Thank you, Jason. Good afternoon, everyone, and thank you for participating in Occidental's Second Quarter 2022 Conference Call. On the call with us today are Vicki Hollub, President and Chief Executive Officer; Rob Peterson, Senior Vice President and Chief Financial Officer; and Richard Jackson, President, Operations, U.S. Onshore Resources and Carbon Management. This afternoon, we will refer to slides available on the Investors section of our website. The presentation includes a cautionary statement on Slide 2 regarding forward-looking statements that will be made on the call this afternoon. I'll now turn the call over to Vicki. Vicki, please go ahead.

Thank you, Jeff, and good morning or good afternoon, everyone. We achieved a significant milestone in the second quarter as we completed our near-term debt reduction goal and activated our share repurchase program. At the beginning of this year, we established a near-term goal of repaying an additional $5 billion of debt, before further increasing the amount of cash allocated to shareholder returns. The debt we completed in May brought the total debt repaid this year to over $8 billion, surpassing our target at a quicker pace than we had originally anticipated. With our near-term debt reduction goal accomplished, we initiated our $3 billion share repurchase program in the second quarter and have already repurchased more than $1.1 billion of shares. The additional allocation of cash to shareholders marks a meaningful progression of our cash flow priorities as we have primarily allocated free cash flow to debt reduction over the last few years. Our efforts to improve the balance sheet remain ongoing, but our deleveraging process has reached a stage where our focus is expanding to go to additional cash flow priorities. This afternoon, I'll cover the next phase of our shareholder return framework and second quarter operational performance. Rob will cover our financial results as well as our updated guidance, which includes an increase in our full year guidance for OxyChem. Starting with our shareholder return framework. Our ability to consistently deliver outstanding operational results, combined with our focus to improve our balance sheet, have positioned us to increase the amount of capital returned to shareholders. Considering current commodity prices expectations, we expect to repurchase a total of $3 billion of shares and reduce gross debt to the high teens by the end of this year. Once we have completed the $3 billion share repurchase program and reduced our debt to the high teens, we intend to continue returning capital to shareholders in 2023 through a common dividend that is sustainable at $40 WTI as well as through an active share repurchase program. The progress we are making in lowering interest payments through debt reduction, combined with managing the number of shares outstanding, will enhance the sustainability of our dividend and position us to increase our common dividend at the appropriate time. While we expect future dividend increases to be gradual and meaningful, we do not anticipate the dividend returning to its prior peak. Given our focus on returning capital to shareholders, it is possible that we may reach a point next year to return over $4 per share to common shareholders over a trailing 12-month period. Reaching and maintaining returns to common shareholders above this threshold will require us to begin redeeming their preferred equity concurrently with returning additional cash to common shareholders. I want to be clear about 2 things. First, reaching the $4 per share threshold is the potential outcome of our shareholder return framework, not a specific target. Second, if we begin redeeming the preferred equity, this does not mean there is a cap on returns to common shareholders as cash would continue to be returned to common shareholders above $4 per share. In the second quarter, we generated $4.2 billion of free cash flow before working capital, our highest quarterly free cash flow to date. Our business has all performed well, and we delivered production from continuing operations of approximately 1.1 million BOE per day, in line with the midpoint of our guidance and with total company-wide spending of capital of $972 million. OxyChem reported record earnings for the fourth consecutive quarter with EBIT of $800 million, as the business continued to benefit from robust pricing and demand in the caustic, chlorine, and PVC markets. Last quarter, we highlighted the Responsible Care and Facility Safety Awards that OxyChem received from the American Chemistry Council. OxyChem's accomplishments continue to be acknowledged. In May, the U.S. Department of Energy honored OxyChem as a Better Practice Award winner, which recognizes companies for innovative and industry-leading accomplishments in energy management. OxyChem received the recognition for incorporating an engineering, training, and development program that led to process changes, resulting in energy savings that reduced CO2 emissions by 7,000 metric tons annually. It's achievements like this that make me so proud to announce the modernization and expansion of one of OxyChem's key plants, which we'll detail in just a minute. Turning to oil and gas. I'd like to congratulate the Gulf of Mexico team in celebrating first oil from the new discovery field, Horn Mountain West. The new field was successfully tied back to the Horn Mountain spar using a 3.5-mile dual flow line. The project came in on budget and more than 3 months ahead of schedule. The Horn Mountain West tieback is expected to eventually add approximately 30,000 barrels of oil production per day and is an excellent example of our ability to leverage our assets and technical expertise to bring new production online in a capital-efficient manner. I'd also like to congratulate our Al Hosn and Oman teams. Al Hosn achieved a recent production record following the first full plant shutdown as a part of a planned turnaround in the first quarter. Oxy's Oman team celebrated a record high daily production at Oman North Block 9, which has been operated by Oxy since 1984. Even after almost 40 years, Block 9 is still breaking records with strong base production and new development ledge performance, supported by a successful exploration program. We have also been active in capturing opportunities to leverage our deep inventory of U.S. onshore assets. When we announced our Midland Basin JV with EcoPetrol in 2019, I mentioned how excited we were to be working with one of our strongest and longest-standing strategic partners. The JV has worked exceptionally well for both partners, with Oxy benefiting from incremental production and cash flow from the Midland Basin with minimal investment. We are fortunate to collaborate with a partner who has extensive expertise and with whom we share a long-term vision. This is why I'm equally excited this morning to announce that Oxy and EcoPetrol have agreed to enhance our JV in the Midland Basin and expand our partnership to cover approximately 20,000 net acres in the Delaware Basin. This includes 17,000 acres in the Texas Delaware that we'll utilize with infrastructure. And in the Midland Basin, Oxy will benefit from the opportunity to continue development with an extension to the capital carry through the end of this agreement in the first quarter of 2025. In the Delaware Basin, we have the opportunity to bring forward the development of high-quality acreage that was further out in our development plans, while benefiting from an additional capital carry of up to 75%. In exchange for the carried capital, EcoPetrol will earn a percentage of the working interest in the JV asset. Last month, we reached an agreement with Sonatrach in Algeria to enter into a new 25-year production-sharing agreement that will roll Oxy's existing licenses into a single agreement. The new production-sharing agreement renews and deepens our partnership with Sonatrach, while providing Oxy with the opportunity to add reserves and continue developing a low-decline cash-generating asset with long-standing partners. Even with 2022 expected to be a record year for OxyChem, we see a unique opportunity to expand OxyChem's future earnings and cash flow generating capabilities by investing in high-return projects. On our fourth quarter call, we mentioned the FEED study to explore the modernization of certain Gulf Coast chlor-alkali assets and diaphragm to membrane technology. I'm pleased to announce our Battleground plant, which is adjacent to Houston Ship Channel in Deer Park, Texas as one of the sites that we will modernize. Battleground is Oxy's largest chlorine and caustic soda production facility with ready access to both domestic and international markets. The project is being undertaken in part to respond to customer demand for chlorine, chlorine derivatives, and certain grades of caustic soda that we can produce with newer technology. It will also result in increased capacities for both products. The project is expected to increase cash flow through improved margins and higher product volumes, while lowering the energy intensity of the products produced. The modernization and expansion project will commence in 2023, with a capital investment of up to $1.1 billion, spread over 3 years. During construction, existing operations are expected to continue as normal, with the improvements expected to be realized in 2026. The expansion is not a prospective build as we have structurally advanced contracts and internal derivative production to consume the incremental chlorine volume, while caustic volumes will be contracted by the time the new capacity comes online. The Battleground project represents the first sizable investment we've made in OxyChem since the construction and completion of the 4CPe plant, an ethylene cracker that we completed in 2017. This high-return project is just one of several opportunities we have to grow OxyChem's cash flow over the next few years. We are conducting similar FEED studies for additional chlor-alkali assets and plan to communicate the results when complete. I'll now turn the call over to Rob, who will walk you through our second quarter results and guidance.

Thank you, Vicki, and good afternoon. In the second quarter, our profitability remained strong, and we generated a record level of free cash flow. We announced an adjusted profit of $3.16 per diluted share and a reported profit of $3.47 per diluted share, with the difference between the 2 numbers primarily driven by gains in early debt extinguishment and positive mark-to-market adjustments. We were pleased to be able to allocate cash to share repurchases in the second quarter. To date, we have purchased over 18 million shares as of Monday, August 1, for approximately $1.1 billion for a weighted average price below $60 per share. Also, during the quarter, approximately 3.1 million publicly traded warrants were exercised, bringing the total number exercised to almost 4.4 million with 111.5 million remaining outstanding. As we said, when the warrants were issued in 2020, the cash proceeds received will be applied toward share repurchases to mitigate potential dilution to common shareholders. As Vicki mentioned, we are excited to enhance and expand our relationship with EcoPetrol in the Permian Basin. JV amendment closed in the second quarter with an effective date of January 1, 2022. To maximize this opportunity, we intended to add an additional rig late in the year to support the JV development activity in the Delaware Basin. The additional activity is not expected to add any production until 2023, as the first Delaware JV wells will not come online until next year. Similarly, the JV amendment is not expected to have any meaningful impact on our capital budget this year. We expect the Delaware JV and the enhanced Midland JV to allow us to maintain or even lower industry-leading capital intensity in the Permian in 2023 onwards. We will provide further details when we provide 2023 production guidance. Given that January 1, '22 effective date and related working interest transferred to our JV partner in the Midland Basin, we have adjusted our full year Permian production guidance down slightly. Separately, we are reallocating a portion of the capital we earmarked for the OBO spending this year to our operated Permian assets. Reallocating capital operating activity will provide more certainty in our West delivery for the second half of 2022 and the start of 2023, while also delivering superior returns given our inventory quality and cost control. While the timing of this change has a slight impact on our 2022 production due to activity relocation in the second half of the year, the benefit of developing resources that we operate is expected to result in even stronger financial performance going forward. The updated activity slide in the earnings presentation appendix reflects this change. The shift in OBO capital, combined with the JV working interest transfer as well as various short-term operability matters all contributed to slightly lowering our full year Permian production guidance. The operability impacts are primarily related to third-party issues, such as downstream gas processing interruptions on our EOR assets and other unplanned disruptions at third parties. For 2022, company-wide full year production guidance remains unchanged, as the Permian adjustment is fully offset by high production in the Rockies and the Gulf of Mexico. Finally, we note that our Permian production delivery remains very strong, with a growth of approximately 100,000 BOE per day when comparing the fourth quarter of 2021 through our implied production guidance for the fourth quarter of 2022. We expect production in the second half of 2022 to average approximately 1.2 million BOE per day, which is notably higher than the first half of the year. Higher production in the second half of the year has always been an expected outcome of our 2022 plan, in part due to ramp-up activities and scheduled turnarounds in the first quarter. Company-wide third quarter production guidance includes continued growth in the Permian, but considers the potential for tropical weather impacts in the Gulf of Mexico, combined with third-party downtime and production decline in Rockies given our lower activity set as a result of relocating a rig to the Permian. Our full year capital budget remains unchanged. But as I mentioned in our previous call, we expect capital spending to come in near the high end of our range of $3.9 billion to $4.3 billion. Certain areas that we operate in, especially the Permian, continue to experience higher inflationary pressures than others. To support activity into 2023 and address the regional impact of inflation, we are reallocating $200 million of capital to the Permian. We believe our company-wide capital budget is sized appropriately to execute our 2022 plan, as the additional capital for the Permian will be reallocated from other assets that have been able to generate higher-than-expected capital savings. We are raising our full year domestic operating expense guidance to $8.50 per BOE, which accounts for higher-than-expected labor and energy costs, primarily in the Permian, as well as continued upward pricing pressure on our WTI index CO2 purchase contracts in the EOR business. OxyChem continues to perform well, and we have raised our full year guidance to reflect the exceptional second quarter performance as well as a slightly better than previously expected second half of the year. We still see the potential for market conditions to dampen from where we are today due to inflationary pressures, though the long-term fundamentals continue to remain supportive, and we expect third and fourth quarters to be strong by historical standards. Turning back to financial items. In September, we intend to settle $275 million of notional interest rate swaps. The net liability or cash outflow required to sell these swaps will be around $100 million of the current interest rate curve. Last quarter, I mentioned that as WTI averages $90 per barrel in 2022, we would expect to pay approximately $600 million in U.S. federal cash taxes. Oil prices continue to remain strong, increasing the possibility that WTI may average even higher price for the year. If WTI averages $100 in 2022, we would expect to pay approximately $1.2 billion in U.S. federal cash taxes. As Vicki mentioned, year-to-date, we repaid approximately $8.1 billion of debt, including $4.8 billion in the second quarter, exceeding our near-term goals of paying $5 billion in principal this year. We have also made meaningful progress towards our medium-term goal of reducing gross debt to the high teens. We began repurchasing shares in the second quarter, further advancing our shareholder return framework as part of our commitment to return more cash to shareholders. We intend to continue allocating free cash flow towards the share repurchases until we complete our current $3 billion program. During this period, we will continue to view debt retirement opportunistically and we'll likely retire debt concurrently with share repurchases. Once our initial share repurchase program is complete, we intend to allocate free cash flow towards reducing the face value of debt to the high teens, which we believe will accelerate our return to investment grade. When we reach this stage, we intend to reduce the impetus of our allocation of free cash flow from primarily reducing debt by including initial items in our cash flow priorities. We continue to make incremental progress towards achieving our goal of returning to investment grade. Since our last earnings call, Fitch has signed a positive outlook to our credit ratings. All 3 of the major credit rating agencies rate our debt as 1 notch below investment grade, with Moody's and Fitch having assigned positive outlooks. Over time, we intend to maintain mid cycle leverage at approximately 1x debt-to-EBITDA or below $15 billion. We believe this level of leverage will be appropriate for our capital structure as we will enhance our equity returns while strengthening our ability to return capital to shareholders throughout the commodity cycle.

We're now prepared to take your calls.

The first question comes from John Royall from JPMorgan.

So can you talk about the various moving pieces in the CapEx guidance? I know that you raised the Permian number, but kept the total the same. So what are the areas that were the source of funds for that raise? And then any early look into some of the moving pieces for next year with this new FID for Chems and then the change in structure with EcoPetrol? Just anything you can give us on kind of the puts and takes going into next year would be helpful.

I'll let Richard cover the changes in the CapEx, and then I'll follow up with the additional part of that question.

John, this is Richard. We have several factors to consider as we assess the U.S. onshore situation. Throughout the year, a few developments took place. Initially, we had a planned production increase, but early on, the delivery slowed down. Consequently, we decided to reallocate some capital toward our operated assets, which allowed us to secure that production increase while also providing resources for the latter half of the year, ensuring continuity during that period. We are pleased with this decision. As Rob noted, these are profitable projects that yield positive returns. Additionally, securing resources early in the year, such as rigs and frac crews, has helped us manage inflation and enhance performance as we prepare for the second half of the year. The second aspect is the reallocation from Oxy, with some of it stemming from low carbon ventures, which we can discuss further if needed. As we move into the second half of the year, we aim to achieve about the midpoint for low carbon ventures, thanks to increased certainty surrounding the development of direct air capture and work on our CCUS hubs. This, along with various savings within Oxy, greatly contributed to our overall balance. Regarding the additional $200 million, I would say 50% of it is related to increased activities. We initially loaded our plan for the year at the front end, which enables us to sustain capital and maintain continuity, particularly with drilling rigs, giving us flexibility as we enter 2023. Moreover, we are observing inflationary pressures, and while we've managed to mitigate a significant portion of that, we anticipate an additional 7% to 10% outlook for the year compared to our initial plan. We've successfully offset an extra 4% of that through operational savings, so we are pleased with this progress. However, we are starting to see some inflationary pressures arise.

I would say, on capital for 2023, it's still way too early for us to determine what that would be. But the EcoPetrol JV would fit into the resources allocation, and we'll compete with the capital within that program.

Okay. Great. And then switching over to chemicals. If you guys could just talk a little bit about the fundamentals in that business. Coming off a very strong 2Q, but a big step down in guidance for the second half. So if you could just give some color on the source of the strength in 2Q and what you see changing in the second half?

Sure, John. I would say that the conditions in both the vinyls and caustic soda businesses primarily influence our overall performance. In Chemicals, these conditions were quite favorable in the second quarter. When both businesses are doing well, it significantly impacts our earnings, leading to the record performance we achieved in Q2. Looking into the third quarter, the tight constraints we've faced in the Vinyls business are becoming more manageable due to improved supply and some softening in the domestic market, while the conditions for the caustic soda business remain very strong and continue to improve. However, the macroeconomic landscape, highlighted by interest rates, housing starts, and GDP performance, suggests a somewhat unfavorable trend, which indicates a softer second half compared to the first half. Additionally, we are entering a highly uncertain period due to unpredictable weather patterns, particularly as we approach the peak of hurricane season, which could affect supply and demand in either direction. Another factor impacting our business is the Chinese shutdowns related to COVID, which are creating a backlog in their demand for chemicals and influencing exports from the U.S. This is adding a softening effect. Nonetheless, these factors can change relatively quickly. Due to the macroeconomic trends and the typical seasonal decline we see in Q4, we are forecasting a softer second half of the year compared to the first half, but even with this projection, our performance is historically strong. The third quarter guidance, as it stands, would have been considered a solid year for the Chemicals business in many prior years. In terms of PVC, we're still witnessing year-over-year growth, with domestic demand up nearly 6% through June. Overall PVC demand, including U.S. exports, is up about 4.5%. The chlorine sector is also experiencing growth of 3% to 4% this year. All market sectors remain robust, and there’s considerable pent-up demand following the last two years. However, we must consider how factors like interest rates, inflation, and disposable income could impact sectors like durable goods. This makes forecasting challenging as we attempt to assess the potential depth of a recession and its effect on demand. Overall, while business conditions remain favorable, they are not as strong as they were in the second quarter.

The next question is from Raphaël DuBois from Societe Generale.

The first one is related to Algeria. Now that you have signed this 25-year contract extension, I was wondering if you could maybe give us some better color on what is the production potential for Algeria and whether there is a change in the mix between liquids and gas that we should be expecting?

Currently, under the agreement we signed, we will be producing oil along with associated gas, primarily from the fields we have already been developing and are now expanding. From our current production outlook, it looks like next year will be somewhat lower than this year due to the structure of the contract, but our cash flow is expected to remain about the same. We believe there is significant potential in our existing fields to continue their development. The remaining reserves we expect to add from the contract extension will be around 100 million barrels. Additionally, there is considerable potential for further evaluation, and we are incorporating a 3D seismic survey to enhance our recoveries from conventional sales, which currently have relatively low decline rates and are supported by gas injection and potentially CO2 injection in the future. Although gas is not part of our current development in that area, it could become viable if we find it competitive with our other internal projects.

Great. And my follow-on question would be about chemicals. This Battleground CapEx project that you have announced, you said earlier that you would have more plans that you will consider for modernization. When could we hear about the next one to be modernized? And could you maybe remind us of the capacity of Battleground so that we can have a feel for the CapEx intensity of such project and what we could be expecting going forward for other projects.

Sure, Raphael. So we have talked about potential conversions beyond the Battleground project. So at this point, we've made the decision to move forward with the Battleground conversion. As indicated in the remarks, we will continue to operate the facility throughout the construction process. There may be some short periods where we'd take very short outages for important connections between existing infrastructure in the facility. We're confident, throughout that process, we can build inventory and continue to build product with no impact on our customers. And so as you think about the Battleground process, you should not assume any loss of sales or margin during the actual project itself. So when you look at the other facilities, once we convert the Battleground facility, we already have membrane technology and polyramics, which is a non-asbestos type diaphragm technology, at our Wichita and Geismar facilities. And we're in the process right now of making a conversion change at our Wichita facility to polyramics. So the announced project, that will not only convert Battleground but increase its capacity by 8%, we'll only leave our Convent Ingleside facilities utilizing asbestos diaphragms. And we'll begin the conversion studies on those as we get further underway with the actual Battleground conversion. We'll do them sort of in series together. We won't wait for one to be completed to make a decision on the other, but we'll sort of stagger them together. But obviously, what we're going to do with those facilities isn't as pertinent as to moving forward the Battleground project right now. And so from a capital intensity standpoint, we don't provide individual capacities of our facilities. But what I would say though is that the cost of $1.1 billion that we've included in the slide deck, I would not use that as a proxy necessarily for the other 2 facilities. The facilities are all individually unique, not only from different sizes and capacities in the facilities, but they all have different equipment associated inside and outside, battery limits. They have different conversions that will go along with them. In addition to that, at this stage, as we mentioned, the Battleground facility expansion is determined also with existing contractual obligations we've secured for the chlorine side of the business, the derivative side of the business moving into the project. We're not expanding the project, hoping to get additional demand for those molecules that are already sold in the future. At this time, we don't have needs to expand either our Convent facility or Ingleside facility. So at this stage, if we were to proceed with an FID decision on one of those, it would simply be a conversion of process change. And so it would be difficult to take that and certainly wouldn't multiply that number times 3 and come up with a number for those other 2 projects to be included in that. And so as we get further along with the Battleground project, we'll start sharing ideas on subsequent changes in the future. But this time, the only decision we made is to actually move forward with Battleground.

Raphael, this is Jeff. I'd add one thing to what Rob said. The EBITDA number we've provided would be, the way I'd look at that is more of a mid-cycle EBITDA, not at current pricing or current marketing conditions.

The next question comes from Devin McDermott from Morgan Stanley.

So I wanted to ask on low carbon ventures. One of the moving pieces in the cap guidance this year was LCV spend coming in toward the midpoint. I was wondering if you could just talk a little bit more broadly about the progress you've been making towards some of the milestones that you set forth earlier this year. And as part of that, the Inflation Reduction Act that's recently been introduced has some supportive language in there for carbon capture and also direct air capture. So can you talk about if that were to move forward, how that might impact the cadence of investment over the next few years?

Devin, I'll begin and then let Richard take over. Regarding the Inflation Reduction Act, I want to highlight some of its contents. It covers a wide range of topics including alternative fuels, renewable energy, electric vehicles, hydrogen, methane emission reduction, and carbon capture use and sequestration. Some aspects affecting us include increased federal land oil and gas royalty rates, higher minimum bid rates for leases, modestly increased annual rental rates, and raised bond requirements, as well as increases in offshore royalty rates. On the positive side, the act mandates oil and gas lease sales prior to granting rights of way for wind and solar projects. It stipulates royalties on oil and gas production regardless of its use unless it's for safety reasons or benefits the lease. A noteworthy element of the act is the reinstatement of Lease Sale 257 in the Gulf of Mexico, where we secured some significant leases, which is crucial for our company. Additionally, it calls for the resumption of scheduled lease sales for the Gulf of Mexico that were planned from 2017 to 2022. Concerning carbon capture, which is particularly significant for us, there are many enhancements to the 45Q tax credit. Considering the benefits for us in the Gulf of Mexico alongside the methane emission and reduction requirements, which align with our existing practices, this could result in a very positive outcome for us if the bill is enacted. Now, I’ll hand it over to Richard to provide more details on the carbon capture utilization and storage enhancements.

Yes. Devin, let me start with a few updates on our direct air capture and carbon capture utilization and storage initiatives, followed by some specifics on how this could aid our development plans. Regarding direct air capture, we are making solid progress. From a technology and engineering perspective, we have completed the Front End Engineering Design and are on track to begin construction by the end of this year. We are currently focused on finalizing specific bid packages and carefully considering the supply chain as we approach the year's end. On the market side, we are receiving robust support for carbon dioxide removals related to sequestered CO2 offtakes, and we anticipate continued positive movement there. Policy support is also playing a crucial role in reinforcing our development strategy. As for our capitalization efforts, we are being strategic about funding not only for Plant One but also for future projects, acknowledging the importance of partnerships in this process. By the end of the year, we aim to kick off construction, complete detailed engineering, and advance our innovation efforts. Our innovation center with carbon engineering is achieving significant strides, contributing valuable insights for Plant One. One of the key takeaways from that facility is our focus on continuously reducing the cost of capture throughout the plant's lifecycle, which opens many opportunities. In brief regarding the CCUS hubs, we are concentrating on three key areas along the Gulf Coast. We have successfully secured over 100,000 acres for development, which is a significant achievement, and we are engaging extensively with emitters. Additionally, our recent midstream partnerships enable us to efficiently manage CO2 transportation within those hubs. We expect to share more updates on these initiatives as the year progresses. Overall, we have encountered numerous developments in the past quarter, which we will incorporate into our plans for 2023 and beyond. Lastly, concerning supportive policies, we view them as accelerators for us. They provide revenue certainty that empowers our development efforts, which is crucial for our business's success. Our goal is to enhance technology, reduce costs, and achieve success in manufacturing and project development. Having this certainty enables us to expedite our development plans, potentially lowering costs more quickly and facilitating a sustainable business model sooner. When considering the next several years in terms of business and emissions reduction, we believe our progress could be substantial. The anticipated longer runway for developing scale is reflected in the language. We see increased value support aligning with global CCUS efforts to determine the catalysts necessary for success. Furthermore, it is essential to acknowledge all emission sources, including point sources from industrial and power sectors, as well as recognizing carbon removals and direct air capture. The inclusive approach to both small and large sources is beneficial not only for us but for other developers as well, fostering the economies of scale necessary to achieve commercial viability.

And just to conclude on that, I'd say that the federal leasing, onshore, offshore, the methane emission reductions in carbon capture, while we talked about what it does for Oxy, this is very good for our industry. Lots of companies will benefit from this. It will provide jobs and it will help the country meet the goals that the President has set out for emission reduction.

A lot of positives to look forward to there. My second question is just on inflation. You mentioned in the prepared remarks that you've been able to take some steps to offset inflationary pressure. I was wondering if you could talk a little bit more on the underlying inflationary trends and also the offset initiatives that you have in place?

Yes. We initially expected $250 million for our 2020 projections based on actuals, which would add that amount this year. Now, we estimate between $350 million and $450 million. Unfortunately, it all falls under Richard's responsibility, but he is managing it very well. I'll let him provide the details.

Yes. Perfect. Thanks, Vicki. Yes, just to walk through that, I mean, a couple of things. Certainly, we have seen that 7% to 10% incrementally for us this year. But in our base plan, we had assumed a 2% offset, and we're now up to 6%. And so part of our strategy, and I'll talk through a couple of pieces on this whole thing, was securing quality resources. If we get into the production cadence for the second half of the year, that delivery schedule and performance is very important. And so working with the right vendors to secure that has been important for us. But let me just rattle off a few. Like most people, OCTG has seen some of the highest sort of inflationary pressures. We work with 1 key supplier and 1 distributor for that. And so when we think about sort of inflation, you think about what is the supply security and then what is the pricing. In the supply security, we feel good out a year and really have worked that hard over this year. Developing in core areas like we do gives us a lot of ability to do that. And in pricing, we secure out about 6 months. And so we feel good going into the end of the year and then into 2023, that we're timing that fairly well in terms of how that looks. Rigs and frac core, as I mentioned earlier, securing some of those operated resources. Shifting the OBO dollars allowed us to get in front of that and get, again, the right rigs and frac cores for that. We're contracted with a little over 50% of our rigs through the first part of next year. And our frac core's similar as we look out. And so feel good about that, but we've really narrowed again to the core frac and rig providers that we feel like can secure performance. And then finally saying, again, we've worked a lot on that. I think, one, we've gone to more integrated frac providers, and they continue to help us on logistics and sand supply. But then our sand supplier, our logistics facility in Aventine has allowed us to get ahead on that. And so we feel like supply is secured, and most of our price is secured through the second half of the year. So those have been the big areas that have moved up for us. It has definitely been drilling and completion focused facilities have seen a lot less, 5% OpEx, a lot less as well. So hopefully, that provides some detail in terms of what we've been doing.

The next question comes from Doug Leggate from Bank of America.

Vicki or Rob, I wonder if I could go back to the discussion around potentially being a bit more aggressive than a $4 cash return in 2023? And I guess my question is, where do you see the, I guess, the flexibility regarding trying to pay down the preference burden, I guess, the $10 billion, versus continuing to pay down debt? What's the trade-off between those 2, if you could try and frame it for us? I guess I'm trying to understand how much more than $4 per share you'd be prepared to go?

Doug, it really depends on the macro environment. At this moment, we are struggling to even forecast prices from one hour to the next or even by the minute. A lot of our strategy regarding the preferred shares will rely on the macro, as the terms of the deal can be challenging unless planned in a way that allows us to leverage the trigger point. Currently, we are focused on assessing what the macro environment will look like, and we are prepared to make the best value decision, whether that involves continued debt reduction alongside preferred and common shares. However, the reality is that within our capital framework, we have consistently prioritized reducing debt. We will continue to do that and aim to do so at a faster pace than the maturities, but we are uncertain about how quickly we can achieve that. Regarding the preferred shares, it truly depends on our assessment as we move toward the end of this year and look into next year, considering whether a recession occurs, and if so, whether it will be short, long, or severe, as well as what the other opportunities might be from a debt perspective, which could be influenced by inflation trends.

I appreciate the answer, Vicki. And I'm going to stay with you, if I may, as a quick follow-up. So before things got crazy over the last couple of years, you had talked about low single-digit growth in production. And of course, the priorities all changed with the balance sheet. So as you kind of get line of sight to the balance sheet and back to perhaps where you want it to be, what are you thinking now in terms of what happens to the growth element of prioritizing in terms of where you relatively prioritize capital? And I'll leave it there.

Well, the good thing is what we see that we have today is a great opportunity, and that is that we don't have to grow our cash flow right now. And we have an opportunity because of the valuation of our stock right now to continue to make that a key part of our value proposition going forward. We'll do a little bit of dividend increase. We'll certainly mature our debt faster than what the current schedule is in terms of maturities because we want to accelerate that. But we'll also buy back a significant volume of shares, or at least we hope to over the next few years. And we don't feel the need to grow production until we get beyond that point because we feel like one of the best values right now is investment in our own stock.

The next question comes from Neal Dingmann from Truist.

Vicki, maybe just to follow on that last one. On M&A, are you saying that sort of given the current upstream, midstream OxyChem, you'll likely stand pat with either you don't really obviously need to divest anything and still the best spend on the money is in livestock, would it be fair to say the biggest M&A might be coming from the low carbon area?

I believe the only mergers and acquisitions that make sense for us are in line with what we have been doing, specifically to expand our presence in our current areas. This means increasing our working interest or trading acres for small acquisitions related to our resources and enhanced oil recovery businesses. We have opportunities to do this, including some recent offshore activities. Therefore, we're not pursuing large-scale M&A. However, our approach to low carbon ventures is different since we are actively growing that business. We are focused on identifying technologies that align with our strategy, rather than investing in numerous small tech companies indiscriminately. We will invest in technologies that enhance our strategy. The team has already invested around $200 million, which has allowed us to engage with two truly innovative technologies. One is NetPower, which produces electricity at a lower cost than traditional gas plants, all while capturing emissions. This technology is crucial for us and could revolutionize the global electric power generation sector. Direct air capture is also an important area for us, and we are exploring additional technologies that can genuinely enhance our business. This is our approach to investments and opportunities in the low carbon space.

Okay. And then one last question for either Robert or Jeff. Regarding the preferred shares, has there been any discussion about possibly directly repurchasing those, considering the company's strong equity position? I'm just curious if that's a possibility or if it will be managed like you would with debt buybacks.

It's really going to be a part of a more comprehensive evaluation as we go forward. So we'll look at that as time passes, and we'll certainly keep you guys updated. But what we intend to do is make the best value decision and proceed with the capital framework that we've laid out.

The next question comes from Jeanine Wai from Barclays.

Our first question, I guess, maybe heading back on cash returns and a follow-up to a couple of the other questions. The plan for 2023-plus now is to retire debt maturities as they come due. We're looking at your debt schedule, and there's really nothing more than like $2 billion coming due in any one year, so super manageable until 2030. You've got cash building on our model to, call it, like $12 billion on strip by the end of the year. So lots of options. You had some helpful comments on the macro governors on how you're going to allocate capital over the next year or 2. Do you have an updated view on your reserve cash level? We realize there's a lot of reasons to hold cash above that, but that's always a helpful number for us.

Yes. Before I pass that to Rob for his response, I want to acknowledge your point about our debt maturities. This year, we anticipate reducing our debt by another $2 billion to $2.5 billion, bringing us close to $18 billion. To reach the $15 billion that Rob mentioned, we will have all those maturities due before the end of August 2025. We do not want to wait three years to reduce our debt to $15 billion, so we plan to significantly cut that amount, assuming the macro conditions permit. We aim to achieve the $15 billion target sooner rather than later, and it remains a priority for us. Now, I'll turn it over to Rob to address the other question.

Certainly, based on what Vicki mentioned and our target, we expect to exceed $1.9 billion for the share repurchase program for the rest of the year, provided the macro environment remains stable relative to current prices. Our strategy involves addressing some of the maturities you outlined. We have been effectively managing both short- and long-term debt maturities, with about 45% of them due year-to-date and around 55% later in the decade. We continue to be strategic in reducing near-term maturities, particularly those with higher interest rates that have decreased due to lower overall rates, while also taking advantage of discounts on longer-dated bonds. You can expect this balance to persist. Regarding cash reserves, our manageable debt maturity profile has allowed us to maintain higher cash levels historically. We finished last year with approximately $2.5 billion and aim to reduce that to around $1.5 billion by year-end, freeing up an additional $1 billion in cash for this year through reduced reserves.

Okay. Great. That's very helpful. Maybe if we could turn to operations and the Permian. You probably provided some really helpful color on the Q3 Permian guide in your prepared remarks. And the implied 4Q Permian guidance calls for, I think we calculated 12% increase quarter-on-quarter to hit the midpoint. And it sounds like from your comments, there are some third-party stuff that's going on that may come back online in Q4, which will help. But any comments that you have around kind of how you try to stack the deck in your favor on execution in Q4 in the Permian, that would be really helpful just because I think a lot of people are looking at the Permian at the end of the year and trying to figure out implications for next year.

I appreciate your question. We considered various factors in our production delivery strategy for this year. Reflecting on our rig count, we started the year with approximately 11.5 rigs in the second half of 2021, increased to over 15 in the first half of this year, and reached 19 in the second half. Securing those operated rigs early on was crucial for our performance. Similarly, in the latter part of this year, we expect to add around 78 more wells compared to the first half, marking a significant increase in activity. We are utilizing our frac cores more effectively with our development plans and adding one more in the second half, leading to smoother operations thanks to our OBO capital transition. Performance remains a key focus for us operationally. In the Delaware, about 80% of our wells coming online in the second half are Third Bone Springs to Wolfcamp A, which reduces the risk associated with production deliveries. We've extended our lateral lengths by 1,000 feet compared to last year, and our 24-hour IP has improved by approximately 14% compared to the first half of last year. All these factors contribute to minimizing risks for the second half. Our drilling completion efficiencies have also improved, with feet per day increasing about 10% quarter-to-quarter and nonproductive time reduced by about 7% in the Delaware. With the addition of these rigs, we've enhanced our operational performance. We anticipate a 10% improvement in time-to-market for our operations in the second half. We've laid the groundwork in the first half; now we just need to execute. The plan we created is designed to achieve the production growth you mentioned, and we are on track to do so.

The final question comes from Neil Mehta from Goldman Sachs.

The first question is about the path to investment grade. Can you share any details about the milestones you're aiming for to achieve that? How should the investment community view the timing, recognizing that it's beyond your control? Also, what would reaching investment grade mean for your business?

Yes, Neil. Sure. Year-to-date, we have paid off $8.1 billion in debt, significantly exceeding the initial goal of $5 billion for the year. In the second quarter, we addressed 60% of the annual risk related to our zero coupon bonds that come due every October. Looking back to June of last year, we had retired nearly $15 billion in debt, showcasing substantial progress in our debt reduction efforts. Additionally, all three rating agencies have their own metrics that contribute to their evaluations. Currently, we are one notch below our internal forecasts, but we expect to surpass most of these criteria before the year concludes; in fact, we are already ahead when considering the last twelve months. Conversations with the agencies indicate that, given a different oil price environment—with all agencies projecting long-term oil prices below current levels—they are confident we won't regress into a high-yield credit status. For instance, Moody's is looking for retained cash flow to adjusted debt to exceed 40%, with retained cash flow excluding preferred dividends, while adjusted debt includes half of the Berkshire figure, which we have already surpassed. Adjusting for Moody's price outlook, we’re still ahead. On the other hand, Fitch examines our mid-cycle funds flow from operations, which we expect to significantly exceed the 5.5x coverage by year-end. We are rapidly meeting these metrics, more so than we or the agencies anticipated. We are engaged in constructive discussions with them, ensuring our decisions support this progress. While we can't control the timing, we are on track with the various metrics they require and feel confident about our standing as the year concludes. We do have a gap with S&P's reported debt expectations, but it's the only significant gap we face at the moment. I am confident that we can meet the criteria laid out by Fitch and Moody's before the end of the year.

In the interest of time, this concludes our question-and-answer session. I would like to turn the conference back over to Vicki Hollub for any closing remarks.

Just want to thank you all for your participation in our call today, and have a good day. Thanks.

Conference has now concluded. Thank you for attending today's presentation. You may now disconnect.