STAGES Analysis: OXY
For the past 10 years my primary focus has been the introduction of new technologies to the US Land market. During that time, across several companies, OXY has consistently listened to, utilized, and given feedback on every one of those new technologies. From their latest earnings release/call, it is apparent they apply this methodology across their entire US operations. In their Q2 update, they highlighted a few efficiency milestones achieved over the previous 12 months:
35% of the top 100 producing wells in the Permian since Q4 2019
Operations represented less than 10% of the Permian wells completed
Achieved a record eight days spud-release record in the Permian
Drilled 9,500' in a single day
Pumped for 23 hours in a single day in the Rockies
They have invested in the efficiency of their operations from drilling to completion to production.
Opportunity
OXY has operations in the Permian and the Rockies. In the Q2, 2021 earnings announcement, OXY reported 121 Permain and 127 Rockies completions in H1, 2021. These wells represent a total STAGES count for the US in H1 of ~12,600 STAGES. Moving to the second half of the year OXY reported the following:
Anadarko Acquisition + Debt
In May 2019, OXY merged with Anadarko. The merger increased their debt from ~$10B to $47B. Most of their conference call and earnings reports since then have focused on their debt reduction activities. This past quarter they divested $500MM worth of non-core Permian assets. Their efforts since the merger have dropped their long-term debt down to $35B.
Efficiencies
With the focus on reducing debt, Oxy discussed increasing efficiencies in their operations to "pay" for additional. In the Q2 earnings announcement, they've increased the rigs in New Mexico by 2. The increasing efficiencies they've gained have allowed them to increase activity without increasing the expected capital budget for the area.
Oxy continues to be a major player in both the Permian and the Rockies and is a huge opportunity for someone with a product that can increase their efficiency by reducing time or costs associated with the value it creates.