Good morning, and welcome to the 2026 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 2026 Annual Meeting. During the webcast, we may make certain projections or other forward-looking statements within the meaning of the 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 2025 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 is 9:00 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. Good morning, everyone. One word sums up the last decade for Oxy: transformational. We strengthened our portfolio, expanded our resource base, and built a more focused and resilient business defined by quality, balance, and durability. Today, Oxy has the best talent, assets, scales, and capabilities to deliver sustainable long-term value through the cycles. Our last major step in our 10-year plan was the sale of OxyChem, which we announced last year and closed in January. Made possible by the quality of our oil and gas portfolio, the sale helped strengthen our balance sheet and enables us to deliver greater value from our high-return oil and gas assets. As a result, the portfolio we have today is the strongest Oxy has ever had.
Turning now to 2025, our teams accomplished many exceptional operational achievements, including record annual production of 1.43 million BOE per day, while spending $300 million less in oil and gas capital and reducing operating expenses by $275 million. More importantly, our employees delivered those results while setting a new safety performance record. Also in 2025, we increased our resource base by 2.5 billion BOE to 16.5 billion BOE versus 8 billion in 2015. This provides us with more than 30 years of low-cost development opportunity, which we can optimize through our expertise in enhanced oil recovery in both conventional and unconventional fields. Our operational success drove strong financial performance in 2025 as we generated $10.5 billion of operating cash flow and $4.3 billion of free cash flow before working capital.
This enabled us to accelerate principal debt reduction by $4 billion. Coupled with net proceeds from the OxyChem divestiture, we reduced principal debt to approximately $13.8 billion as of March 19th, the date of our proxy statement. Our financial performance also supported the February increase in our quarterly dividend, which is up more than 18% since the beginning of 2025. Leveraging this success, we're now focused on extending and enhancing our low-cost resource base, generating resilient free cash flow across the commodity price cycles, and driving greater cost and capital efficiency. We've seen considerable efficiency gains from implementing AI throughout our business and expect to see more in the future. We also have continued to prioritize net debt reduction to further strengthen our balance sheet.
To deliver on these, our dedicated teams work each day to safely and responsibly provide energy that communities need, while also striving to develop and apply innovative solutions to lead Oxy and others toward a more sustainable future. Now I'd like to announce that after 10 years as President and CEO of Oxy, I will retire on June 1st but will remain on the Board. I'm deeply grateful for the support of our exceptional leadership team, our strong Board, and our amazing employees. Together, we strengthened our portfolio, achieved best-in-class technical and operational performance, and made significant progress toward restoring our balance sheet. Oxy is now well-positioned for the next stage of our strategy, Richard Jackson's experience, operational expertise, vision, and passion make Richard perfectly suited to lead us through this next stage.
Also effective June 1st, Richard Jackson will become President and CEO and will also join the board. I'll now ask Jack Moore, Chairman of the Board, to call the meeting to order.
Thank you, Vicki. Before we call the meeting to order, I wanna thank you for your tremendous service to Oxy. Over the past decade, you and your team have built a culture with a relentless focus on teamwork, innovation, and operational excellence. You've also demonstrated a deep commitment to our shareholders, customers, and the communities where we operate. I think more importantly to you've earned the deep respect of not only this Board, but the more than 10,000 employees of Oxy all over the world. Vicki is a visionary. As the first female CEO of a major U.S. oil and gas company, Vicki has helped pave the way for the next generation of women in the oil and gas industry. Under her leadership, Oxy has successfully navigated a series of complex strategic transactions that have helped the company build a superior portfolio with decades of low-cost development runway.
I'm also excited that the Board has named Richard Jackson as Oxy's next President and CEO and have appointed him as a member of the Board effective June 1. Richard is a fantastic leader who has demonstrated success not only as COO, but in each position he has held over the 20+ years with Oxy. He has an exceptional command of the company's business and operations and is the absolute right person to lead Oxy into this next chapter. I'm also pleased, as Vicki mentioned, that she will continue to serve on the board and contribute to Oxy's strategic direction. With that, I want to welcome you to our 2026 annual meeting and shareholders. The meeting is officially called to order. At this time, I'd like to introduce the other director nominees who are on the call with us 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 also represented here today by partners Camaron Thorson and Carlos Martinez. Also joining us is Natalie Hairston from the American Election Services, who will serve as the Inspector of the Election for today's meeting. As Secretary of the 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 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 10th, 2026 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 19th to holders of record as of the record dates. 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 2025 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 84% 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 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 2027 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 M. Gutierrez, Vicki Hollub, William 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 31st, 2026.
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 that 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 votes 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, including to oversee Oxy's business strategy in the intelligence age. Can you please speak to that?
Thanks, Brittany. As mentioned earlier, we have 10 Director nominees up for election, nine of whom are independent. The Board remains committed to ongoing and thoughtful refreshment of its membership and strives to maintain an appropriate balance of tenure, backgrounds, and skills. The Board believes that this ongoing refreshment, which has resulted in a third of the Independent Directors beginning their service at Oxy within the past five years, further aligns board composition with the evolving needs of the company and promotes consideration of fresh viewpoints and perspectives. Jack, is there anything you'd like to add?
Thanks, Nicole. I'd add that we continue to have great dynamics on this board. We have a shared commitment to oversee Oxy strategy and risk with a strong focus on maximizing shareholder value. I believe we also communicate effectively, and there is mutual respect among us all, even when there are differing opinions. Our governance committee periodically discusses Board refreshment, and each year we complete performance evaluations where we rank and discuss preferred director candidate skills and other qualifications to meet Oxy's ongoing and future needs. While the current size and compensation of our Board are working well, I believe we'll be opportunistic going forward on adding new members with a focus on industry experience and technology. To stay informed on digital and AI transformation, the Board is briefed on Oxy's AI and other technology initiatives. Certain directors have separately attended seminars and other educational sessions.
Thank you both.
Do we have any other questions regarding the proposals?
No, we do not.
Thanks, Brittany. That concludes the question- and- answer session regarding the proposals.
Thank you, Nicole. I now can declare the polls are closed. Nicole, will you please provide a 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 1 with an average level of support of 98%, have approved Proposal 2 with over 94% voting in support, and have approved Proposal 3 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 is 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 you have any questions?
Yes. We've received a few questions regarding plans to grow the dividend. Can you speak to that?
Yes. Delivering a sustainable and growing dividend remains central to our strategy. In line with this, the board authorized a more than 8% increase in our common dividend in February. On an annual basis, subject to Board approval, the dividend is $1.04 per share at the new rate compared to the previous annual rate of $0.96 per share. Since we announced the CrownRock acquisition in December 2023, we have worked diligently to strengthen our balance sheet, improve our resilience in lower commodity price environments, and free up cash from interest payments to increase the quarterly dividend. In doing so, we've almost doubled our dividend over that time period.
Thanks, Vicki. We've received a few questions regarding our international oil and gas operations, including the impact of the ongoing conflict in the Middle East and whether we plan to enter other jurisdictions in light of geopolitical events. Can you address that?
Yes, I'm happy to. First, I wanna recognize our employees in the Middle East, along with our partners and host governments, for their attention to safety and asset reliability while maintaining disciplined execution under very challenging circumstances. It's a dynamic situation that we're closely monitoring, and I'm extremely proud of how our teams responded and continue to perform. Back to the question. As I touched on earlier, we've transformed our portfolio over the last decade with our operational footprint sustainably or substantially more domestic now. This has lowered our overall exposure to geopolitical risk. With this shift in the breadth and quality of our asset base, I believe we have the strongest portfolio Oxy has ever had. This includes our international assets and operations in which we've continued to strategically invest. In doing so, we've developed strong relationships in the international jurisdictions where we currently operate.
Looking ahead, I don't expect our risk appetite or asset mix to significantly change. We will also provide an update regarding the impact of the ongoing conflict in the Middle East on our operations and overall financial performance on our earnings call next week.
Thank you, Vicki. The next question is: what is driving the difference between the prices Oxy receives for its natural gas sales in the U.S. compared to market prices?
That's a good question. We've generally obtained greater value in our U.S. operations from our oil production than our associated gas production. The growth in unconventional oil production in both the Permian and DJ basins from us and other producers, combined with the limited local industrial customers and natural gas power generation, has led to unprecedented volumes of associated gas that must be transported long distances through existing pipeline networks to natural gas customers, leading to lower realized natural gas prices in our operating areas compared to benchmark prices. Our midstream and marketing team works diligently and effectively with our midstream partners to maximize the combined value of our oil, natural gas liquids, and natural gas, including optimizing our midstream contracts and leveraging our natural gas storage assets to extract value from natural gas during market dislocations.
The growing demand for electricity could significantly affect both the regional and seasonal demand for natural gas and both benchmark and realized prices in the coming years.
Thanks very much, Vicki. We haven't received any other shareholder questions.
Thanks, Brittany. That concludes the general question- and- answer session. On behalf of the Board, thank you for your continued support and ownership of Oxy.
Ladies and gentlemen, this concludes the 2026 annual meeting of shareholders of Occidental Petroleum Corporation. You may now disconnect.