OXY
#It really wasn't much, <UNK>, because to some extent we ---+ or to a large extent we really exited most of those areas.
So, the cash burn that we had seen was really for the most part over with.
And through the fourth quarter there may have been a little bit in the way of working capital.
If you want to call it sort of $100 million more or less as we continue to look at exiting some areas internationally.
But by and large it is largely through.
I'd point out too that the only thing left really in terms of the difference between what we have defined as sort of core, non-core or core and not the ongoing operations at this point is really the Bahrain assets or operation, so that is really it.
So I think we're most of the way through.
Well, that is part of it and also the uplift or continued ramp at Al Hosn.
Again getting back to what I said earlier, we are seeing better productivity from our wells and we are particularly excited about the New Mexico Wells.
So, we are really reluctant at this point to give a forecast.
And <UNK> and his team would like to have at least one more quarter to see how that development will progress to determine not only what we expect Q3 and Q4 to look like, but also whether or not he might add another rig.
<UNK> you might have some more comments on that.
Yes, <UNK>, I think the other thing that we want to see is the effect of our base management programs.
We are having some really good success there with pump maintenance, with surveillance activities, re-completions and that is providing some uplift as well.
So we want to see all those play out before kind of committing to the back half.
You know at this point we have got a pretty good inventory in those areas with the infrastructure that meet a pretty low-price hurdle.
So, we will have some infrastructure but not the really big stuff in the near-term.
I think in a normal world, and that would be one where we would expect to see production increasing in the Permian and NGL and gas prices recovering to some degree, we would expect to see in the neighborhood of $100 million to $200 million income at least from the Midstream business.
Yes, thanks, <UNK>.
I think we see this extending across a good portion of that acreage.
It is not just in the Cedar Canyon area that we've showed some highlights on.
We are really encouraged with New Mexico.
Multiple benches.
And again, that is going to be a function of where you are.
Some benches are better in some geographic areas, but at least two and in some cases upwards of four.
Good question, <UNK>, trying to predict the time when that supply demand balance occurs is a little bit like trying to predict oil prices.
Today there is a pretty good excess of capacity in the market.
But having said that, a significant portion of our improvements are due to things like design changes, technology improvements, utilizing some proprietary things such as Oxy drilling dynamics.
We have invented some special stabilizers in drilling, integrated planning, manufacturing mode ---+ all those things are really driving the big portion of our cost improvements.
And those are sustainable.
We've maintained our workforce so when we ramp back up we won't have to access high cost consultants to run rigs and run frac cores.
And we have recently made an alignment change with our supply chain organization where they have been integrated into operations as part of our integrated planning teams.
And so, the result of that is we have got better alignment of our commercial and our technical strategies to the actual value drivers in each one of those programs.
And that lets us drive productivity, utilization, logistics improvements and that takes cost out of the system not only for us but for our suppliers.
And so, in most cases price is important but it is not the needle mover.
But we are in conversations with our strategic suppliers to determine ways we can better align our operations, drive out combined system costs and focus on goals where we have got common success.
And given our scale in the Permian we are getting pretty considerable interest.
So, we continue to make immediate improvements to cash flow and cost, we are proactively taking actions to mitigate against inflation in a higher WTI environment.
At the end of the day we will be ready.
Again, we take a pretty measured approach to updating our EORs in our inventory.
We want to see more production, better understand GOR modeling and so with a little bit more time we will update our EORs.
But we are really encouraged by the results we are seeing with kind of generation two, generation three not only frac designs but our modeling efforts.
We would expect those to help across the board.
What I would say about that is we really don't have a set price at which we would increase.
We want to see some sustainable improvement with prices and we want to make sure that the fundamentals support prices.
I know a lot of people are saying that around $50 they would start to ramp up.
We have a very deep inventory in both (Permian) Resources and the EOR business that would generate really good returns at $50.
We are pretty committed to staying at the $3 billion capital range for this year.
But <UNK> and his team in the Permian business are looking at opportunities to ramp up in those areas where they have already started development and we are prepared to do it when prices do recover.
But we would expect that to be maybe adding a rig toward the end of this year and then ramping up at some point next year again if prices look like they are going to be in a range that is sustainable.
Yes, we are looking at all areas within the Permian Basin.
For (Permian) Resources we would look in Delaware, Midland Basin, Central Basin platform.
We would also look in some of those some areas, particularly Central basin platform and parts of the Midland Basin, for EOR opportunities.
So we are definitely looking around the Permian.
Well, we look at the long view of things.
So the issue has not been with us in terms of what we would be willing to go out and do from a pricing standpoint because we, especially around EOR assets, those are assets that produce 50, 60, 70 years.
So we are taking a long view on looking at acquisition opportunities with both EOR assets and resources.
The issue has been with some of the sellers who believe that ---+ or seem to believe that prices were going to really spike back up to $80, $90, $100 and it seems now that both the outlook for prices is starting to come closer together between the buyers and the sellers, but not quite on the resources side to where we think it ought to be.
Right.
I think that what we have done with our staff has definitely differentiated us from our competition.
And I think it is a concurring view to how one should manage through a cycle like this.
What we have done is we made the commitment to our employees that we were going to keep our staffing level.
We did have a voluntary separation program at the beginning where some of our later career people who had family issues and needs to go and to leave the Company.
We allowed some people to leave.
But we were selective in terms of trying to make sure that we lost no capability internally.
And so, those people that did leave had in most cases done a great job of training and mentoring people to take their place.
So what we have ended up with is a very capable workforce that has the skills and experience necessary in the midcareer or later career experiences.
But also some early career people who have done just a phenomenal job of helping us through this down cycle.
Because what we did is, to try to ensure that we were reducing cost, we took some of our early career people, sent them to the field, they replaced contractors in both our production operations, our well servicing and our drilling activities.
And so they were replacing contractors who had been doing these jobs for a number of years, had a lot of experience and our early career people went out there, learned it quickly.
And because of the way they view things and their fresh approach to asking questions and looking at things differently, we expected them to go out there mostly to learn.
But they actually went out there to learn, they added value, they improved logistics and improved efficiencies.
And not only was it a cost reduction from the elimination of contractors, but it was actually an improvement because they did a fabulous job to improve efficiencies and to think about how to do things differently.
Our field staff, on the other hand, what they did is they got really aggressive and proactive with mentoring these early career people.
And so, the combination of both our experienced staff and our earlier career staff working together, they have really added value.
And that is part of the reason that our efficiencies are improving, we are seeing these cost reductions in the field, we have to attribute that to both the early career and the mentors out in the field.
In addition to that, what we are doing is we know that to be successful for the long haul with an industry that has changed now, the industry that we are facing today has reservoirs that are tougher to develop, costlier and really a world that's more complex than it used to be.
So what we feel like as we have got to get to the absolute lowest possible cost structure to ensure that we can ---+ we have sufficient margins in a wider price range than what we have worked in in the past.
And so, to do that we feel like you can't do business as usual.
You really have to take a different approach to how you are looking at cost structure reductions.
So, we have got teams that are working on things that are further out.
Some of which I can't talk about right now, but they are looking at how do we change the cost structure of 2018, 2019.
What do we have to do now to do that.
And so they are working on the longer view.
And these are some of the people that we deployed to these project groups from the drilling and completion operation since we had the major reduction in that activity.
What we found is by giving our staff more time to become more strategic and innovative they are delivering value.
So we not only have a commitment from our management to keep our staff, our staff has more than paid for that decision by their delivery and their performance and they are continuing to exceed our expectations.
Every time it seems that we set targets for them they exceed it because they are not ---+ they recognize that we have made the commitment so they have also made the commitment.
And they are just ---+ they have been phenomenal.
And our staff is very, very engaged.
And I believe we will come through this cycle with a much more ---+ a committed, loyal and highly skilled workforce that will be well prepared for any kind of ramp up that we will see over the next couple years.
Yes, I would say while we very much value our operations in Oman and Qatar, we also ---+ I have been very impressed with the UAE, especially the leadership in Abu Dhabi.
They are very progressive and we enjoy doing business there.
We have had success with a couple of companies there, Mubadala when we developed the Dolphin project and now ADNOC in the Al Hosn project.
We have seen that our team partners very well with both of those companies and both of those projects were highly successful.
I am going to let <UNK> talk about a project that we just entered into an agreement a year ago or so to look at some offshore fields there.
This is also a project I am really excited about.
And before I hand it to <UNK> to talk about that I would say in Oman, Block 62, we have just brought on some gas production there, which also is another growth opportunity for us there.
So we still believe there are opportunities to grow in the Middle East.
I will hand it over to <UNK>.
Thank you, <UNK>.
We have entered into an agreement with ADNOC on the Hail and Ghasha fields.
These are fields that have been producing oil for some time and they have had gas discoveries, some going back 40 years.
So, we have worked up an appraisal program for a number of fields and there has been a few additional fields thrown in we call the Dauma fields to determine just what and when we should be developing, make a recommendation to the State, as to how they can both increase their available gas supply, but also further develop some of the hydrocarbons that have not yet been developed other liquids included.
We have just amended that agreement to add a partner, the Austrian State Oil Company who we've partnered with in many places.
So there is a pretty robust team working appraisal and engineering development.
One other area of more immediate growth is that we recently ---+ <UNK> went to the region to participate in the inauguration of the Al Hosn facilities.
And it appears that we are well along the way to getting an agreement to expand the Al Hosn plant.
Engineering is underway and we are having further discussions later this month to determine just on what schedule and how we would do that.
So those are good areas of growth, both medium-term and long-term.
