OXY - Occidental Petroleum Corporation

08/06/2025 | Press release | Distributed by Public on 08/06/2025 14:22

Quarterly Report for Quarter Ending June 30, 2025 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion should be read together with the Consolidated Condensed Financial Statements and the notes to the Consolidated Condensed Financial Statements, which are included in this report in Part I, Item 1; the information set forth in Risk Factors under Part II, Item 1A; the Consolidated Financial Statements and the notes to the Consolidated Financial Statements, which are included in Part II, Item 8 of Occidental's 2024 Form 10-K; and the information set forth in Risk Factors under Part I, Item 1A of the 2024 Form 10-K.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Portions of this report contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact are "forward-looking statements" for purposes of federal and state securities laws, including, but not limited to: any projections of earnings, revenue or other financial items or future financial position or sources of financing; any statements of the plans, strategies and objectives of management for future operations or business strategy; any statements regarding future economic conditions or performance; any statements of belief; and any statements of assumptions underlying any of the foregoing. Words such as "estimate," "project," "predict," "will," "would," "should," "could," "may," "might," "anticipate," "plan," "intend," "believe," "expect," "aim," "goal," "target," "objective," "commit," "advance," "likely" or similar expressions that convey the prospective nature of events or outcomes are generally indicative of forward-looking statements. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this report unless an earlier date is specified. Unless legally required, Occidental does not undertake any obligation to update, modify or withdraw any forward-looking statements as a result of new information, future events or otherwise.
Actual outcomes or results may differ from anticipated results, sometimes materially. Forward-looking and other statements regarding Occidental's sustainability efforts and aspirations are not an indication that these statements are necessarily material to investors or require disclosure in Occidental's filings with the SEC. In addition, historical, current and forward-looking sustainability-related statements may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve and definitions, assumptions, data sources and estimates or measurements that are subject to change in the future, including through rulemaking or guidance. Factors that could cause results to differ from those projected or assumed in any forward-looking statement include, but are not limited to: general economic conditions, including slowdowns and recessions, domestically or internationally; Occidental's indebtedness and other payment obligations, including the need to generate sufficient cash flows to fund operations; Occidental's ability to successfully monetize select assets and repay or refinance debt and the impact of changes in Occidental's credit ratings or future increases in interest rates; assumptions about energy markets; global and local commodity and commodity-futures pricing fluctuations and volatility; supply and demand considerations for, and the prices of, Occidental's products and services; actions by OPEC and non-OPEC oil producing countries; results from operations and competitive conditions; future impairments of Occidental's proved and unproved oil and gas properties or equity investments, or write-downs of productive assets, causing charges to earnings; unexpected changes in costs; government actions (including the effects of announced or future tariff increases and other geopolitical, trade, tariff, fiscal and regulatory uncertainties), war (including the Russia-Ukraine war and conflicts in the Middle East) and political conditions and events; inflation, its impact on markets and economic activity and related monetary policy actions by governments in response to inflation; availability of capital resources, levels of capital expenditures and contractual obligations; the regulatory approval environment, including Occidental's ability to timely obtain or maintain permits or other government approvals, including those necessary for drilling and/or development projects; Occidental's ability to successfully complete, or any material delay of, field developments, expansion projects, capital expenditures, efficiency projects, acquisitions or divestitures; risks associated with acquisitions, mergers and joint ventures, such as difficulties integrating businesses, uncertainty associated with financial projections or projected synergies, restructuring, increased costs and adverse tax consequences; uncertainties and liabilities associated with acquired and divested properties and businesses; uncertainties about the estimated quantities of oil, NGL and natural gas reserves; lower-than-expected production from development projects or acquisitions; Occidental's ability to realize the anticipated benefits from prior or future streamlining actions to reduce fixed costs, simplify or improve processes and improve Occidental's competitiveness; exploration, drilling and other operational risks; disruptions to, capacity constraints in, or other limitations on the pipeline systems that deliver Occidental's oil and natural gas and other processing and transportation considerations; volatility in the securities, capital or credit markets, including capital market disruptions and instability of financial institutions; health, safety and environmental (HSE) risks, costs and liability under existing or future federal, regional, state, provincial, tribal, local and international HSE laws, regulations and litigation (including related to climate change or remedial actions or assessments); legislative or regulatory changes, including changes relating to hydraulic fracturing or other oil and natural gas operations, retroactive royalty or production tax regimes and deep-water and onshore drilling and permitting regulations; Occidental's ability to recognize intended benefits from its business strategies and initiatives, such as Occidental's low-carbon ventures businesses or announced greenhouse gas emissions reduction targets or net-zero goals; changes in government grant or loan programs; potential liability resulting from pending or future litigation, government investigations and other proceedings; disruption or interruption of production or manufacturing or facility damage due to accidents, chemical releases, labor unrest, weather, power outages, natural disasters, cyber-attacks, terrorist acts or insurgent activity; the scope and duration of global or regional health pandemics or epidemics, and actions taken by government authorities and other third parties in connection therewith; the creditworthiness and performance of Occidental's counterparties, including financial institutions, operating partners and other parties; failure of risk management; Occidental's ability to retain and hire key personnel; supply, transportation and labor constraints; reorganization or restructuring of Occidental's operations; changes in state, federal or international tax rates, deductions, incentives or credits; and actions by third parties that are beyond Occidental's control.
Additional information concerning these and other factors that may cause Occidental's results of operations and financial position to differ from expectations can be found in Occidental's other filings with the SEC, including Occidental's 2024 Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.
CURRENT BUSINESS OUTLOOK
Occidental's financial condition, cash flows and levels of expenditures are highly dependent on oil prices and, to a lesser extent, NGL and natural gas prices, the Midland-to-Gulf-Coast oil spreads, chemical product prices and inflationary pressures in the macro-economic environment. The average WTI price per barrel for the three months ended June 30, 2025 was $63.74, compared to $71.42 for the three months ended March 31, 2025 and $80.56 for the three months ended June 30, 2024.
Changes in oil prices could result in adjustments to capital investment levels and allocation, which impact production volumes. Oil prices may remain volatile due to geopolitical risks, the evolving macro-economic environment's impact on energy demand, future actions by OPEC and other oil producing countries, and recent tariff actions.
In April 2025, President Trump announced a sweeping tariff policy that imposes a 10% baseline tariff on the majority of imports, with significantly higher reciprocal rates for certain nations. While the United States engaged with many countries on trade agreements, the most significant reciprocal rates were paused, some of which have been modified as conversations continue. The implementation of these tariffs could have several implications for Occidental's business operations and financial performance as tariffs may be levied on the Company's suppliers which in turn may increase costs. In addition, OxyChem imports and exports certain products which could be subject to tariffs.
STRATEGIC PRIORITIES
Occidental is focused on delivering a unique shareholder value proposition with its portfolio of oil and gas, chemical and midstream and marketing assets as well as its ongoing development of carbon management and sequestration solutions and GHG emissions reduction efforts. Occidental conducts its operations with a priority on technical expertise, HSE, sustainability and social responsibility. In order to maximize shareholder returns, Occidental will:
■ Maintain production base to preserve asset base integrity and longevity;
■ Deliver a sustainable and growing dividend;
■ Prioritize excess cash flow and proceeds from asset divestitures for deleveraging until principal debt is below $15 billion;
■ Enhance its asset base with investments in its cash-generative oil and gas and chemical businesses; and
■ Advance technologies and decarbonization solutions to develop sustainable low-carbon businesses.
DEBT
As of June 30, 2025, Occidental's 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 sequestration activities; and environmental remediation matters.
In the six months ended June 30, 2025, Occidental used cash on hand and proceeds from asset sales and warrant exercises to repay all of the $1.0 billion senior notes due 2025 and $870 million of senior notes due 2026 and $400 million of the two-year term loan due 2026.
Subsequent to June 30, 2025, but before the date of this filing, Occidental used cash from a combination of sources to repay an additional $700 million of the two-year term loan due 2026, reducing principal debt outstanding to $21.4 billion. For information on Occidental's debt activity, see Note 4 - Long-Term Debtin the Notes to Consolidated Condensed Financial Statements in Part I, Item 1 of this Form 10-Q for additional information.
As of June 30, 2025, approximately 90% of Occidental's outstanding debt was fixed rate.
WARRANT EXERCISE
On March 3, 2025, Occidental announced an offer to exercise its outstanding publicly traded warrants at a temporarily reduced price of $21.30 per share with an expiration date of March 31, 2025. In April 2025, Occidental issued 41.9 million shares of common stock in return for proceeds of approximately $890 million. The proceeds from the warrant exercise were used to repay near-term debt maturities. See Note 4 - Long Term Debtin the Notes to Consolidated Condensed Financial Statements in Part I, Item 1 of this Form 10-Q.
CONSOLIDATED RESULTS OF OPERATIONS AND ITEMS AFFECTING COMPARABILITY
The following table sets forth earnings of each operating segment and corporate items:
millions Three months ended June 30, 2025 % Change Three months ended March 31, 2025
Net income
Oil and gas (a)
$ 934 (45) % $ 1,697
Chemical (a)
213 15 % 185
Midstream and marketing (a)
49 164 % (77)
Total 1,196 (34) % 1,805
Unallocated Corporate Items (a)
Interest expense, net (276) (13) % (318)
Income tax expense (270) (30) % (387)
Corporate and other items, net (182) 17 % (155)
Net income $ 468 (50) % $ 945
Less: Net income attributable to noncontrolling interest (10) 11 % (9)
Less: Preferred stock dividends (170) - % (170)
Net income attributable to common stockholders $ 288 (62) % $ 766
Net income per share attributable to common stockholders - diluted $ 0.26 (66) % $ 0.77
(a) Refer to the Items Affecting Comparability table which sets forth items affecting Occidental's earnings that vary widely and unpredictably in nature, timing and amount.
millions Six months ended June 30, 2025 % Change Six months ended June 30, 2024
Net income
Oil and gas (a)
$ 2,631 (9) % $ 2,877
Chemical (a)
398 (28) % 550
Midstream and marketing (a)
(28) (134) % 83
Total 3,001 (15) % 3,510
Unallocated Corporate Items (a)
Interest expense, net (594) 11 % (536)
Income tax expense (657) (15) % (769)
Corporate and other items, net (337) 2 % (329)
Income from continuing operations $ 1,413 (25) % $ 1,876
Discontinued operations, net of taxes - (100) % 182
Net income $ 1,413 (31) % $ 2,058
Less: Net income attributable to noncontrolling interest (19) 138 % (8)
Less: Preferred stock dividends (340) - % (340)
Net income attributable to common stockholders $ 1,054 (38) % $ 1,710
Net income per share attributable to common stockholders - diluted $ 1.03 (42) % $ 1.78
(a) Refer to the Items Affecting Comparability table which sets forth items affecting Occidental's earnings that vary widely and unpredictably in nature, timing and amount.
ITEMS AFFECTING COMPARABILITY
The following table sets forth items affecting the comparability of Occidental's earnings that vary widely and unpredictably in nature, timing and amount:
Three months ended Six months ended
millions June 30, 2025 March 31, 2025 June 30, 2025 June 30, 2024
Oil and gas
Legal reserves and other $ (65) $ - $ (65) $ (54)
Total oil and gas (65) - (65) (54)
Chemical
Legal reserves and other - (30) (30) (6)
Total chemical - (30) (30) (6)
Midstream and marketing
Asset impairments and other charges (a)
(162) - (162) -
Derivative gains (losses), net (a)
95 (84) 11 (86)
Gains on sales of assets and other, net (a)
- - - 157
TerraLithium fair value gain - - - 27
Total midstream and marketing (67) (84) (151) 98
Corporate
Acquisition-related costs and others (b)
(6) (6) (12) (85)
Total corporate (6) (6) (12) (85)
Income tax impact on items affecting comparability 30 26 56 (2)
Income tax impact on Algeria contract renewal - - - (20)
Loss (108) (94) (202) (69)
Discontinued operations, net of taxes - - - 182
Total $ (108) $ (94) $ (202) $ 113
(a) Included amounts from income from equity investments and other in the Consolidated Condensed Statement of Operations.
(b) The six months ended June 30, 2024 included $59 million of financing costs related to the CrownRock Acquisition. The remaining amounts for each period are related to CrownRock transaction costs.
Q2 2025 compared to Q1 2025
Excluding the impact of items affecting comparability, net income for the three months ended June 30, 2025, compared to the three months ended March 31, 2025, decreased due to lower commodity prices across all products in the oil and gas segment, partially offset by higher crude oil sales volumes and lower lease operating expense in the oil and gas segment and higher gas margins from transportation capacity optimization in the Permian Basin in the midstream and marketing segment.
YTD 2025 compared to YTD 2024
Excluding the impact of items affecting comparability, net income for the six months ended June 30, 2025, compared to the same period in 2024, decreased primarily due to lower crude oil prices in the oil and gas segment, higher ethylene and energy costs in the chemical segment, and higher interest expense related to the issuance of debt for the CrownRock Acquisition, partially offset by higher sales volumes in the oil and gas segment due to a full six months of production from CrownRock assets in 2025.
SELECTED STATEMENTS OF OPERATIONS ITEMS
Q2 2025 compared to Q1 2025
Net sales of $6.4 billion decreased for the three months ended June 30, 2025, compared to $6.8 billion for the three months ended March 31, 2025, primarily due to lower commodity prices partially offset by higher crude oil and NGL sales volumes in the oil and gas segment.
YTD 2025 compared to YTD 2024
Net sales of $13.2 billion increased for the six months ended June 30, 2025, compared to $12.8 billion for the same period in 2024, primarily due to higher oil volumes due to a full six months of production from the CrownRock assets and higher domestic natural gas and NGL prices, partially offset by lower oil prices in the oil and gas segment.
Depreciation, depletion and amortization of $3.9 billion increased for the six months ended June 30, 2025, compared to $3.5 billion for the same period in 2024, primarily due to a full six months of production from the CrownRock assets.
Income from equity investments and other of $163 million decreased for the six months ended June 30, 2025, compared to $543 million for the same period in 2024, primarily due to Occidental's share of losses recognized by its investee, Net Power.
SEGMENT RESULTS OF OPERATIONS
SEGMENT RESULTS OF OPERATIONS
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 and condensate, NGL and natural gas. The chemical segment is operated by our subsidiary OxyChem, which mainly 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, CO2and 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 Occidental's low-carbon ventures businesses. Occidental's low-carbon ventures businesses seek to leverage Occidental's legacy of carbon management experience to develop carbon capture, utilization and sequestration projects, including the commercialization of direct air capture technology, invest in other low-carbon technologies intended to reduce greenhouse gas emissions from Occidental's operations and strategically partner with other industries to help reduce their emissions.
OIL AND GAS SEGMENT
The following table sets forth the average sales volumes per day for oil and NGL in Mbbl and for natural gas in MMcf:
Three months ended Six months ended
June 30, 2025 March 31, 2025 June 30, 2025 June 30, 2024
Sales Volumes per Day
Oil (Mbbl)
United States 604 601 603 520
International 110 104 107 106
NGL (Mbbl)
United States 279 273 276 246
International 37 39 38 38
Natural Gas (MMcf)
United States 1,701 1,756 1,728 1,326
International 500 488 493 519
Total Sales Volumes (Mboe) (a)
1,397 1,391 1,394 1,218
(a) Natural gas volumes have been converted to Boe based on energy content of six Mcf of gas to one barrel of oil. Conversion to Boe does not necessarily result in price equivalency.
The following table presents information about Occidental's average realized prices and index prices:
Three months ended Six months ended
June 30, 2025 March 31, 2025 June 30, 2025 June 30, 2024
Average Realized Prices
Oil ($/Bbl)
United States $ 62.83 $ 70.80 $ 66.78 $ 77.80
International $ 68.88 $ 72.59 $ 70.67 $ 79.32
Total Worldwide $ 63.76 $ 71.07 $ 67.37 $ 78.06
NGL ($/Bbl)
United States $ 20.05 $ 25.67 $ 22.81 $ 20.67
International $ 25.72 $ 27.85 $ 26.80 $ 28.22
Total Worldwide $ 20.71 $ 25.94 $ 23.29 $ 21.68
Natural Gas ($/Mcf)
United States $ 1.33 $ 2.42 $ 1.88 $ 1.06
International $ 1.90 $ 1.90 $ 1.90 $ 1.89
Total Worldwide $ 1.46 $ 2.30 $ 1.88 $ 1.29
Average Index Prices
WTI oil ($/Bbl) $ 63.74 $ 71.42 $ 67.58 $ 78.76
Brent oil ($/Bbl) $ 66.59 $ 74.89 $ 70.74 $ 83.39
NYMEX gas ($/Mcf) $ 3.68 $ 3.62 $ 3.65 $ 2.17
Average Realized Prices as Percentage of Average Index Prices
Worldwide oil as a percentage of average WTI 100 % 100 % 100 % 99 %
Worldwide oil as a percentage of average Brent 96 % 95 % 95 % 94 %
Worldwide NGL as a percentage of average WTI 32 % 36 % 34 % 28 %
Domestic natural gas as a percentage of average NYMEX 36 % 67 % 52 % 49 %
Q2 2025 compared to Q1 2025
Oil and gas segment earnings were $0.9 billion for the three months ended June 30, 2025, compared with segment earnings of $1.7 billion for the three months ended March 31, 2025. Excluding the impact of items affecting comparability, oil and gas segment earnings decreased due to lower commodity prices across all products, partially offset by higher crude oil sales volumes and lower lease operating expense.
YTD 2025 compared to YTD 2024
Oil and gas segment earnings were $2.6 billion for the six months ended June 30, 2025, compared to $2.9 billion for the six months ended June 30, 2024. Excluding the impact of items affecting comparability, oil and gas segment earnings decreased primarily due to lower crude oil prices, partially offset by higher sales volumes due to a full six months of production from CrownRock assets in 2025.
Average daily sales volumes increased for the six months ended June 30, 2025, compared to the same period in 2024, mainly due to the CrownRock Acquisition.
The following table presents an analysis of the impacts of changes in average realized prices and sales volumes with regard to Occidental's domestic and international oil and gas revenue:
Increase (Decrease) Related to
millions
Three months ended March 31, 2025 (b)
Price Realizations Net Sales Volumes
Three months ended June 30, 2025 (b)
United States Revenue
Oil $ 3,830 $ (439) $ 65 $ 3,456
NGL 578 (140) 19 457
Natural gas 381 (161) (15) 205
Total $ 4,789 $ (740) $ 69 $ 4,118
International Revenue
Oil (a)
$ 675 $ (32) $ 47 $ 690
NGL 96 (6) (4) 86
Natural gas 84 1 3 88
Total $ 855 $ (37) $ 46 $ 864
Increase (Decrease) Related to
millions
Six months ended June 30, 2024 (b)
Price Realizations Net Sales Volumes
Six months ended June 30, 2025 (b)
United States Revenue
Oil $ 7,360 $ (1,227) $ 1,153 $ 7,286
NGL 819 147 69 1,035
Natural gas 254 286 46 586
Total $ 8,433 $ (794) $ 1,268 $ 8,907
International Revenue
Oil (a)
$ 1,533 $ (142) $ (26) $ 1,365
NGL 196 (9) (5) 182
Natural gas 178 1 (7) 172
Total $ 1,907 $ (150) $ (38) $ 1,719
(a) Includes the impact of international production sharing contracts.
(b) Excludes "other" oil and gas revenue. See Note 2 - Revenuein the Notes to Consolidated Condensed Financial Statements in Part I, Item 1 of this Form 10-Q for additional information regarding other revenue.
CHEMICAL SEGMENT
Q2 2025 compared to Q1 2025
Chemical segment earnings for the three months ended June 30, 2025 were $213 million, compared to $185 million for the three months ended March 31, 2025. Excluding items affecting comparability, chemical segment earnings were relatively unchanged and reflected negative inventory adjustments, offset by improved export demand for caustic soda and PVC.
YTD 2025 compared to YTD 2024
Chemical segment earnings for the six months ended June 30, 2025 were $398 million, compared to $550 million for the six months ended June 30, 2024. Excluding items affecting comparability, the decrease was primarily due to lower PVC margins from lower pricing and higher ethylene costs.
MIDSTREAM AND MARKETING SEGMENT
Q2 2025 compared to Q1 2025
Midstream and marketing segment earnings for the three months ended June 30, 2025 were $49 million, compared to segment losses of $77 million for the three months ended March 31, 2025. Excluding the impact of items affecting comparability, midstream and marketing second quarter results increased due to higher gas margins from transportation capacity optimization in the Permian Basin and higher sulfur prices at Al Hosn.
YTD 2025 compared to YTD 2024
Midstream and marketing segment losses for the six months ended June 30, 2025 were $28 million, compared to segment earnings of $83 million for the six months ended June 30, 2024. Excluding the impact of items affecting comparability, midstream and marketing results increased due to higher gas margins from transportation capacity optimization in the Permian Basin and higher sulfur prices at Al Hosn, partially offset by losses from equity method investees and higher expenses due to the increase in activities in the low-carbon ventures businesses.
INCOME TAXES
Thefollowing table sets forth the calculation of the worldwide effective tax rate for income:
Three months ended Six months ended
millions, except percentages June 30, 2025 March 31, 2025 June 30, 2025 June 30, 2024
Income before income taxes $ 738 $ 1,332 $ 2,070 $ 2,645
Income tax expense
Domestic - federal and state (65) (237) (302) (446)
International (205) (150) (355) (323)
Total income tax expense (270) (387) (657) (769)
Income from continuing operations $ 468 $ 945 $ 1,413 $ 1,876
Worldwide effective tax rate 37 % 29 % 32 % 29 %
Occidental estimates its annual effective income tax rate in recording its quarterly provision for income taxes in the various jurisdictions in which Occidental operates, adjusted for certain discrete items. Each quarter, Occidental updates these rates and records a cumulative adjustment to its income taxes by applying the rates to the pre-tax income excluding certain discrete items. Occidental's quarterly estimate of its effective tax rates can vary significantly based on various forecasted items, including future commodity prices, capital expenditures, expenses for which tax benefits are not recognized and the geographic mix of pre-tax income and losses.
The worldwide effective tax rates for the periods presented in the table above are primarily driven by Occidental's jurisdictional mix of income. U.S. income is taxed at a U.S. federal statutory rate of 21%, while international income is subject to tax at statutory rates as high as 55%.
RECENT TAX LEGISLATION
For more information on the potential impacts to Occidental related to the OBBB, IRA, and Pillar Two initiative, see Note 7 - Income Taxesin the Notes to Consolidated Condensed Financial Statements in Part I, Item 1 of this Form 10-Q for additional information.
LIQUIDITY AND CAPITAL RESOURCES
SOURCES AND USES OF CASH
As of June 30, 2025, Occidental's sources of liquidity included $2.3 billionof cash and cash equivalents, $4.15 billion of borrowing capacity under its RCF, and $600 million of available borrowing capacity on its receivables securitization facility. The RCF and receivables securitization facility mature on June 30, 2028 and July 31, 2027, respectively. There were no borrowings outstanding on Occidental's RCF or receivables securitization facility as of June 30, 2025.
Operating Cash Flows
Operating cash flow from continuing operations was $5.1 billion for the six months ended June 30, 2025, compared to $4.4 billion for the six months ended June 30, 2024. The increase in operating cash flow from continuing operations, compared to the same period in 2024, was primarily due to higher sales volumes, including volumes from the CrownRock Acquisition in the oil and gas segment and lower use of working capital in the midstream and marketing segment due to timing of crude oil shipments, offset primarily by lower commodity prices in the oil and gas segment and higher use of working capital due to timing of federal tax payments and other current payables.
Investing Cash Flows
Occidental's net cash used by investing activities was $2.7 billion for the six months ended June 30, 2025, compared to $3.7 billion for the six months ended June 30, 2024. Investing activities included $1.5 billion in divestitures of non-core oil and gas assets. See Note 5 - Acquisitions and Divestituresin the Notes to Consolidated Condensed Financial Statements in Part I, Item 1 of this Form 10-Q for additional information.
Capital expenditures, of which the majority were for the oil and gas segment, were $3.9 billion for the six months ended June 30, 2025, compared to $3.6 billion for the six months ended June 30, 2024.
Financing Cash Flows
Occidental's net cash used by financing activities was $2.2 billion for the six months ended June 30, 2025, which included payments of long-term debt of $2.3 billion and payments of common and preferred dividends of approximately $800 million, partially offset by cash received of approximately $890 million related to warrant exercises. See Note 4 - Long-Term Debtin the Notes to Consolidated Condensed Financial Statements in Part I, Item 1 of this Form 10-Q.
Cash used in financing activities for the six months ended June 30, 2024 was $300 million, which was primarily related to payment of common and preferred dividends of $700 million, partially offset by cash received of $487 million related to warrant exercises.
Occidental's 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 require a payment of approximately $381 million at such date. Occidental currently has the ability to meet this obligation and may use available capacity under the RCF and other committed facilities to satisfy the put should it be exercised.
As of the date of this filing, Occidental was in compliance with all covenants in its financing agreements. As of the date of this filing, Occidental has no remaining debt maturities due in 2025, $2.2 billion in 2026, $1.5 billion in 2027 and $17.7 billion thereafter. Occidental currently expects its cash on hand, operating cash flows and funds available from the RCF and other committed facilities to be sufficient to meet its near-term debt maturities, operating expenditures, capital expenditures and other obligations for the next 12 months from the date of this filing.
Occidental or its subsidiaries have provided financial assurances through a combination of cash, letters of credit and surety bonds. As of June 30, 2025, Occidental had not issued any letters of credit under the RCF or other committed facilities. For additional information, see Risk Factors in Part I, Item 1A of Occidental's 2024 Form 10-K.
ENVIRONMENTAL LIABILITIES AND EXPENDITURES
Occidental's operations are subject to stringent federal, regional, state, provincial, tribal, local and international laws and regulations related to improving or maintaining environmental quality. Occidental's environmental compliance costs have generally increased over time and are expected to rise in the future. Occidental factors environmental expenditures for its operations as an integral part of its business planning process.
The laws that require or address environmental remediation, including CERCLA and similar federal, regional, state, provincial, tribal, 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, in addition to 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.
See Note 8 - Environmental Liabilities and Expendituresin the Notes to Consolidated Condensed Financial Statements in Part I, Item 1 of this Form 10-Q and the Environmental Liabilities and Expenditures section of Management's Discussion and Analysis of Financial Condition and Results of Operations in the 2024 Form 10-K for additional information regarding Occidental's environmental liabilities and expenditures.
LAWSUITS, CLAIMS, COMMITMENTS AND CONTINGENCIES
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. Occidental has disclosed its reserve balances for environmental remediation matters and its estimated range of reasonably possible additional losses for such matters. See Note 8 - Environmental Liabilities and Expendituresand Note 9 - Lawsuits, Claims, Commitments and Contingenciesin the Notes to Consolidated Condensed Financial Statements in Part I, Item 1 of this Form 10-Q for further information.
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