The meeting reviewed the strong performance of the company in the second quarter of 2025, including $260 million in operating cash flow and significant progress in debt repayment. Despite the drop in oil prices, the company optimized its asset portfolio, accelerated debt repayment, and initiated a carbon capture project, demonstrating the company's dual commitment to environmental protection and economic benefits.

The oil and gas business exceeded production targets in the second quarter, thanks to the team's operational strength and diversified investment portfolio, especially with outstanding performance in the Rocky Mountains and Oman region. Despite the drop in oil prices, significant increase in cash flow was achieved due to effective cost control and improved production efficiency. By utilizing automation, sensor technology, and artificial intelligence, the optimization of cost structure was achieved, particularly in onshore and international operations in the United States, effectively reducing operating costs. Furthermore, through technological improvements and increased capital efficiency, the company achieved outstanding well performance and economic benefits in areas such as the Permian Basin and the Gulf of Mexico.

The midstream and marketing departments of Oxy Energy Company have shown outstanding performance in the latest quarter, mainly benefiting from the increase in crude oil marketing profits, optimization of natural gas marketing, and rise in sulfur prices. The company also benefited from new oil transportation contracts and made significant progress in low carbon projects, such as the completion of key milestones in the Stratos project and the start of the wet commissioning phase. In addition, Oxy Energy demonstrated strong demand in the carbon capture and removal technology market through the signing of carbon removal sales agreements. The company also announced a potential joint venture with XRD to evaluate the development of direct air capture facilities in southern Texas, as well as further highlighting its unique capabilities in the field of carbon capture and removal technology through the support of the U.S. Department of Energy. Oxy Energy Company also strengthened its financial position by selling non-core assets to accelerate debt repayment, laying a solid foundation for future growth.

In the second quarter, the company achieved an adjusted earnings per share of 39 cents and a reported net profit of 26 cents, demonstrating its financial health and profitability.

The company achieved approximately $700 million in free cash flow through optimizing operations, capital efficiency, and proactive market adjustments. Despite the decline in oil prices and market volatility, the company has maintained strong financial performance, partly benefiting from investment gains and market value adjustments. The company adjusted production guidance, expecting an increase in production in the second half of the year, but constrained by the decrease in production in the Gulf of Mexico. The revenue of the chemical sector fell below expectations, affected by weak global and domestic market demand. The company raised its full-year guidance for the midstream and marketing departments, expecting a more moderate performance in the third quarter.

It is expected that capital expenditures will tilt towards the third quarter of 2025 due to arrangements for oil recovery and expansion projects. By improving operational efficiency, the company has reduced its capital guidance range by $100 million and achieved cost savings of $50 million in international asset operations. Recent legislation has brought the company approximately $700 million to $800 million in future tax relief over the next two years, mainly due to adjustments in depreciation and R&D expense policies. Since the first quarter of last year, the company has successfully sold nearly $40 billion in assets, achieving debt reduction goals ahead of schedule. In the past 13 months, $7.5 billion in debt has been repaid, significantly reducing annual interest expenses and optimizing the debt structure beyond the original plan.

The conversation discussed the advantages of Oxy Energy Company's upstream asset portfolio, including high-quality short-term high-return non-traditional assets and low-declining traditional oil reserves, as well as the company's core competencies. In addition, the impact of tax benefits on cash taxes in 2025 and 2026 was mentioned, which is expected to increase deferred tax expenses but will not affect the effective tax rate.

Discussed the oil extraction contract signed with Oman, emphasizing a win-win cooperation model for both parties. Mentioned that 640 million barrels of oil have been produced over the past 10 years, showcasing the transformation of the project from steam drive oil extraction to multi-layer extraction, as well as a low-cost, multi-option sustainable development strategy. It was highlighted that investments will gradually be reflected in financial statements, emphasizing the long-term benefits of the project for investors and the government.

Discussions were held on recent non-core asset sales, especially the sales to Enterprise. Possible future scales of non-core asset sales were proposed, including cleaning and selling low-value scattered real estate to enhance cash flow and reduce debt. It was mentioned that the team is currently organizing assets for sale, emphasizing the importance of asset sales to financial strategy.

Discussed the strategic shift in focus towards point source capture opportunities in the carbon business, particularly in relation to enhancing carbon dioxide utilization for enhanced oil recovery, and the impact of future capital expenditures on potential tax savings on cash flow.

The conversation discussed the future production capacity trends of the Gulf of Mexico in the coming years, especially with the implementation of the 'Gulf of Mexico 2.0' project, which is expected to lead to steady growth in production. It mentioned the role of hydraulic fracturing projects in reducing average extraction costs and increasing stable production rates, as well as the increase in production capacity after the eastern facilities were renovated. Additionally, the high EUR (Estimated Ultimate Recovery) of new wells in the central region and the recent improvement in equipment reliability indicate a significant enhancement in production potential.

Discussions were held on the capital expenditure plan for the year 2026, which includes a $3 million reduction in oxygen expenses and a $2.5 million reduction in LCB5, as well as cost savings achieved through improving drilling efficiency and completing segmented operations. The team is working hard to optimize activity levels to maintain efficiency and may redirect capital towards low-decline, high-margin water flooding projects.

The dialogue discussed the challenges faced by the oil and gas production in the Gulf region and the corresponding strategies, including addressing pipeline constraints, optimizing pump operations, and planning future production. Through team collaboration and technological improvements, it is expected that stable production growth will be achieved in 2026 and 2027, with a focus on improving efficiency and planning.

Discussed operational optimization strategies, planning to conduct a major overhaul every two years, using multiple synchronized plans, including the reallocation of internal and external resources and long-term cooperation with suppliers. It is expected to be implemented starting from next year, and detailed plans will be disclosed in the future.

The dialogue discussed the application of AI technology in the oil industry, especially its potential in complex geological conditions, and its impact on industry transformation and production efficiency improvement. It emphasized the role of AI in underground resource development in the Gulf of Mexico, onshore in the United States, and in improving operational efficiency, demonstrating the investment and expected results of AI technology, and showcasing its broad prospects in the industry.

The discussion focused on predicting the peak of US oil production, emphasizing the importance of CO2EOR technology in improving oil recovery rates and extending energy independence. The goal is to develop 50 to 70 billion barrels of oil using this technology in the next five to ten years, which is expected to extend US energy independence by ten years, maintaining a competitive advantage in global affairs.

The conversation explored whether the current level of activity is restricted by capital or other factors, and how changes in contracts can enhance the project's competitiveness, suggesting that capital is not the only constraint and that contract improvements will enhance the attractiveness of the project.

Against the backdrop of current market oversupply, the company has decided to temporarily slow down its expansion pace and instead focus on reducing debt levels and operating costs, and strengthening capital efficiency. Each asset team is actively seeking ways to reduce costs in order to maintain profitability and long-term sustainability throughout the industry cycle. In particular, in the US region and the Block53 project, the company is gradually achieving dual improvements in capital and operational efficiency through optimizing drilling costs and improving operational efficiency, aiming for higher returns in the carbon dioxide project. Future capital investments in Oman will be adjusted according to market conditions.

The dialogue discusses the application of intelligent technology, supply chain optimization, and partnership relationships in oil and gas enterprises to achieve efficient operation of assets and sustainable growth. The enterprises emphasize that after restoring the balance sheet, they will moderately increase production based on their value proposition, while ensuring the implementation of long-term plans through capital allocation strategies. In addition, by diversifying asset portfolios and utilizing low-cost options, the enterprises demonstrate flexibility and potential to address future challenges.

The conversation revolves around the supply and demand situation in the chemical industry and future cash flow forecasts. It mentions the impact of China's overcapacity on PVC and caustic soda export prices, as well as the potential mitigating effect of capacity reductions in Europe and the United States. At the same time, it discusses changes in oil and gas production in the Permian Basin, including the reasons for the decrease in oil product proportion and the increase in gas and NGL recovery rates, as well as expectations for future production trends in the next six months.

The conversation discussed the shale oil producing areas in the United States, especially the Permian and Rockies regions, where production is expected to increase in the second half of the year, thanks to optimized well placement, improved drilling and completion efficiency, and the reuse of infrastructure. In terms of water treatment issues, the discussion pointed out that reducing water production through optimized well placement, strengthening cooperation with water treatment partners, and adopting advanced water recycling technologies can effectively lower water treatment costs. These measures are crucial for maintaining cost structure in future secondary reservoir development with high water production.

Discussed the economic feasibility of shale EOR projects under the current crude oil prices, combined with the 45Q tax incentives, with a focus on analyzing the constraints of CO2 supply. Introduced strategies to increase CO2 supply through direct air capture and point source capture, as well as plans to implement projects in Texas and Oman. Mentioned the preparation for the second DAC facility in South Texas, including strategies for government subsidies, technology innovation cooperation, and pre-signing sales contracts.