 2023 | 2022 | ||||||||
| United States | $ | 62,604 | $ | 51,646 | $ | 51,706 | |||||
| International | |||||||||||
| UAE | 3,495 | 3,609 | 3,663 | ||||||||
| Oman | 2,187 | 2,156 | 2,159 | ||||||||
| Algeria | 618 | 624 | 350 | ||||||||
| Qatar | 361 | 393 | 428 | ||||||||
| Other International | 113 | 101 | 78 | ||||||||
| Total International | 6,774 | 6,883 | 6,678 | ||||||||
| Total | $ | 69,378 | $ | 58,529 | $ | 58,384 |
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| table of contents | Supplemental Oil and Gas Information (Unaudited) |
Supplemental Oil and Gas Information
OIL AND GAS RESERVES
The following tables set forth Occidental’s net interests in quantities of proved developed and undeveloped reserves of oil, NGL and natural gas and changes in such quantities. Proved oil, NGL and natural gas reserves were estimated using the unweighted arithmetic average of the first-day-of-the-month price for each month within the year, unless prices were defined by contractual arrangements. Oil, NGL and natural gas prices used for this purpose were based on posted benchmark prices and adjusted for price differentials including gravity, quality and transportation costs. The following table shows the pricing used in the reserve analysis for the periods presented:
| 2024 | 2023 | 2022 | |||||||||
| Average WTI Oil ($/Bbl) | $ | 75.48 | $ | 78.22 | $ | 93.67 | |||||
| Average Brent Oil ($/Bbl) | $ | 79.65 | $ | 82.80 | $ | 97.77 | |||||
| Average Henry Hub Natural Gas ($/MMbtu) | $ | 2.13 | $ | 2.64 | $ | 6.36 | |||||
| Average Mt. Belvieu NGL ($/Bbl) | $ | 33.04 | $ | 29.94 | $ | 47.81 |
Reserves are stated net of applicable royalties. Estimated reserves include Occidental’s economic interests under PSCs and other similar economic arrangements. In addition, discussions of oil and gas production or volumes, in general, refer to sales volumes unless the context requires or it is indicated otherwise.
Prices for oil, NGL and natural gas fluctuate widely. Historically, the markets for oil, NGL and natural gas and refined products have been volatile and may continue to be volatile in the future. Prolonged declines in oil, NGL and natural gas prices would reduce Occidental’s operating results and cash flows and could impact its future rate of growth and the recoverability of the carrying value of its assets.
| 112 | OXY 2024 FORM 10-K |
| table of contents | Supplemental Oil and Gas Information (Unaudited) |
OIL RESERVES
| MMbbl | United States | International | Total | |||||||||||||||||||||||||||||
| PROVED DEVELOPED AND UNDEVELOPED RESERVES | ||||||||||||||||||||||||||||||||
| Balance as of December 31, 2021 | 1,466 | 305 | 1,771 | |||||||||||||||||||||||||||||
| Revisions of previous estimates | 215 | (5) | 210 | |||||||||||||||||||||||||||||
| Improved recovery | 57 | 9 | 66 | |||||||||||||||||||||||||||||
| Extensions and discoveries | 89 | 6 | 95 | |||||||||||||||||||||||||||||
| Purchases of proved reserves | 7 | — | 7 | |||||||||||||||||||||||||||||
| Sales of proved reserves | (10) | — | (10) | |||||||||||||||||||||||||||||
| Production | (185) | (41) | (226) | |||||||||||||||||||||||||||||
| Balance as of December 31, 2022 | 1,639 | 274 | 1,913 | |||||||||||||||||||||||||||||
| Revisions of previous estimates | 77 | 91 | 168 | |||||||||||||||||||||||||||||
| Improved recovery | 7 | 11 | 18 | |||||||||||||||||||||||||||||
| Extensions and discoveries | 59 | 3 | 62 | |||||||||||||||||||||||||||||
| Purchases of proved reserves | 14 | — | 14 | |||||||||||||||||||||||||||||
| Sales of proved reserves | (1) | — | (1) | |||||||||||||||||||||||||||||
| Production | (195) | (39) | (234) | |||||||||||||||||||||||||||||
| Balance as of December 31, 2023 | 1,600 | 340 | 1,940 | |||||||||||||||||||||||||||||
| Revisions of previous estimates(a) | 47 | (7) | 40 | |||||||||||||||||||||||||||||
| Improved recovery | 38 | 6 | 44 | |||||||||||||||||||||||||||||
| Extensions and discoveries | 132 | 2 | 134 | |||||||||||||||||||||||||||||
| Purchases of proved reserves | 254 | — | 254 | |||||||||||||||||||||||||||||
| Sales of proved reserves | (30) | — | (30) | |||||||||||||||||||||||||||||
| Production | (209) | (38) | (247) | |||||||||||||||||||||||||||||
| Balance as of December 31, 2024 | 1,832 | 303 | 2,135 | |||||||||||||||||||||||||||||
| PROVED DEVELOPED RESERVES | ||||||||||||||||||||||||||||||||
| December 31, 2021 | 1,140 | 226 | 1,366 | |||||||||||||||||||||||||||||
| December 31, 2022 | 1,208 | 200 | 1,408 | |||||||||||||||||||||||||||||
| December 31, 2023 | 1,140 | 258 | 1,398 | |||||||||||||||||||||||||||||
| December 31, 2024 | 1,243 | 249 | 1,492 | |||||||||||||||||||||||||||||
| PROVED UNDEVELOPED RESERVES | ||||||||||||||||||||||||||||||||
| December 31, 2021 | 326 | 79 | 405 | |||||||||||||||||||||||||||||
| December 31, 2022 | 431 | 74 | 505 | |||||||||||||||||||||||||||||
| December 31, 2023 | 460 | 82 | 542 | |||||||||||||||||||||||||||||
| December 31, 2024 | 589 | 54 | 643 |
(a)Revisions of previous estimates in 2024 included the effects of new infill drilling, price revisions and other updates, including changes in reservoir performance, economic conditions, and development plans. Positive revisions of 43 MMbbl were related to additions associated with infill development projects, primarily in the Permian Basin (22 MMbbl), the DJ Basin (14 MMbbl), and international assets (4 MMbbl). Further positive revisions were primarily associated with updates based on reservoir performance (55 MMbbl), primarily due to positive performance revisions in GOA (32 MMbbl), the DJ Basin (15 MMbbl), and international assets (7 MMbbl). The positive revisions were partially offset by negative revisions of 48 MMbbl associated with management changes in development plans, mainly in the Permian Basin (19 MMbbl), Oman (18 MMbbl), and GOA (10 MMbbl). Further negative revisions of 13 MMbbl were associated with negative price revisions, mainly in the Permian Basin.
| OXY 2024 FORM 10-K | 113 |
| table of contents | Supplemental Oil and Gas Information (Unaudited) |
NGL RESERVES
| MMbbl | United States | International | Total | |||||||||||||||||||||||||||||
| PROVED DEVELOPED AND UNDEVELOPED RESERVES | ||||||||||||||||||||||||||||||||
| Balance as of December 31, 2021 | 564 | 202 | 766 | |||||||||||||||||||||||||||||
| Revisions of previous estimates | 126 | 2 | 128 | |||||||||||||||||||||||||||||
| Improved recovery | 13 | — | 13 | |||||||||||||||||||||||||||||
| Extensions and discoveries | 36 | — | 36 | |||||||||||||||||||||||||||||
| Purchases of proved reserves | 2 | — | 2 | |||||||||||||||||||||||||||||
| Sales of proved reserves | (4) | — | (4) | |||||||||||||||||||||||||||||
| Production | (83) | (12) | (95) | |||||||||||||||||||||||||||||
| Balance as of December 31, 2022 | 654 | 192 | 846 | |||||||||||||||||||||||||||||
| Revisions of previous estimates | 183 | 2 | 185 | |||||||||||||||||||||||||||||
| Improved recovery | 2 | — | 2 | |||||||||||||||||||||||||||||
| Extensions and discoveries | 45 | — | 45 | |||||||||||||||||||||||||||||
| Purchases of proved reserves | 9 | — | 9 | |||||||||||||||||||||||||||||
| Sales of proved reserves | (1) | — | (1) | |||||||||||||||||||||||||||||
| Production | (90) | (13) | (103) | |||||||||||||||||||||||||||||
| Balance as of December 31, 2023 | 802 | 181 | 983 | |||||||||||||||||||||||||||||
| Revisions of previous estimates(a) | 68 | 9 | 77 | |||||||||||||||||||||||||||||
| Improved recovery | 2 | — | 2 | |||||||||||||||||||||||||||||
| Extensions and discoveries | 100 | — | 100 | |||||||||||||||||||||||||||||
| Purchases of proved reserves | 200 | — | 200 | |||||||||||||||||||||||||||||
| Sales of proved reserves | (10) | — | (10) | |||||||||||||||||||||||||||||
| Production | (102) | (14) | (116) | |||||||||||||||||||||||||||||
| Balance as of December 31, 2024 | 1,060 | 176 | 1,236 | |||||||||||||||||||||||||||||
| PROVED DEVELOPED RESERVES | ||||||||||||||||||||||||||||||||
| December 31, 2021 | 433 | 125 | 558 | |||||||||||||||||||||||||||||
| December 31, 2022 | 444 | 120 | 564 | |||||||||||||||||||||||||||||
| December 31, 2023 | 515 | 124 | 639 | |||||||||||||||||||||||||||||
| December 31, 2024 | 709 | 130 | 839 | |||||||||||||||||||||||||||||
| PROVED UNDEVELOPED RESERVES | ||||||||||||||||||||||||||||||||
| December 31, 2021 | 131 | 77 | 208 | |||||||||||||||||||||||||||||
| December 31, 2022 | 210 | 72 | 282 | |||||||||||||||||||||||||||||
| December 31, 2023 | 287 | 57 | 344 | |||||||||||||||||||||||||||||
| December 31, 2024 | 351 | 46 | 397 |
(a)Revisions of previous estimates in 2024 included the effects of new infill drilling, price revisions and other updates, including changes in reservoir performance, economic conditions, and development plans. Positive revisions of 35 MMbbl were related to additions associated with infill development projects, primarily in the DJ Basin (21 MMbbl) and the Permian Basin (12 MMbbl). Further positive revisions were primarily associated with updates based on reservoir performance (61 MMbbl), primarily due to positive performance revisions in the DJ Basin (31 MMbbl), the Permian Basin (14 MMbbl), and international assets (9 MMbbl). The positive revisions were partially offset by negative revisions of 20 MMbbl associated with management changes in development plans, mainly in the Permian Basin (18 MMbbl). Further negative revisions of 8 MMbbl were associated with negative price revisions, mainly in the Permian Basin.
| 114 | OXY 2024 FORM 10-K |
| table of contents | Supplemental Oil and Gas Information (Unaudited) |
NATURAL GAS RESERVES
| Bcf | United States | International | Total | |||||||||||||||||||||||||||||
| PROVED DEVELOPED AND UNDEVELOPED RESERVES | ||||||||||||||||||||||||||||||||
| Balance as of December 31, 2021 | 3,419 | 2,431 | 5,850 | |||||||||||||||||||||||||||||
| Revisions of previous estimates | 841 | (30) | 811 | |||||||||||||||||||||||||||||
| Improved recovery | 51 | 17 | 68 | |||||||||||||||||||||||||||||
| Extensions and discoveries | 244 | 23 | 267 | |||||||||||||||||||||||||||||
| Purchases of proved reserves | 8 | — | 8 | |||||||||||||||||||||||||||||
| Sales of proved reserves | (45) | — | (45) | |||||||||||||||||||||||||||||
| Production | (445) | (164) | (609) | |||||||||||||||||||||||||||||
| Balance as of December 31, 2022 | 4,073 | 2,277 | 6,350 | |||||||||||||||||||||||||||||
| Revisions of previous estimates | 325 | (6) | 319 | |||||||||||||||||||||||||||||
| Improved recovery | 1 | 17 | 18 | |||||||||||||||||||||||||||||
| Extensions and discoveries | 268 | 5 | 273 | |||||||||||||||||||||||||||||
| Purchases of proved reserves | 50 | — | 50 | |||||||||||||||||||||||||||||
| Sales of proved reserves | (2) | — | (2) | |||||||||||||||||||||||||||||
| Production | (480) | (176) | (656) | |||||||||||||||||||||||||||||
| Balance as of December 31, 2023 | 4,235 | 2,117 | 6,352 | |||||||||||||||||||||||||||||
| Revisions of previous estimates(a) | 215 | 100 | 315 | |||||||||||||||||||||||||||||
| Improved recovery | 2 | 6 | 8 | |||||||||||||||||||||||||||||
| Extensions and discoveries | 532 | 17 | 549 | |||||||||||||||||||||||||||||
| Purchases of proved reserves | 1,016 | — | 1,016 | |||||||||||||||||||||||||||||
| Sales of proved reserves | (58) | — | (58) | |||||||||||||||||||||||||||||
| Production | (548) | (191) | (739) | |||||||||||||||||||||||||||||
| Balance as of December 31, 2024 | 5,394 | 2,049 | 7,443 | |||||||||||||||||||||||||||||
| PROVED DEVELOPED RESERVES | ||||||||||||||||||||||||||||||||
| December 31, 2021 | 2,632 | 1,705 | 4,337 | |||||||||||||||||||||||||||||
| December 31, 2022 | 2,761 | 1,597 | 4,358 | |||||||||||||||||||||||||||||
| December 31, 2023 | 2,770 | 1,507 | 4,277 | |||||||||||||||||||||||||||||
| December 31, 2024 | 3,564 | 1,593 | 5,157 | |||||||||||||||||||||||||||||
| PROVED UNDEVELOPED RESERVES | ||||||||||||||||||||||||||||||||
| December 31, 2021 | 787 | 726 | 1,513 | |||||||||||||||||||||||||||||
| December 31, 2022 | 1,312 | 680 | 1,992 | |||||||||||||||||||||||||||||
| December 31, 2023 | 1,465 | 610 | 2,075 | |||||||||||||||||||||||||||||
| December 31, 2024 | 1,830 | 456 | 2,286 |
(a)Revisions of previous estimates in 2024 included the effects of new infill drilling, price revisions and other updates, including changes in reservoir performance, economic conditions, and development plans. Positive revisions of 203 Bcf were related to additions associated with infill development projects, primarily in the DJ Basin (120 Bcf), the Permian Basin (63 Bcf), and international assets (17 Bcf). Further positive revisions were primarily associated with updates based on reservoir performance (215 Bcf), primarily due to positive performance revisions in the DJ Basin (210 Bcf), international assets (96 Bcf), the Powder River Basin (32 Bcf), and GOA (31 Bcf) that were partially offset by negative performance revisions in the Permian Basin (154 Bcf). The positive revisions were partially offset by negative revisions of 120 Bcf associated with management changes in development plans, mainly in the Permian Basin (100 Bcf) and international assets (18 Bcf). Further negative revisions of 52 Bcf were associated with negative price revisions, mainly in the Permian Basin.
| OXY 2024 FORM 10-K | 115 |
| table of contents | Supplemental Oil and Gas Information (Unaudited) |
TOTAL RESERVES
| MMboe (a) | United States | International | Total | |||||||||||||||||||||||||||||
| PROVED DEVELOPED AND UNDEVELOPED RESERVES | ||||||||||||||||||||||||||||||||
| Balance as of December 31, 2021 | 2,600 | 912 | 3,512 | |||||||||||||||||||||||||||||
| Revisions of previous estimates | 481 | (7) | 474 | |||||||||||||||||||||||||||||
| Improved recovery | 78 | 11 | 89 | |||||||||||||||||||||||||||||
| Extensions and discoveries | 166 | 10 | 176 | |||||||||||||||||||||||||||||
| Purchases of proved reserves | 10 | — | 10 | |||||||||||||||||||||||||||||
| Sales of proved reserves | (21) | — | (21) | |||||||||||||||||||||||||||||
| Production | (342) | (81) | (423) | |||||||||||||||||||||||||||||
| Balance as of December 31, 2022 | 2,972 | 845 | 3,817 | |||||||||||||||||||||||||||||
| Revisions of previous estimates | 314 | 92 | 406 | |||||||||||||||||||||||||||||
| Improved recovery | 9 | 14 | 23 | |||||||||||||||||||||||||||||
| Extensions and discoveries | 149 | 4 | 153 | |||||||||||||||||||||||||||||
| Purchases of proved reserves | 31 | — | 31 | |||||||||||||||||||||||||||||
| Sales of proved reserves | (2) | — | (2) | |||||||||||||||||||||||||||||
| Production | (365) | (81) | (446) | |||||||||||||||||||||||||||||
| Balance as of December 31, 2023 | 3,108 | 874 | 3,982 | |||||||||||||||||||||||||||||
| Revisions of previous estimates (b) | 151 | 19 | 170 | |||||||||||||||||||||||||||||
| Improved recovery | 40 | 7 | 47 | |||||||||||||||||||||||||||||
| Extensions and discoveries | 321 | 5 | 326 | |||||||||||||||||||||||||||||
| Purchases of proved reserves | 623 | — | 623 | |||||||||||||||||||||||||||||
| Sales of proved reserves | (50) | — | (50) | |||||||||||||||||||||||||||||
| Production | (402) | (84) | (486) | |||||||||||||||||||||||||||||
| Balance as of December 31, 2024 | 3,791 | 821 | 4,612 | |||||||||||||||||||||||||||||
| PROVED DEVELOPED RESERVES | ||||||||||||||||||||||||||||||||
| December 31, 2021 | 2,012 | 635 | 2,647 | |||||||||||||||||||||||||||||
| December 31, 2022 | 2,112 | 586 | 2,698 | |||||||||||||||||||||||||||||
| December 31, 2023 | 2,117 | 633 | 2,750 | |||||||||||||||||||||||||||||
| December 31, 2024 | 2,546 | 645 | 3,191 | |||||||||||||||||||||||||||||
| PROVED UNDEVELOPED RESERVES | ||||||||||||||||||||||||||||||||
| December 31, 2021 | 588 | 277 | 865 | |||||||||||||||||||||||||||||
| December 31, 2022 | 860 | 259 | 1,119 | |||||||||||||||||||||||||||||
| December 31, 2023 | 991 | 241 | 1,232 | |||||||||||||||||||||||||||||
| December 31, 2024 | 1,245 | 176 | 1,421 |
(a)Natural gas volumes have been converted to Boe based on an energy content of six Mcf of gas to one barrel of oil. Conversion to Boe does not necessarily result in price equivalency.
(b)Revisions of previous estimates in 2024 included the effects of new infill drilling, price revisions and other updates, including changes in reservoir performance, economic conditions, and development plans. Positive revisions of 112 MMboe were related to additions associated with infill development projects, mainly in the DJ Basin (55 MMboe), the Permian Basin (45 MMboe), and international assets (8 MMboe). Further positive revisions were primarily associated with updates based on reservoir performance (152 MMboe), primarily due to positive performance revisions in the DJ Basin (81 MMboe), GOA (41 MMboe), international assets (32 MMboe), and the Powder River Basin (11 MMboe). The positive revisions were partially offset by negative revisions of 87 MMboe associated with management changes in development plans, mainly in the Permian Basin (53 MMboe), Oman (19 MMboe), and GOA (13 MMboe). Further negative revisions of 29 MMboe were associated with negative price revisions, mainly in the Permian Basin.
| 116 | OXY 2024 FORM 10-K |
| table of contents | Supplemental Oil and Gas Information (Unaudited) |
CAPITALIZED COSTS
Capitalized costs relating to oil and gas producing activities and related accumulated DD&A were as follows:
| millions | United States | International | Total | |||||||||||||||||||||||||||||
| December 31, 2024 | ||||||||||||||||||||||||||||||||
| Proved properties | $ | 91,017 | $ | 17,072 | $ | 108,089 | ||||||||||||||||||||||||||
| Unproved properties | 13,626 | 159 | 13,785 | |||||||||||||||||||||||||||||
| Total capitalized costs (a) | 104,643 | 17,231 | 121,874 | |||||||||||||||||||||||||||||
| Proved properties depreciation, depletion and amortization | (45,268) | (13,437) | (58,705) | |||||||||||||||||||||||||||||
| Unproved properties valuation | (3,598) | — | (3,598) | |||||||||||||||||||||||||||||
| Total Accumulated depreciation, depletion and amortization | (48,866) | (13,437) | (62,303) | |||||||||||||||||||||||||||||
| Net capitalized costs | $ | 55,777 | $ | 3,794 | $ | 59,571 | ||||||||||||||||||||||||||
| December 31, 2023 | ||||||||||||||||||||||||||||||||
| Proved properties | $ | 78,188 | $ | 16,582 | $ | 94,770 | ||||||||||||||||||||||||||
| Unproved properties | 14,298 | 146 | 14,444 | |||||||||||||||||||||||||||||
| Total capitalized costs (a) | 92,486 | 16,728 | 109,214 | |||||||||||||||||||||||||||||
| Proved properties depreciation, depletion and amortization | (42,102) | (12,940) | (55,042) | |||||||||||||||||||||||||||||
| Unproved properties valuation | (4,233) | — | (4,233) | |||||||||||||||||||||||||||||
| Total Accumulated depreciation, depletion and amortization | (46,335) | (12,940) | (59,275) | |||||||||||||||||||||||||||||
| Net capitalized costs | $ | 46,151 | $ | 3,788 | $ | 49,939 | ||||||||||||||||||||||||||
| December 31, 2022 | ||||||||||||||||||||||||||||||||
| Proved properties | $ | 71,314 | $ | 15,733 | $ | 87,047 | ||||||||||||||||||||||||||
| Unproved properties | 17,251 | 189 | 17,440 | |||||||||||||||||||||||||||||
| Total capitalized costs (a) | 88,565 | 15,922 | 104,487 | |||||||||||||||||||||||||||||
| Proved properties depreciation, depletion and amortization | (36,727) | (12,373) | (49,100) | |||||||||||||||||||||||||||||
| Unproved properties valuation | (4,781) | (27) | (4,808) | |||||||||||||||||||||||||||||
| Total Accumulated depreciation, depletion and amortization | (41,508) | (12,400) | (53,908) | |||||||||||||||||||||||||||||
| Net capitalized costs | $ | 47,057 | $ | 3,522 | $ | 50,579 |
(a)Included acquisition costs, development costs, capitalized interest and AROs.
| OXY 2024 FORM 10-K | 117 |
| table of contents | Supplemental Oil and Gas Information (Unaudited) |
COSTS INCURRED
Costs incurred in oil and gas property acquisition, exploration and development activities, whether capitalized or expensed, were as follows:
| millions | United States | International | Total | |||||||||||||||||||||||||||||
| For the year ended December 31, 2024 | ||||||||||||||||||||||||||||||||
| Property acquisition costs (a) | ||||||||||||||||||||||||||||||||
| Proved properties | $ | 8,963 | $ | 8 | $ | 8,971 | ||||||||||||||||||||||||||
| Unproved properties | 3,178 | — | 3,178 | |||||||||||||||||||||||||||||
| Exploration costs | 544 | 180 | 724 | |||||||||||||||||||||||||||||
| Development costs | 4,584 | 500 | 5,084 | |||||||||||||||||||||||||||||
| Costs incurred | $ | 17,269 | $ | 688 | $ | 17,957 | ||||||||||||||||||||||||||
| For the year ended December 31, 2023 | ||||||||||||||||||||||||||||||||
| Property acquisition costs (a) | ||||||||||||||||||||||||||||||||
| Proved properties | $ | 112 | $ | 288 | $ | 400 | ||||||||||||||||||||||||||
| Unproved properties | 143 | — | 143 | |||||||||||||||||||||||||||||
| Exploration costs | 743 | 150 | 893 | |||||||||||||||||||||||||||||
| Development costs | 3,957 | 543 | 4,500 | |||||||||||||||||||||||||||||
| Costs incurred | $ | 4,955 | $ | 981 | $ | 5,936 | ||||||||||||||||||||||||||
| For the year ended December 31, 2022 | ||||||||||||||||||||||||||||||||
| Property acquisition costs (a) | ||||||||||||||||||||||||||||||||
| Proved properties | $ | 496 | $ | 3 | $ | 499 | ||||||||||||||||||||||||||
| Unproved properties | 488 | — | 488 | |||||||||||||||||||||||||||||
| Exploration costs | 279 | 175 | 454 | |||||||||||||||||||||||||||||
| Development costs | 3,083 | 423 | 3,506 | |||||||||||||||||||||||||||||
| Costs incurred | $ | 4,346 | $ | 601 | $ | 4,947 |
(a)Included $30 million, $120 million and $340 million in property acquisition costs related to non-monetary exchange transactions for the years ended December 31, 2024, 2023 and 2022, respectively.
| 118 | OXY 2024 FORM 10-K |
| table of contents | Supplemental Oil and Gas Information (Unaudited) |
RESULTS OF OPERATIONS
Occidental’s oil and gas producing activities for continuing operations, which exclude items such as asset divestitures, corporate overhead, and interest, were as follows:
| millions | United States | International | Total | |||||||||||||||||||||||||||||
| FOR THE YEAR ENDED DECEMBER 31, 2024 | ||||||||||||||||||||||||||||||||
| Revenues | $ | 17,974 | $ | 3,693 | $ | 21,667 | ||||||||||||||||||||||||||
| Lease operating costs | 3,680 | 1,058 | 4,738 | |||||||||||||||||||||||||||||
| Transportation costs | 1,522 | 61 | 1,583 | |||||||||||||||||||||||||||||
| Other operating expenses | 1,088 | 268 | 1,356 | |||||||||||||||||||||||||||||
| Depreciation, depletion and amortization | 6,049 | 516 | 6,565 | |||||||||||||||||||||||||||||
| Taxes other than on income | 1,004 | 22 | 1,026 | |||||||||||||||||||||||||||||
| Exploration expenses | 119 | 156 | 275 | |||||||||||||||||||||||||||||
| Pretax income before impairments and other charges | 4,512 | 1,612 | 6,124 | |||||||||||||||||||||||||||||
| Asset impairments and other charges | 334 | — | 334 | |||||||||||||||||||||||||||||
| Pretax income | 4,178 | 1,612 | 5,790 | |||||||||||||||||||||||||||||
| Income tax expense (a) | 885 | 599 | 1,484 | |||||||||||||||||||||||||||||
| Results of operations | $ | 3,293 | $ | 1,013 | $ | 4,306 | ||||||||||||||||||||||||||
| FOR THE YEAR ENDED DECEMBER 31, 2023 | ||||||||||||||||||||||||||||||||
| Revenues | $ | 17,494 | $ | 3,766 | $ | 21,260 | ||||||||||||||||||||||||||
| Lease operating costs | 3,669 | 1,008 | 4,677 | |||||||||||||||||||||||||||||
| Transportation costs | 1,367 | 60 | 1,427 | |||||||||||||||||||||||||||||
| Other operating expenses | 1,058 | 194 | 1,252 | |||||||||||||||||||||||||||||
| Depreciation, depletion and amortization | 5,559 | 553 | 6,112 | |||||||||||||||||||||||||||||
| Taxes other than on income | 959 | 117 | 1,076 | |||||||||||||||||||||||||||||
| Exploration expenses | 323 | 118 | 441 | |||||||||||||||||||||||||||||
| Pretax income before impairments and other charges | 4,559 | 1,716 | 6,275 | |||||||||||||||||||||||||||||
| Asset impairments and other charges | 209 | — | 209 | |||||||||||||||||||||||||||||
| Pretax income | 4,350 | 1,716 | 6,066 | |||||||||||||||||||||||||||||
| Income tax expense (a) | 933 | 746 | 1,679 | |||||||||||||||||||||||||||||
| Results of operations | $ | 3,417 | $ | 970 | $ | 4,387 | ||||||||||||||||||||||||||
| FOR THE YEAR ENDED DECEMBER 31, 2022 | ||||||||||||||||||||||||||||||||
| Revenues | $ | 22,487 | $ | 4,671 | $ | 27,158 | ||||||||||||||||||||||||||
| Lease operating costs | 3,050 | 978 | 4,028 | |||||||||||||||||||||||||||||
| Transportation costs | 1,324 | 69 | 1,393 | |||||||||||||||||||||||||||||
| Other operating expenses | 981 | 235 | 1,216 | |||||||||||||||||||||||||||||
| Depreciation, depletion and amortization | 5,608 | 571 | 6,179 | |||||||||||||||||||||||||||||
| Taxes other than on income | 1,236 | 299 | 1,535 | |||||||||||||||||||||||||||||
| Exploration expenses | 113 | 103 | 216 | |||||||||||||||||||||||||||||
| Pretax income | 10,175 | 2,416 | 12,591 | |||||||||||||||||||||||||||||
| Income tax expense (a) | 2,213 | 964 | 3,177 | |||||||||||||||||||||||||||||
| Results of operations | $ | 7,962 | $ | 1,452 | $ | 9,414 |
(a)U.S. federal income taxes reflect certain expenses related to oil and gas activities allocated for U.S. income tax purposes. These amounts are computed using the statutory rate in effect during the period.
| OXY 2024 FORM 10-K | 119 |
| table of contents | Supplemental Oil and Gas Information (Unaudited) |
RESULTS PER UNIT OF PRODUCTION FOR CONTINUING OPERATIONS
| $/Boe (a) | United States | International | Total | |||||||||||||||||||||||||||||
| FOR THE YEAR ENDED DECEMBER 31, 2024 | ||||||||||||||||||||||||||||||||
| Revenues (b) | $ | 44.68 | $ | 44.11 | $ | 44.59 | ||||||||||||||||||||||||||
| Lease operating costs | 9.15 | 12.64 | 9.75 | |||||||||||||||||||||||||||||
| Transportation costs | 3.78 | 0.73 | 3.26 | |||||||||||||||||||||||||||||
| Other operating expenses | 2.70 | 3.20 | 2.79 | |||||||||||||||||||||||||||||
| Depreciation, depletion and amortization | 15.04 | 6.16 | 13.51 | |||||||||||||||||||||||||||||
| Taxes other than on income | 2.50 | 0.26 | 2.11 | |||||||||||||||||||||||||||||
| Exploration expenses | 0.30 | 1.87 | 0.57 | |||||||||||||||||||||||||||||
| Pretax income before impairments and other charges | 11.21 | 19.25 | 12.60 | |||||||||||||||||||||||||||||
| Asset impairments and other charges | 0.83 | — | 0.69 | |||||||||||||||||||||||||||||
| Pretax income | 10.38 | 19.25 | 11.91 | |||||||||||||||||||||||||||||
| Income tax expense (c) | 2.20 | 7.15 | 3.05 | |||||||||||||||||||||||||||||
| Results of operations | $ | 8.18 | $ | 12.10 | $ | 8.86 | ||||||||||||||||||||||||||
| FOR THE YEAR ENDED DECEMBER 31, 2023 | ||||||||||||||||||||||||||||||||
| Revenues (b) | $ | 47.91 | $ | 46.49 | $ | 47.66 | ||||||||||||||||||||||||||
| Lease operating costs | 10.05 | 12.45 | 10.48 | |||||||||||||||||||||||||||||
| Transportation costs | 3.74 | 0.74 | 3.20 | |||||||||||||||||||||||||||||
| Other operating expenses | 2.90 | 2.39 | 2.81 | |||||||||||||||||||||||||||||
| Depreciation, depletion and amortization | 15.22 | 6.83 | 13.70 | |||||||||||||||||||||||||||||
| Taxes other than on income | 2.63 | 1.44 | 2.41 | |||||||||||||||||||||||||||||
| Exploration expenses | 0.88 | 1.47 | 0.99 | |||||||||||||||||||||||||||||
| Pretax income before impairments and other charges | 12.49 | 21.17 | 14.07 | |||||||||||||||||||||||||||||
| Asset impairments and other charges | 0.57 | — | 0.47 | |||||||||||||||||||||||||||||
| Pretax income | 11.92 | 21.17 | 13.60 | |||||||||||||||||||||||||||||
| Income tax expense (c) | 2.56 | 9.21 | 3.76 | |||||||||||||||||||||||||||||
| Results of operations | $ | 9.36 | $ | 11.96 | $ | 9.84 | ||||||||||||||||||||||||||
| FOR THE YEAR ENDED DECEMBER 31, 2022 | ||||||||||||||||||||||||||||||||
| Revenues (b) | $ | 65.77 | $ | 57.67 | $ | 64.22 | ||||||||||||||||||||||||||
| Lease operating costs | 8.92 | 12.07 | 9.52 | |||||||||||||||||||||||||||||
| Transportation costs | 3.87 | 0.85 | 3.29 | |||||||||||||||||||||||||||||
| Other operating expenses | 2.87 | 2.90 | 2.88 | |||||||||||||||||||||||||||||
| Depreciation, depletion and amortization | 16.40 | 7.05 | 14.61 | |||||||||||||||||||||||||||||
| Taxes other than on income | 3.61 | 3.69 | 3.63 | |||||||||||||||||||||||||||||
| Exploration expenses | 0.33 | 1.27 | 0.51 | |||||||||||||||||||||||||||||
| Pretax income before impairments and other charges | 29.77 | 29.84 | 29.78 | |||||||||||||||||||||||||||||
| Asset impairments and other charges | — | — | — | |||||||||||||||||||||||||||||
| Pretax income | 29.77 | 29.84 | 29.78 | |||||||||||||||||||||||||||||
| Income tax expense (c) | 6.47 | 11.90 | 7.51 | |||||||||||||||||||||||||||||
| Results of operations | $ | 23.30 | $ | 17.94 | $ | 22.27 |
(a)Natural gas volumes have been converted to Boe based on energy content of six Mcf of gas to one barrel of oil.
(b)Revenues are net of royalty payments.
(c)U.S. federal income taxes reflect certain expenses related to oil and gas activities allocated for U.S. income tax purposes. These amounts are computed using the statutory rate in effect during the period.
| 120 | OXY 2024 FORM 10-K |
| table of contents | Supplemental Oil and Gas Information (Unaudited) |
STANDARDIZED MEASURE, INCLUDING YEAR-TO-YEAR CHANGES THEREIN, OF DISCOUNTED FUTURE NET CASH FLOWS
For purposes of the following disclosures, future cash flows were computed by applying to Occidental’s proved oil and gas reserves the unweighted arithmetic average of the first-day-of-the-month price for each month within the years ended December 31, 2024, 2023 and 2022, respectively, unless prices were defined by contractual arrangements, and exclude escalations based upon future conditions. The realized prices used to calculate future cash flows vary by producing area and market conditions. Future operating and capital costs were forecast using the current cost environment applied to expectations of future operating and development activities to develop and produce proved reserves at year end.
Future income tax expenses were computed by applying, generally, year-end statutory tax rates (adjusted for permanent differences, tax credits, allowances and foreign income repatriation considerations) to the estimated net future pre-tax cash flows. The discount was computed by application of a 10% discount factor. The calculations assumed the continuation of existing economic, operating and contractual conditions as of December 31, 2024, 2023 and 2022. Such assumptions, which are required by regulation, have not always proven accurate in the past. Other valid assumptions would give rise to substantially different results.
STANDARDIZED MEASURE OF DISCOUNTED FUTURE NET CASH FLOWS
| millions | United States | International | Total | |||||||||||||||||||||||||||||
| Balance as of December 31, 2024 | ||||||||||||||||||||||||||||||||
| Future cash inflows | $ | 159,735 | $ | 31,110 | $ | 190,845 | ||||||||||||||||||||||||||
| Future costs | ||||||||||||||||||||||||||||||||
| Production costs and other operating | (69,335) | (11,652) | (80,987) | |||||||||||||||||||||||||||||
| Development costs (a) | (22,149) | (2,507) | (24,656) | |||||||||||||||||||||||||||||
| Future income tax expense | (9,034) | (3,339) | (12,373) | |||||||||||||||||||||||||||||
| Future net cash flows | 59,217 | 13,612 | 72,829 | |||||||||||||||||||||||||||||
| 10% discount factor | (24,480) | (5,478) | (29,958) | |||||||||||||||||||||||||||||
| Standardized measure of discounted future net cash flows | $ | 34,737 | $ | 8,134 | $ | 42,871 | ||||||||||||||||||||||||||
| Balance as of December 31, 2023 | ||||||||||||||||||||||||||||||||
| Future cash inflows | $ | 143,471 | $ | 35,020 | $ | 178,491 | ||||||||||||||||||||||||||
| Future costs | ||||||||||||||||||||||||||||||||
| Production costs and other operating | (58,864) | (10,921) | (69,785) | |||||||||||||||||||||||||||||
| Development costs (a) | (19,404) | (3,706) | (23,110) | |||||||||||||||||||||||||||||
| Future income tax expense | (10,441) | (4,895) | (15,336) | |||||||||||||||||||||||||||||
| Future net cash flows | 54,762 | 15,498 | 70,260 | |||||||||||||||||||||||||||||
| 10% discount factor | (23,715) | (6,243) | (29,958) | |||||||||||||||||||||||||||||
| Standardized measure of discounted future net cash flows | $ | 31,047 | $ | 9,255 | $ | 40,302 | ||||||||||||||||||||||||||
| Balance as of December 31, 2022 | ||||||||||||||||||||||||||||||||
| Future cash inflows | $ | 186,942 | $ | 34,514 | $ | 221,456 | ||||||||||||||||||||||||||
| Future costs | ||||||||||||||||||||||||||||||||
| Production costs and other operating | (68,068) | (9,468) | (77,536) | |||||||||||||||||||||||||||||
| Development costs (a) | (14,845) | (2,498) | (17,343) | |||||||||||||||||||||||||||||
| Future income tax expense | (18,633) | (4,984) | (23,617) | |||||||||||||||||||||||||||||
| Future net cash flows | 85,396 | 17,564 | 102,960 | |||||||||||||||||||||||||||||
| 10% discount factor | (37,340) | (7,468) | (44,808) | |||||||||||||||||||||||||||||
| Standardized measure of discounted future net cash flows | $ | 48,056 | $ | 10,096 | $ | 58,152 |
(a)Included ARO costs.
| OXY 2024 FORM 10-K | 121 |
| table of contents | Supplemental Oil and Gas Information (Unaudited) |
CHANGES IN THE STANDARDIZED MEASURE OF DISCOUNTED FUTURE NET CASH FLOWS FROM PROVED RESERVE QUANTITIES (a)
| millions | 2024 | 2023 | 2022 | |||||||||||||||||
| Balance as of January 1 | $ | 40,302 | $ | 58,152 | $ | 33,824 | ||||||||||||||
| Sales and transfers of oil and gas produced, net of production costs and other operating expenses | (14,577) | (14,318) | (20,547) | |||||||||||||||||
| Net change in prices received per barrel, net of production costs and other operating expenses | (4,903) | (23,774) | 29,798 | |||||||||||||||||
| Extensions, discoveries and improved recovery, net of future production and development costs | 3,949 | 2,910 | 5,390 | |||||||||||||||||
| Change in estimated future development costs | (122) | (3,430) | (1,562) | |||||||||||||||||
| Revisions of quantity estimates | 3,574 | 6,313 | 10,481 | |||||||||||||||||
| Previously estimated development costs incurred during the period | 3,440 | 2,584 | 1,813 | |||||||||||||||||
| Accretion of discount | 4,052 | 6,152 | 3,492 | |||||||||||||||||
| Net change in income taxes | 1,581 | 5,575 | (5,961) | |||||||||||||||||
| Purchases and sales of reserves in place, net | 8,050 | 404 | (158) | |||||||||||||||||
| Changes in production rates and other | (2,475) | (266) | 1,582 | |||||||||||||||||
| Net change | 2,569 | (17,850) | 24,328 | |||||||||||||||||
| Balance as of December 31 | $ | 42,871 | $ | 40,302 | $ | 58,152 |
(a) Excluded results from discontinued operations.
| 122 | OXY 2024 FORM 10-K |
| table of contents | Supplemental Oil and Gas Information (Unaudited) |
NET PRODUCTIVE AND DRY— EXPLORATORY AND DEVELOPMENT WELLS COMPLETED
The following table sets forth, for each year in the three-year period ended December 31, 2024, Occidental’s net productive and dry exploratory and development wells completed:
| United States | International | Total | ||||||||||||||||||
| 2024 | ||||||||||||||||||||
| Oil | ||||||||||||||||||||
| Exploratory | 29 | 5 | 34 | |||||||||||||||||
| Development | 355 | 34 | 389 | |||||||||||||||||
| Gas | ||||||||||||||||||||
| Exploratory | 1 | 2 | 3 | |||||||||||||||||
| Development | 26 | 4 | 30 | |||||||||||||||||
| Dry | ||||||||||||||||||||
| Exploratory | 1 | 7 | 8 | |||||||||||||||||
| Development | — | — | — | |||||||||||||||||
| 2023 | ||||||||||||||||||||
| Oil | ||||||||||||||||||||
| Exploratory | 25 | 13 | 38 | |||||||||||||||||
| Development | 420 | 63 | 483 | |||||||||||||||||
| Gas | ||||||||||||||||||||
| Exploratory | 1 | 1 | 2 | |||||||||||||||||
| Development | 38 | 3 | 41 | |||||||||||||||||
| Dry | ||||||||||||||||||||
| Exploratory | 5 | 8 | 13 | |||||||||||||||||
| Development | 7 | — | 7 | |||||||||||||||||
| 2022 | ||||||||||||||||||||
| Oil | ||||||||||||||||||||
| Exploratory | 9 | 10 | 19 | |||||||||||||||||
| Development | 265 | 32 | 297 | |||||||||||||||||
| Gas | ||||||||||||||||||||
| Exploratory | — | — | — | |||||||||||||||||
| Development | 3 | 2 | 5 | |||||||||||||||||
| Dry | ||||||||||||||||||||
| Exploratory | — | 5 | 5 | |||||||||||||||||
| Development | 1 | — | 1 | |||||||||||||||||
PRODUCTIVE OIL AND GAS WELLS
The following table sets forth, as of December 31, 2024, Occidental’s productive oil and gas wells (both producing and capable of production):
| United States | International | Total | ||||||||||||||||||
| Gross (a) | Net (b) | Gross (a) | Net (b) | Gross (a) | Net (b) | |||||||||||||||
| Oil | 19,536 | 16,747 | 2,931 | 1,375 | 22,467 | 18,122 | ||||||||||||||
| Gas | 3,144 | 2,616 | 162 | 100 | 3,306 | 2,716 | ||||||||||||||
| Multiple completion wells included above | 1,909 | 1,758 | 1 | 1 | 1,910 | 1,759 |
(a)The total number of wells in which interests are owned.
(b)The sum of fractional interests.
| OXY 2024 FORM 10-K | 123 |
| table of contents | Supplemental Oil and Gas Information (Unaudited) |
PARTICIPATION IN WELLS BEING DRILLED OR PENDING COMPLETION
The following table sets forth, as of December 31, 2024, Occidental’s participation in exploratory and development wells being drilled:
| United States | International | Total | ||||||||||||||||||||||||
| Exploratory and development wells being drilled | ||||||||||||||||||||||||||
| Gross | 153 | 15 | 168 | |||||||||||||||||||||||
| Net | 114 | 11 | 125 | |||||||||||||||||||||||
| Exploratory and development wells pending completion (a) | ||||||||||||||||||||||||||
| Gross | 143 | — | 143 | |||||||||||||||||||||||
| Net | 86 | — | 86 |
(a)Wells suspended or waiting on completion include exploration and development wells where drilling has occurred, but the wells are awaiting the completion of hydraulic fracturing or other completion activities or the resumption of drilling in the future. There were 63 MMboe of PUD reserves primarily assigned to U.S. onshore development wells suspended or waiting on completion as of December 31, 2024. Occidental expects to convert all of these PUD reserves to developed status within five years of their initial disclosure.
As of December 31, 2024, Occidental was participating in 107 and 33 gross pressure-maintenance projects in the United States and internationally, respectively. In the United States, these projects primarily consisted of waterfloods and CO2 floods, and in the Middle East and North Africa, these projects consisted mostly of waterfloods.
OIL AND GAS ACREAGE
The following table sets forth, as of December 31, 2024, Occidental’s holdings of developed and undeveloped oil and gas acreage:
| thousands | United States | International | Total | |||||||||||||||||||||||
| Developed (a) | ||||||||||||||||||||||||||
| Gross (b) | 5,755 | 1,271 | 7,026 | |||||||||||||||||||||||
| Net (c) | 3,847 | 471 | 4,318 | |||||||||||||||||||||||
| Undeveloped (d) | ||||||||||||||||||||||||||
| Gross (b) | 1,418 | 8,373 | 9,791 | |||||||||||||||||||||||
| Net (c) | 906 | 7,305 | 8,211 | |||||||||||||||||||||||
| Fee Mineral Ownership (e) | ||||||||||||||||||||||||||
| Gross (b) | 8,051 | — | 8,051 | |||||||||||||||||||||||
| Net (c) | 4,583 | — | 4,583 |
(a)Acres spaced or assigned to productive wells.
(b)Total acres in which interests are held.
(c)Sum of the fractional interests owned based on working interests, or interests under PSCs and other economic arrangements.
(d)Acres on which wells have not been drilled or completed to a point that would permit the production of commercial quantities of oil and gas, regardless of whether the acreage contains proved reserves.
(e)Occidental’s fee mineral acreage is primarily undeveloped.
Occidental’s investment in developed and undeveloped acreage comprises numerous concessions, blocks and leases. Work programs are designed to ensure that the exploration potential of any property is fully evaluated before the contractual expiration date. In some instances, Occidental may elect to relinquish acreage in advance of the contractual expiration date if the evaluation process is complete and there is not a business basis for extension. In cases where additional time may be required to fully evaluate acreage, Occidental has generally been successful in obtaining extensions. Scheduled lease and concession expirations for undeveloped acreage over the next three years are not expected to have a material adverse impact on Occidental.
| 124 | OXY 2024 FORM 10-K |
| table of contents | Supplemental Oil and Gas Information (Unaudited) |
OIL, NGL AND NATURAL GAS SALES VOLUMES PER DAY
The following tables set forth the sales volumes from ongoing operations of oil, NGL and natural gas per day for each of the three years in the period ended December 31, 2024. The differences between the sales and production volumes per day are negligible and are generally due to the timing of shipments at Occidental’s international locations where product is loaded onto tankers. Natural gas volumes have been converted to Boe based on energy content of six Mcf of gas to one barrel of oil.
| Sales per Day from Ongoing Operations (Mboe/d) | 2024 | 2023 | 2022 | |||||||||||||||||
| United States | ||||||||||||||||||||
| Permian | 664 | 584 | 513 | |||||||||||||||||
| Rockies & Other Domestic | 310 | 271 | 277 | |||||||||||||||||
| Gulf of America | 125 | 145 | 147 | |||||||||||||||||
| Total | 1,099 | 1,000 | 937 | |||||||||||||||||
| International | ||||||||||||||||||||
| Algeria and Other International | 33 | 35 | 48 | |||||||||||||||||
| Al Hosn Gas | 91 | 82 | 73 | |||||||||||||||||
| Dolphin | 39 | 39 | 37 | |||||||||||||||||
| Oman | 66 | 66 | 64 | |||||||||||||||||
| Total | 229 | 222 | 222 | |||||||||||||||||
| Total Sales (Mboe/d) | 1,328 | 1,222 | 1,159 |
| OXY 2024 FORM 10-K | 125 |
| table of contents | Supplemental Oil and Gas Information (Unaudited) |
| Sales per Day by Products from Ongoing Operations | 2024 | 2023 | 2022 | |||||||||||||||||
| United States | ||||||||||||||||||||
| Oil (Mbbl/d) | ||||||||||||||||||||
| Permian | 370 | 337 | 303 | |||||||||||||||||
| Rockies & Other Domestic | 96 | 77 | 82 | |||||||||||||||||
| Gulf of America | 105 | 120 | 122 | |||||||||||||||||
| Total | 571 | 534 | 507 | |||||||||||||||||
| NGL (Mbbl/d) | ||||||||||||||||||||
| Permian | 163 | 140 | 119 | |||||||||||||||||
| Rockies & Other Domestic | 106 | 97 | 97 | |||||||||||||||||
| Gulf of America | 9 | 11 | 11 | |||||||||||||||||
| Total | 278 | 248 | 227 | |||||||||||||||||
| Natural gas (MMcf/d) | ||||||||||||||||||||
| Permian | 783 | 644 | 545 | |||||||||||||||||
| Rockies & Other Domestic | 649 | 584 | 590 | |||||||||||||||||
| Gulf of America | 66 | 81 | 81 | |||||||||||||||||
| Total | 1,498 | 1,309 | 1,216 | |||||||||||||||||
| International | ||||||||||||||||||||
| Oil (Mbbl/d) | ||||||||||||||||||||
| Algeria and Other International | 27 | 29 | 42 | |||||||||||||||||
| Al Hosn Gas | 15 | 14 | 12 | |||||||||||||||||
| Dolphin | 6 | 6 | 6 | |||||||||||||||||
| Oman | 56 | 57 | 53 | |||||||||||||||||
| Total | 104 | 106 | 113 | |||||||||||||||||
| NGL (Mbbl/d) | ||||||||||||||||||||
| Algeria and Other International | 3 | 3 | 4 | |||||||||||||||||
| Al Hosn Gas | 27 | 23 | 23 | |||||||||||||||||
| Dolphin | 8 | 8 | 7 | |||||||||||||||||
| Total | 38 | 34 | 34 | |||||||||||||||||
| Natural gas (MMcf/d) | ||||||||||||||||||||
| Algeria and Other International | 18 | 15 | 12 | |||||||||||||||||
| Al Hosn Gas | 293 | 267 | 227 | |||||||||||||||||
| Dolphin | 150 | 150 | 142 | |||||||||||||||||
| Oman | 63 | 57 | 69 | |||||||||||||||||
| Total | 524 | 489 | 450 | |||||||||||||||||
| Total Sales from Ongoing Operations (Mboe/d) | 1,328 | 1,222 | 1,159 |
| 126 | OXY 2024 FORM 10-K |
| Schedule II – Valuation and Qualifying Accounts | Occidental Petroleum Corporation and Subsidiaries |
| Additions | |||||||||||||||||||||||||||||||||||
| millions | Balance at Beginning of Period | Charged to Costs and Expenses | Charged to Other Accounts | Deductions (a) | Balance at End of Period | ||||||||||||||||||||||||||||||
| 2024 | |||||||||||||||||||||||||||||||||||
| Allowance for doubtful accounts | $ | 44 | $ | 98 | $ | (1) | $ | 1 | $ | 142 | (b) | ||||||||||||||||||||||||
| Environmental, litigation, tax and other reserves | $ | 3,793 | $ | 869 | $ | 142 | $ | (542) | $ | 4,262 | (c) | ||||||||||||||||||||||||
| 2023 | |||||||||||||||||||||||||||||||||||
| Allowance for doubtful accounts | $ | 904 | $ | (235) | $ | — | $ | (625) | $ | 44 | (b) | ||||||||||||||||||||||||
| Environmental, litigation, tax and other reserves | $ | 3,712 | $ | 328 | $ | 50 | $ | (297) | $ | 3,793 | (c) | ||||||||||||||||||||||||
| 2022 | |||||||||||||||||||||||||||||||||||
| Allowance for doubtful accounts | $ | 867 | $ | 37 | $ | — | $ | — | $ | 904 | (b) | ||||||||||||||||||||||||
| Environmental, litigation, tax and other reserves | $ | 3,164 | $ | 714 | $ | 138 | $ | (304) | $ | 3,712 | (c) |
(a)Primarily represents payments except for 2023 allowance for doubtful accounts, where Occidental reversed the receivable and allowance related to the Maxus settlement. See Note 13 - Lawsuits, Claims, Commitments and Contingencies
(b)Of these amounts, $58 million, $43 million and $44 million in 2024, 2023, and 2022, respectively, were classified as current.
(c)Of these amounts, $226 million, $215 million and $266 million in 2024, 2023, and 2022, respectively, were classified as current.
Note: The amounts presented represent continuing operations.
| OXY 2024 FORM 10-K | 127 |
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