OXY Delivers Strong Q1 2025 Performance: Record Operating Cash Flow, Efficiency Gains, and Key Developments in Oman
Occidental (OXY) has reported a stellar first quarter of 2025, with all three segments delivering strong results. The company's President and Chief Executive Officer, Vicki Hollub, highlighted the outstanding performance across the portfolio during the recent earnings conference call.
Notably, OXY generated $3 billion in operating cash flow before working capital in the first quarter, while handling challenges from weather and seasonality. The oil and gas business produced at just over 1.39 million BOE per day, meeting the midpoint of the company's production guidance. Domestic oil and gas operating cost of $9.05 per BOE came in substantially below initial expectations, reflecting the team's relentless pursuit of efficiency, cost management, and safe operations.
OXY's 2025 development activities are progressing well, alongside operational excellence and innovation initiatives discussed last quarter. The company is seeing meaningful advancements in one of its key focus areas – efficiency-driven well cost reductions. In the Permian, enhanced well designs and strong execution have resulted in a 15% improvement in drilling duration per well versus last year, with particularly notable performance in the Delaware Basin.
These achievements, along with more efficient completions and pad utilization, have reduced OXY's Permian unconventional well costs by more than 10% compared to last year. The company expects to bring more wells online and with slightly increased production even with a reduced rig count, thanks to accelerated cycle times and improved time to market.
Turning to Oman, OXY is in advanced negotiations with the government to extend the current Block 53 contract by 15 years to 2050. The proposed extension would cover all reservoirs, including both low decline enhanced oil recovery and primary production across stacked pay formations. The company sees the potential to unlock more than 800 million gross barrels of additional resources that offer competitive returns.
While final negotiations and a formal agreement are still pending, OXY believes this extension will enhance its cash flow beginning in 2025. The company is proud of the deep roots, strong relationships, and mutually beneficial partnerships it has built in Oman over the past several decades. These partnerships have been central to their shared success, including recent exploration achievements, and momentum continues to build.
North Oman recently made a significant gas and condensate discovery with estimated resources in place exceeding 250 million barrels of oil equivalent. While it is still early days, appraisal and development plans are under evaluation. The resource is advantageously located within existing infrastructure.
OXYChem's performance also exceeded expectations, delivering $215 million on an adjusted basis. The company continues to deliver strong results across its segments, driven by operational excellence and strategic initiatives."
