Good morning and welcome to the 2025 Annual Meeting of Shareholders of Occidental Petroleum Corporation. I would now like to introduce Oxy's Vice President, Chief Compliance Officer, and Corporate Secretary, Nicole Clark, to begin the meeting.
Good morning, everyone, and thank you for joining Oxy's 2025 Annual Meeting. During the webcast, we may make certain projections or other forward-looking statements within the meaning of federal securities laws. These statements are subject to risks and uncertainties that may cause actual results to differ materially from those expressed or implied in these statements. Please refer to Oxy's 2024 Form 10-K and our subsequent SEC filings for additional information regarding risks and uncertainties that could cause such differences. In addition, today's presentation contains references to non-GAAP financial measures. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in Oxy's filings with the SEC and on the Investor Relations page of Oxy's website. It's 9:01 A.M. Central Time, and the polls are now open.
With that, I'll turn the call over to Oxy's President and Chief Executive Officer, Vicki Hollub, to share a few opening remarks before we call the meeting to order.
Thanks, Nicole, and good morning, everyone. Thank you all for joining us today. 2024 marked an exciting year for Oxy. Strategic and operational achievements drove strong financial performance in 2024 and set us up for more success in the future. I'd like to cover a few notable highlights from the year. First, we closed on the strategic acquisition of Crown Rock, adding Midland Basin scale and high-margin inventory. The acquisition considerably expanded our access to high-quality, unconventional domestic oil assets. We've been very impressed with the Crown Rock team members who joined Oxy, the quality of the assets, and the overall integration efforts. We also made exceptional progress on STRATOS, our first commercial-scale direct-air capture facility, which is on track for commissioning and startup in 2025.
In 2024, while our team was building STRATOS in West Texas, our carbon engineering team in Squamish made remarkable strides on the R&D front, some of which are already being incorporated into Phase II of the STRATOS buildout. These innovations are expected to yield scope and cost efficiencies. As I mentioned before, we believe direct-air capture will deliver long-term value and also help the U.S. extend our energy security by providing additional CO2 for use in existing reservoirs to recover oil that otherwise would be left behind. This oil will also help to provide low-carbon fuels the world needs. Additionally, we can help hard-to-abate industries like aviation and tech that are looking to address their carbon footprint by providing carbon removal credits. In 2024, we also had many operational achievements, including record U.S.
Oil production of 571,000 barrels per day from our Permian, Rockies, and Gulf of Mexico assets, record combined production from ongoing operations of 1.3 million BOE per day, with key contributions from both our U.S. and our premier international assets in Oman, the UAE, and Algeria, as well as the Dolphin Energy Project, and record year-end proved oil and gas reserves of 4.6 billion BOE, a 15% increase from 2023. Most importantly, these accomplishments are underpinned by a remarkable commitment to safety across all segments. In 2024, our employees tied our best-ever safety performance record, and most impressively, we achieved it with higher activity levels. Our operational successes drove strong financial performance. In 2024, we generated $11.7 billion of operating cash flow and $4.9 billion of free cash flow before working capital.
This enabled us to pay approximately $800 million of combined dividends and supported the board's approval of a 22% dividend increase in early 2024 and an additional 9% dividend increase early this year. It also helped us to meet our near-term commitment of repaying $4.5 billion of debt several months ahead of schedule. This year, building on our operational and financial successes in 2024, we are focused on strengthening our balance sheet as we continue our deleveraging progress. Recognizing the need to also preserve future development opportunities and associated cash flow, we are advancing our major projects, bringing STRATOS online this year with OxyChem's Battleground modernization and expansion project on track for completion next year. All of these developments reflect our dynamic culture of innovation and commitment to operational excellence.
Every day, our dedicated teams work to safely and responsibly provide energy and essential chemicals that communities need, while also striving to develop innovative solutions to lead Oxy and others into a more sustainable and secure future. I'm grateful to the board, senior leadership, and every employee for all their hard work and dedication to delivering results and maximizing value for our shareholders. I'll now ask Jack Moore, Chairman of the Board, to call the meeting to order.
Thank you, Vicki. On behalf of the board, I'm pleased to welcome you to our 2025 Annual Meeting of Shareholders. The meeting is officially called to order. At this time, I'd like to introduce our other director nominees who are on the call with us here today. In addition to Vicki Hollub, we have Vicky Bailey, Andrew Gould, Carlos Gutierrez, Bill Klesse, Claire O'Neill, Dick Poladian, Ken Robinson, and Bob Shearer. Our independent auditor, KPMG, is represented here today by partners Camaron Thorson and Carlos Martinez. Also joining us is Natalie Hairston from American Election Services, who will serve as the inspector of election for today's meeting. As Secretary of this meeting, Nicole will now provide brief remarks on certain procedural matters related to today's meeting and review the matters to be voted on.
Thank you, Jack. The format of today's meeting is outlined on the agenda, which is shown in the center of the meeting portal, and the rules of conduct may be accessed at the bottom right corner of the meeting portal under Meeting Materials. These procedures are in place for us to have a fair and orderly meeting. Please note that this meeting is being recorded. However, no one attending via the webcast or by telephone is permitted to use any audio recording device. If you are a shareholder and you have not already voted or you wish to change your vote, you should have logged into the meeting using your control number, which will allow you to vote online during the meeting. Your control number may be found on your proxy card, voting instruction form, or electronic notice to vote.
You may vote by clicking on the Vote Here button at the bottom center of the meeting portal. If you have already submitted your proxy card or voted by internet or telephone, your shares have been voted accordingly. You do not need to vote today unless you are voting for the first time or you wish to change your vote. The Board of Directors fixed March 10, 2025, as the record date for the determination of shareholders entitled to receive notice of and to vote at this meeting. We began delivering the notice of internet availability of the proxy materials, the Proxy Statement, and our annual report on Form 10-K on March 20 to holders of record as of the record date. We have received an affidavit of mailing establishing that notice of this meeting was duly given.
A copy of the materials described above and the affidavit of mailing will be incorporated into the minutes of this meeting. The oath of office of Natalie Hairston, our independent third-party inspector of election, will also be included in the minutes. The Proxy Statement and our 2024 annual report are available to shareholders via the meeting portal. We have a report from the inspector of election that there are shareholders present at this meeting in person or by proxy representing more than 82% of the outstanding shares of common stock of Oxy entitled to vote. I therefore declare that a quorum is present and this meeting is duly convened for the purpose of transacting such business as may properly come before it. The only matters properly before our shareholders today, in accordance with the company's bylaws, are those set out in the notice of Annual Meeting and Proxy Statement.
I will now review the matters to be voted on at today's meeting. The first proposal is the election of 10 directors to serve for a one-year term ending at the Annual Meeting as described in the Proxy Statement. The board has nominated the following persons to serve as directors of the company: Jack Moore, Vicky Bailey, Andrew Gould, Carlos Gutierrez, Vicki Hollub, Bill Klesse, Claire O'Neill, Dick Poladian, Ken Robinson, and Bob Shearer. The biography of each director nominee is included in the Proxy Statement. The board recommends a vote for each of the director nominees. The second proposal is the advisory vote to approve named executive officer compensation as described in the Proxy Statement. The board recommends a vote for this proposal. The third proposal is the ratification of the selection of KPMG as Oxy's independent auditor for the fiscal year ending December 31, 2025.
The board recommends a vote for this proposal. The fourth proposal is approval of Oxy's amended and restated 2015 long-term incentive program. The board recommends a vote for this proposal. We will now address any shareholder questions that we have received relating to the proposals. To allow enough time to respond to all of our shareholders' questions, the rules of conduct for the Annual Meeting include limits on the number of questions any individual shareholder may ask at the meeting. If any shareholder has additional questions following today's meeting, we encourage you to reach out to our investor relations team at the email address or telephone number listed on Oxy's website. Please note, the polls will be closing immediately after we address any questions relating to the proposals.
As a reminder, shareholders who have sent in proxies or voted via telephone or internet and do not wish to change their vote do not need to take any further action.
Thanks, Nicole. We've received a few questions regarding board composition and whether or not there are any plans for refreshment. Can you speak to that?
Thanks, Brittany. As mentioned a little earlier on the call, we have 10 director nominees up for election, nine of whom are independent. Over the years, the board has been committed to ongoing and thoughtful refreshment of its membership and strives to maintain an appropriate balance of tenure, backgrounds, and skills on the board. The board believes that this ongoing refreshment, which has resulted in almost half of the independent directors beginning their service at Oxy within the past five years, further aligns board composition with the needs of Oxy as our businesses evolve over time and encourages regular consideration of fresh viewpoints and perspectives. The board also believes that over time, directors develop an enhanced understanding of Oxy and an ability to work effectively as a group. As a result, the board aims to have directors with a mix of tenures represented.
Jack, is there anything you'd like to add?
Thanks, Nicole. I'd add that we have a great dynamic on the board right now. I believe we communicate effectively. There's mutual respect among the directors, and there's a shared commitment to oversee Oxy's strategy and risk with a strong focus on maximizing value to shareholders. Our governance committee periodically discusses board refreshment, and each year we complete performance evaluations where we prioritize preferred director candidate qualifications to meet Oxy's ongoing and future needs. While the size and composition of our board is working well, I believe we'll be opportunistic going forward on adding new members.
Thank you both. We've received a few questions regarding the pay-for-performance alignment of the executive compensation program, as well as the vesting periods of RSU awards. Nicole, can you address both?
Certainly. We remain committed to the pay-for-performance philosophy that underpins our executive compensation program. We strive to incentivize our executive team to focus on strategic business objectives that, when met, will continue to create shareholder value. To accomplish this, a substantial portion of NEO, that is named executive officer, compensation is performance-based. As a result, company performance significantly impacts the realizable values of NEO compensation awards. For 2024, the compensation committee established a mix of short-term and long-term incentive compensation. That resulted in significant at-risk pay for our CEO at 90% and for other NEOs at an average of 84%. As an example, as of December 31, 2024, the 2023 and 2024 TSR awards were trending below threshold performance, which would result in no payout and supports pay-for-performance alignment. See our 2024 Proxy Statement for more information.
On the vesting of RSU awards, similar to RSUs granted to broad-based employees, the RSU awards granted to our NEOs vest ratably over a three-year period. The only difference between broad-based employees and NEOs and other officers is that upon vesting, the shares received by NEOs and other officers are subject to a two-year holding period. Do we have any other questions relating to the proposals?
No, we do not.
Thanks, Brittany. That concludes the question-and-answer session regarding the proposals.
Thank you, Nicole. I now declare the polls closed. Nicole, will you please provide the preliminary report on the voting results?
Thanks, Jack. We will reflect that the polls closed at 9:15 A.M. Central Time. The inspector of election reports on a preliminary basis that shareholders have approved the election of each of the 10 director nominees named in proposal one with an average level of support of over 97%. They have approved proposal two with over 94% voting in support. They have approved proposal three with over 97% voting in support and have approved proposal four with over 97% voting in support. The final voting results will become part of the record of the meeting and will be reported in a Form 8-K to be filed in connection with the matters voted upon at this meeting.
Thank you, Nicole. Since there are no further formal business, the official business portion of the meeting is now adjourned. With that, we'll address shareholder questions that we have received relating to matters other than the proposals. Brittany, do we have any questions?
Yes. The first question relates to tariffs and the broader macro environment and the potential impact to Oxy over the near and medium term. Can you address that?
Given the ongoing negotiations, we are unable to fully assess the potential impact of any final trade agreements or tariffs to Oxy. However, there could be implications for business operations, our supply chain, certain product exports, and financial performance. The Board and Senior Management are focused on what we can control for the business to run efficiently in any price environment. With respect to the broader macro environment, the activity around tariffs, current and future actions by OPEC+, and other global events like the Russia-Ukraine war and the conflicts in the Middle East have impacted commodity prices and also create volatility in financial and stock markets, including Oxy's own stock performance. The Board is very focused on this and the strategy that Oxy's senior leadership has developed to strengthen the company's balance sheet by prioritizing excess cash flow and proceeds from asset investors for deleveraging.
Under this strategy, as Vicki noted earlier, Oxy met its near-term commitment of repaying $4.5 billion of debt several months ahead of schedule.
Thank you, Jack. Relatedly , we've received a few questions about Oxy's stock price performance.
Thanks, Brittany. Despite near-term pressure from weaker commodity prices and broader macroeconomic uncertainty, I remain confident that Oxy's strategic focus, high-quality assets, outstanding technical expertise, and exceptional operational performance position us well to deliver long-term value. Reflected in what I just noted about our near-term commitment, we have made substantial progress on deleveraging and have also expanded our low break-even inventory. Therefore, we believe we are well positioned to both withstand near-term volatility and return even more capital to shareholders as we execute on our plan.
Thank you, Jack. We've also received a few questions regarding how Oxy approaches diversity and how our related efforts and programs align with the company's overall business strategy and values. Can you speak to that?
Yes, I'm happy to speak to that. Oxy is a very diverse organization and will continue to be a diverse organization by virtue of the different areas in which the company operates. Oxy's diversity programs have historically focused on creating a culture of inclusion and belonging. I think it will be important to maintain those going forward to be competitive in recruiting, hiring, and retaining our very talented employees.
Thank you, Jack. One of our shareholders would like more information on Oxy's sustainability efforts.
Sure, I can share more on that as well. Oxy strives to integrate sustainability throughout its operations, enhance related programs and performance, and transparently share our progress with shareholders and other stakeholders. This is overseen by the board and its committees. As part of our oversight in 2022, the board approved a set of principles regarding health, safety, environmental, and sustainability matters that Oxy's leadership developed to unify employees around key issues and frame the company's engagement. With these principles as a strong foundation, I'm very proud of all the work being done in Oxy's operations on environmental and sustainability matters. For example, Oxy has sustained zero routine flaring in its U.S. oil and gas operations. Oxy has also reduced routine flaring in global oil and gas operations by 80% compared to the company's 2020 baseline through additional gas compression and a rich gas injection project in Oman.
In addition, Oxy has implemented key emission reduction targets that include deployment of high-tech methane sensors, tankless facilities, centralized processing and gas lift facilities, temporary gas storage during plant or pipeline outages, and new technologies for leak detection and rapid repair. I encourage you all to read the company's sustainability and climate reports for more information.
Thanks, Jack. The next question is, what are the growth prospects over the next several years for the different commodities that we produce?
Oxy is a very diversified with complementary businesses and products that we believe position the company very well for the future. As you know, Oxy is a leading company in the Permian Basin and a major oil and gas operator in the United States with an outstanding portfolio of short-cycle onshore shale projects, tieback opportunities in the Gulf of Mexico, and a leading portfolio of carbon dioxide-enhanced oil recovery that helps increase recovery factors and enable long-term production. Oxy's international oil and gas operations are also performing very well and have strong relationships with our partners. Our midstream and marketing business provides flow assurance and maximizes the values of our products. With the policy direction that the current U.S. presidential administration has taken and the expected AI-driven electricity demand, it appears that U.S. natural gas is having a resurgence.
While there are varying predictions and demand fluctuates based on macro conditions, many analysts expect global oil demand to grow well beyond 2030, which is a positive for Oxy, our partners, and society. In chemicals, OxyChem is modernizing and increasing capacity at key chlor-alkali facilities and plants along the Gulf Coast to meet the robust demand it has experienced and maintain its competitive edge. Oxy Low Carbon Ventures is on track to begin commercial operation of its first direct air capture facility later this year. [Vicki Hollub] , all these complementary businesses have growth opportunities, and the board and Senior Management will continue to evaluate the company's business strategy with a focus on creating and sustaining long-term shareholder value.
Thank you, Jack. We haven't received any other shareholder questions.
Thanks, Brittany. This concludes the general question and answer session. On behalf of the board, thank you all for your continued support and ownership of Oxy.
Ladies and gentlemen, this concludes the 2025 Annual Meeting of Shareholders for Occidental Petroleum Corporation. You may now disconnect.