UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2023

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to ___________

Commission file number 1-9210

_____________________

OCCIDENTAL PETROLEUM CORPORATION

(Exact name of registrant as specified in its charter)

Delaware			95-4035997
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)
5 Greenway Plaza, Suite 110
	Houston,	Texas	77046
(Address of principal executive offices) (Zip Code)

(713) 215-7000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.20 par value	OXY	New York Stock Exchange
Warrants to Purchase Common Stock, $0.20 par value	OXY WS	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

þ Yes   ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

þ Yes   ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer        þ    Accelerated Filer        ☐    Non-Accelerated Filer     ☐

Smaller Reporting Company    ☐    Emerging Growth Company    ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

☐ Yes   þ No

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class	Outstanding as of April 28, 2023
Common Stock, $0.20 par value	891,745,187

TABLE OF CONTENTS		PAGE
Part I - Financial Information
Item 1. Financial Statements (unaudited)
	Consolidated Condensed Balance Sheets — March 31, 2023 and December 31, 2022	3
	Consolidated Condensed Statements of Operations — Three months ended March 31, 2023 and 2022	5
	Consolidated Condensed Statements of Comprehensive Income (Loss) — Three months ended March 31, 2023 and 2022	6
	Consolidated Condensed Statements of Cash Flows — Three months ended March 31, 2023 and 2022	7
	Consolidated Condensed Statements of Equity — Three months ended March 31, 2023 and 2022	8
	Notes to Consolidated Condensed Financial Statements
	Note 1—General	9
	Note 2—Revenue	10
	Note 3—Inventories	11
	Note 4—Long-Term Debt	11
	Note 5—Derivatives	13
	Note 6—Income Taxes	15
	Note 7—Environmental Liabilities and Expenditures	15
	Note 8—Lawsuits, Claims, Commitments and Contingencies	18
	Note 9—Earnings per Share and Stockholders' Equity	20
	Note 10—Segments	22
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		23
	Cautionary Statement Regarding Forward-Looking Statements	24
	Current Business Outlook	25
	Consolidated Results of Operations and Items Affecting Comparability	26
	Segment Results of Operations	29
	Income Taxes	32
	Liquidity and Capital Resources	32
	Environmental Liabilities and Expenditures	33
	Lawsuits, Claims, Commitments and Contingencies	33
Item 3. Quantitative and Qualitative Disclosures About Market Risk		33
Item 4. Controls and Procedures		33
Part II - Other Information
Item 1. Legal Proceedings		34
Item 1A. Risk Factors		34
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		34
Item 6. Exhibits		35

1

ABBREVIATIONS USED WITHIN THIS DOCUMENT    

$/Bbl	price per barrel
Anadarko	Anadarko Petroleum Corporation and its consolidated subsidiaries
Andes	Andes Petroleum Ecuador Ltd.
AOC	Administrative Order on Consent
Bcf	billions of cubic feet
Berkshire Hathaway	Berkshire Hathaway Inc
Boe	barrels of oil equivalent
CERCLA	Comprehensive Environmental Response, Compensation, and Liability Act
CO2	carbon dioxide
DASS	Diamond Alkali Superfund Site
District Court	Federal District Court in the State of New Jersey
DSCC	Diamond Alkali Chemicals Company
DOJ	U.S. Department of Justice
EPA	U.S. Environmental Protection Agency
EPS	earnings per share
LIFO	last-in, first-out
Maxus	Maxus Energy Corporation
Mbbl	thousands of barrels
Mboe	thousands of barrels equivalent
Mboe/d	thousands of barrels equivalent per day
Mcf	thousand cubic feet
MMbbl	millions of barrels
MMcf	millions of cubic feet
NGL	natural gas liquids
NPL	National Priorities List
Occidental	Occidental Petroleum Corporation, a Delaware corporation and one or more entities in which it owns a controlling interest (subsidiaries)
OEPC	Occidental Exploration and Production Company
OPEC	Organization of the Petroleum Exporting Countries
OU	Operable Unit
OU4 UAO	Operable Unit 4 Unilateral Administrative Order
OxyChem	Occidental Chemical Corporation
PVC	polyvinyl chloride
RCF	revolving credit facility
Repsol	Repsol, S.A.
ROD	Record of Decision
WES	Western Midstream Partners, LP
WES Operating	Western Midstream Operating, LP
WTI	West Texas Intermediate
YPF	YPF S.A.
Zero Coupons	Zero Coupon senior notes due 2036
2022 Form 10-K	Occidental’s Annual Report on Form 10-K for the year ended December 31, 2022, including any amendments thereto

2

PART I    FINANCIAL INFORMATION

Item 1. Financial Statements (unaudited)

Consolidated Condensed Balance Sheets Occidental Petroleum Corporation and Subsidiaries

millions	March 31, 2023		December 31, 2022
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	1,165	$	984
Trade receivables, net of reserves of $33 million in 2023 and $37 million in 2022	3,272		4,281
Inventories	2,311		2,059
Other current assets	1,394		1,562
Total current assets	8,142		8,886
INVESTMENTS IN UNCONSOLIDATED ENTITIES	3,161		3,176
PROPERTY, PLANT AND EQUIPMENT
Oil and gas	105,679		104,487
Chemical	7,851		7,808
Midstream and marketing	7,691		7,550
Corporate	905		889
Gross property, plant and equipment	122,126		120,734
Accumulated depreciation, depletion and amortization	(63,957)		(62,350)
Net property, plant and equipment	58,169		58,384
OPERATING LEASE ASSETS	852		903
LONG-TERM RECEIVABLES AND OTHER ASSETS, NET	1,276		1,260
TOTAL ASSETS	$	71,600	$	72,609
The accompanying notes are an integral part of these Consolidated Condensed Financial Statements.

3

Consolidated Condensed Balance Sheets Occidental Petroleum Corporation and Subsidiaries

millions, except share and per-share amounts	March 31, 2023		December 31, 2022
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt (a)	$	139	$	165
Preferred stock redemption payable	712		—
Current operating lease liabilities	287		273
Accounts payable	3,514		4,029
Accrued liabilities	2,788		3,290
Total current liabilities	7,440		7,757
LONG-TERM DEBT, NET (b)	19,645		19,670
DEFERRED CREDITS AND OTHER LIABILITIES
Deferred income taxes, net	5,527		5,512
Asset retirement obligations	3,618		3,636
Pension and postretirement obligations	977		1,055
Environmental remediation liabilities	890		905
Operating lease liabilities	595		657
Other	3,349		3,332
Total deferred credits and other liabilities	14,956		15,097
STOCKHOLDERS' EQUITY
Preferred stock, at $1.00 per share par value (93,532 shares as of March 31, 2023 and 100,000 as of December 31, 2022)(c)	9,130		9,762
Common stock, at $0.20 per share par value, authorized shares: 1.5 billion, issued shares: 2023 — 1,102,716,163 shares and 2022 — 1,098,512,626 shares	221		220
Treasury stock: 2023 — 211,164,919 shares and 2022 — 198,653,682 shares	(14,524)		(13,772)
Additional paid-in capital	17,159		17,181
Retained earnings	17,318		16,499
Accumulated other comprehensive income	255		195
Total stockholders' equity	29,559		30,085
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	71,600	$	72,609

(a)    Included $139 million and $143 million of current finance lease liabilities as of March 31, 2023 and December 31, 2022, respectively.

(b)    Included $540 million and $546 million of finance lease liabilities as of March 31, 2023 and December 31, 2022, respectively.

(c)    Reduced for obligated redemptions. See Note 9 - Earnings Per Share and Stockholders' Equity in the notes to the Consolidated Condensed Financial Statements in Part I, Item 1 of this Form 10-Q.

The accompanying notes are an integral part of these Consolidated Condensed Financial Statements.

4

Consolidated Condensed Statements of Operations Occidental Petroleum Corporation and Subsidiaries

	Three months ended March 31,
millions, except per-share amounts	2023		2022
REVENUES AND OTHER INCOME
Net sales	$	7,225	$	8,349
Interest, dividends and other income	29		49
Gains on sales of assets, net	4		135
Total	7,258		8,533
COSTS AND OTHER DEDUCTIONS
Oil and gas operating expense	1,081		864
Transportation and gathering expense	384		347
Chemical and midstream cost of sales	745		818
Purchased commodities	498		811
Selling, general and administrative expenses	241		196
Other operating and non-operating expense	308		299
Taxes other than on income	306		335
Depreciation, depletion and amortization	1,721		1,643
Anadarko acquisition-related costs	—		65
Exploration expense	102		25
Interest and debt expense, net	238		371
Total	5,624		5,774
Income before income taxes and other items	1,634		2,759
OTHER ITEMS
Gains on interest rate swaps, net	—		135
Income from equity investments and other	100		189
Total	100		324
Income before income taxes	1,734		3,083
Income tax (expense) benefit	(471)		1,793
NET INCOME	1,263		4,876
Less: Preferred stock dividends and redemption premiums	(280)		(200)
NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS	$	983	$	4,676
PER COMMON SHARE
Net income attributable to common stockholders—basic	$	1.08	$	4.96
Net income attributable to common stockholders—diluted	$	1.00	$	4.65
The accompanying notes are an integral part of these Consolidated Condensed Financial Statements.

5

Consolidated Condensed Statements of Comprehensive Income (Loss) Occidental Petroleum Corporation and Subsidiaries

	Three months ended March 31,
millions	2023		2022
Net income	$	1,263	$	4,876
Other comprehensive income (loss) items:
Gains on derivatives (a)	63		27
Pension and postretirement gains (losses) (b)	(5)		1
Other	2		—
Other comprehensive income, net of tax	60		28
Comprehensive income attributable to preferred and common stockholders	$	1,323	$	4,904

(a)     Net of tax expense of zero and $8 million for the three months ended March 31, 2023 and 2022, respectively.

(b)     Net of tax benefit of $1 million and zero for the three months ended March 31, 2023 and 2022, respectively.

The accompanying notes are an integral part of these Consolidated Condensed Financial Statements.

6

Consolidated Condensed Statements of Cash Flows Occidental Petroleum Corporation and Subsidiaries

	Three months ended March 31,
millions	2023		2022
CASH FLOW FROM OPERATING ACTIVITIES
Net income	$	1,263	$	4,876
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion and amortization of assets	1,721		1,643
Deferred income tax provision (benefit)	17		(2,240)
Gains on sales of assets, net	(4)		(135)
Noncash charges to income and other	156		34
Changes in operating assets and liabilities:
Decrease (increase) in receivables	1,010		(1,238)
(Increase) decrease in inventories	(248)		439
Increase in other current assets	(122)		(158)
Decrease in accounts payable and accrued liabilities	(1,174)		(187)
Increase in current domestic and foreign income taxes	251		205
Net cash provided by operating activities	2,870		3,239
CASH FLOW FROM INVESTING ACTIVITIES
Capital expenditures	(1,461)		(858)
Change in capital accrual	(20)		(39)
Purchases of businesses and assets, net	(151)		(29)
Proceeds from sales of assets, net	54		267
Equity investments and other, net	(20)		(3)
Net cash used by investing activities	(1,598)		(662)
CASH FLOW FROM FINANCING ACTIVITIES
Payments of long-term debt	(22)		(3,259)
Proceeds from issuance of common stock	30		27
Purchases of treasury stock	(732)		(36)
Cash dividends paid on common and preferred stock	(320)		(216)
Financing portion of net cash received for derivative instruments	—		79
Other financing, net	(36)		(24)
Net cash used by financing activities	(1,080)		(3,429)
Increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents	192		(852)
Cash, cash equivalents, restricted cash and restricted cash equivalents — beginning of period	1,026		2,803
Cash, cash equivalents, restricted cash and restricted cash equivalents — end of period	$	1,218	$	1,951
The accompanying notes are an integral part of these Consolidated Condensed Financial Statements.

7

Consolidated Condensed Statements of Equity Occidental Petroleum Corporation and Subsidiaries

			Equity Attributable to Common Stock
millions, except per-share amounts	Preferred Stock		Common Stock		Treasury Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total Equity
Balance as of December 31, 2021	$	9,762	$	217	$	(10,673)	$	16,749	$	4,480	$	(208)	$	20,327
Net income	—		—		—		—		4,876		—		4,876
Other comprehensive income, net of tax	—		—		—		—		—		28		28
Dividends on common stock,   $0.13 per share	—		—		—		—		(124)		—		(124)
Dividends on preferred stock,   $2,000 per share	—		—		—		—		(200)		—		(200)
Shareholder warrants exercised	—		—		—		20		—		—		20
Options exercised	—		—		—		7		—		—		7
Issuance of common stock and   other, net of cancellations	—		—		—		9		—		—		9
Purchases of treasury stock	—		—		(36)		—		—		—		$	(36)
Balance as of March 31, 2022	$	9,762	$	217	$	(10,709)	$	16,785	$	9,032	$	(180)	$	24,907

			Equity Attributable to Common Stock
millions, except per-share amounts	Preferred Stock		Common Stock		Treasury Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income		Total Equity
Balance as of December 31, 2022	$	9,762	$	220	$	(13,772)	$	17,181	$	16,499	$	195	$	30,085
Net income	—		—		—		—		1,263		—		1,263
Other comprehensive income, net   of tax	—		—		—		—		—		60		60
Dividends on common stock,   $0.18 per share	—		—		—		—		(164)		—		(164)
Dividends on preferred stock,   $2,000 per share	—		—		—		—		(200)		—		(200)
Preferred stock redemption - face   value	(647)		—		—		—		—		—		(647)
Preferred stock redemption -   premium	—		—		—		—		(65)		—		(65)
Preferred stock redemption value in   excess of carrying value	15		—		—		—		(15)		—		—
Shareholder warrants exercised	—		—		—		2		—		—		2
Options exercised	—		—		—		7		—		—		7
Issuance of common stock and   other, net of cancellations	—		1		—		(31)		—		—		(30)
Purchases of treasury stock	—		—		(752)		—		—		—		(752)
Balance as of March 31, 2023	$	9,130	$	221	$	(14,524)	$	17,159	$	17,318	$	255	$	29,559

The accompanying notes are an integral part of these Consolidated Condensed Financial Statements.

8

Notes to Consolidated Condensed Financial Statements Occidental Petroleum Corporation and Subsidiaries

NOTE 1 - GENERAL

NATURE OF OPERATIONS

Occidental conducts its operations through various subsidiaries and affiliates. Occidental has made its disclosures in accordance with United States generally accepted accounting principles as they apply to interim reporting, and condensed or omitted, as permitted by the U.S. Securities and Exchange Commission’s rules and regulations, certain information and disclosures normally included in Consolidated Financial Statements and the notes thereto. These unaudited Consolidated Condensed Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and the notes thereto in the 2022 Form 10-K.

In the opinion of Occidental’s management, the accompanying unaudited Consolidated Condensed Financial Statements in this report reflect all adjustments (consisting of normal recurring adjustments) that are necessary to fairly present Occidental’s results of operations and cash flows for the three months ended March 31, 2023 and 2022 and Occidental’s financial position as of March 31, 2023 and December 31, 2022. The income and cash flows for the periods ended March 31, 2023 and 2022 are not necessarily indicative of the income or cash flows to be expected for the full year.

CASH EQUIVALENTS AND RESTRICTED CASH EQUIVALENTS

Occidental considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents or restricted cash equivalents. The cash equivalents and restricted cash equivalents balances for the periods presented included investments in government money market funds in which the carrying value approximates fair value.

The following table provides a reconciliation of cash, cash equivalents, restricted cash and restricted cash equivalents as reported in the Consolidated Condensed Statements of Cash Flows as of March 31, 2023 and 2022:

	As of March 31,
millions	2023		2022
Cash and cash equivalents	$	1,165	$	1,909
Restricted cash and restricted cash equivalents included in other current assets	36		25
Restricted cash and restricted cash equivalents included in long-term receivables and other assets, net	17		17
Cash, cash equivalents, restricted cash and restricted cash equivalents	$	1,218	$	1,951

SUPPLEMENTAL CASH FLOW INFORMATION

The following table represents U.S. federal, domestic, state and international income taxes paid, tax refunds received and interest paid during the three months ended March 31, 2023 and 2022, respectively:

	Three months ended March 31,
millions	2023		2022
Income tax payments	$	164	$	208
Income tax refunds received	$	—	$	70
Interest paid (a)	$	410	$	598

(a)    Net of capitalized interest of $19 million and $11 million for the three months ended March 31, 2023 and 2022, respectively.

WES INVESTMENT

As of March 31, 2023, Occidental owned all of the 2.3% non-voting general partner interest and 49.5% of the limited partner units in WES. On a combined basis, with its 2% non-voting limited partner interest in WES Operating, Occidental's total effective economic interest in WES and its subsidiaries was 51.6%.

9

NOTE 2 - REVENUE

Revenue from customers is recognized when obligations under the terms of a contract with our customers are satisfied; this generally occurs with the delivery of oil, NGL, gas, chemicals or services, such as transportation. As of March 31, 2023, trade receivables, net of $3.3 billion represent rights to payment for which Occidental has satisfied its obligations under a contract and its right to payment is conditioned only on the passage of time.

The following table shows a reconciliation of revenue from customers to total net sales for the three months ended March 31, 2023 and 2022:

	Three months ended March 31,
millions	2023		2022
Revenue from customers	$	7,115	$	8,213
All other revenues (a)	110		136
Net sales	$	7,225	$	8,349

(a)    Includes net marketing derivatives and chemical exchange contracts.

DISAGGREGATION OF REVENUE FROM CONTRACTS WITH CUSTOMERS

The table below presents Occidental's revenue from customers by segment, product and geographical area. The oil and gas segment typically sells its oil, NGL and gas at the lease or concession area. Chemical segment revenues are shown by geographic area based on the location of the sale. Excluding net marketing revenue, midstream and marketing segment revenues are shown by the location of sale:

millions	United States		International		Eliminations		Total
Three months ended March 31, 2023
Oil and gas
Oil	$	3,650	$	718	$	—	$	4,368
NGL	460		85		—		545
Gas	355		72		—		427
Other	(16)		1		—		(15)
Segment total	$	4,449	$	876	$	—	$	5,325
Chemical	$	1,308	$	94	$	—	$	1,402
Midstream and marketing	$	540	$	104	$	—	$	644
Eliminations	$	—	$	—	$	(256)	$	(256)
Consolidated	$	6,297	$	1,074	$	(256)	$	7,115
millions	United States		International		Eliminations		Total
Three months ended March 31, 2022
Oil and gas
Oil	$	4,048	$	751	$	—	$	4,799
NGL	698		62		—		760
Gas	455		58		—		513
Other	2		1		—		3
Segment total	$	5,203	$	872	$	—	$	6,075
Chemical	$	1,602	$	81	$	—	$	1,683
Midstream and marketing	$	648	$	99	$	—	$	747
Eliminations	$	—	$	—	$	(292)	$	(292)
Consolidated	$	7,453	$	1,052	$	(292)	$	8,213

10

NOTE 3 - INVENTORIES

Finished goods primarily represent oil, which is carried at the lower of weighted-average cost or net realizable value, and caustic soda and chlorine, which are valued under the LIFO method. Inventories consisted of the following:

millions	March 31, 2023		December 31, 2022
Raw materials	$	125	$	120
Materials and supplies	958		913
Commodity inventory and finished goods	1,349		1,147
	2,432		2,180
Revaluation to LIFO	(121)		(121)
Total	$	2,311	$	2,059

NOTE 4 - LONG-TERM DEBT

As of March 31, 2023 and December 31, 2022, Occidental’s debt consisted of the following:

millions	March 31, 2023		December 31, 2022
8.750% medium-term notes due 2023	$	—	$	22
2.900% senior notes due 2024	654		654
6.950% senior notes due 2024	291		291
3.450% senior notes due 2024	111		111
5.875% senior notes due 2025	606		606
3.500% senior notes due 2025	137		137
5.500% senior notes due 2025	465		465
5.550% senior notes due 2026	870		870
3.200% senior notes due 2026	182		182
3.400% senior notes due 2026	284		284
7.500% debentures due 2026	112		112
8.500% senior notes due 2027	489		489
3.000% senior notes due 2027	216		216
7.125% debentures due 2027	150		150
7.000% debentures due 2027	48		48
6.625% debentures due 2028	14		14
7.150% debentures due 2028	232		232
7.200% senior debentures due 2028	82		82
6.375% senior notes due 2028	578		578
7.200% debentures due 2029	135		135
7.950% debentures due 2029	116		116
8.450% senior notes due 2029	116		116
3.500% senior notes due 2029	286		286
Variable rate bonds due 2030 (5.480% and 5.320% as of March 31, 2023 and December 31, 2022, respectively)	68		68
8.875% senior notes due 2030	1,000		1,000
(continued on next page)

11

millions (continued)	2023		2022
6.625% senior notes due 2030	1,449		1,449
6.125% senior notes due 2031	1,143		1,143
7.500% senior notes due 2031	900		900
7.875% senior notes due 2031	500		500
6.450% senior notes due 2036	1,727		1,727
Zero Coupon senior notes due 2036	673		673
4.300% senior notes due 2039	247		247
7.950% senior notes due 2039	325		325
6.200% senior notes due 2040	737		737
4.500% senior notes due 2044	191		191
4.625% senior notes due 2045	296		296
6.600% senior notes due 2046	1,117		1,117
4.400% senior notes due 2046	424		424
4.100% senior notes due 2047	258		258
4.200% senior notes due 2048	304		304
4.400% senior notes due 2049	280		280
7.730% debentures due 2096	58		58
7.500% debentures due 2096	60		60
7.250% debentures due 2096	5		5
Total borrowings at face value	$	17,936	$	17,958

The following table summarizes Occidental's outstanding debt, including finance lease liabilities:

millions	March 31, 2023		December 31, 2022
Total borrowings at face value	$	17,936	$	17,958
Adjustments to book value:
Unamortized premium, net	1,239		1,261
Debt issuance costs	(70)		(73)
Net book value of debt	$	19,105	$	19,146
Long-term finance leases	540		546
Current finance leases	139		143
Total debt and finance leases	$	19,784	$	19,835
Less: current maturities of financing leases	(139)		(143)
Less: current maturities of long-term debt	—		(22)
Long-term debt, net	$	19,645	$	19,670

DEBT ACTIVITY

In the first quarter of 2023, Occidental used cash on hand to repay $22 million of its 8.750% medium-term notes upon maturity. Occidental has no remaining debt maturities in 2023.

FAIR VALUE OF DEBT

The estimated fair value of Occidental’s debt as of March 31, 2023 and December 31, 2022, substantially all of which was classified as Level 1, was approximately $17.9 billion and $17.6 billion, respectively.

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NOTE 5 - DERIVATIVES

OBJECTIVE AND STRATEGY

Occidental enters into derivative financial instruments for trading purposes. Derivatives are carried at fair value and on a net basis when a legal right of offset exists with the same counterparty. Occidental may occasionally use a variety of derivative financial instruments and physical contracts to manage its exposure to commodity price fluctuations, foreign currency fluctuations, interest rate risks and transportation commitments and to fix margins on the future sale of stored commodity volumes.

Occidental may elect normal purchases and normal sales exclusions when physically delivered commodities are purchased or sold to a customer. Occidental occasionally applies cash flow hedge accounting treatment to derivative financial instruments to lock in margins on the forecasted sales of its natural gas storage volumes, and at times for other strategies, such as to lock in rates on debt issuances. The value of cash flow hedges was insignificant for all periods presented.

DERIVATIVES NOT DESIGNATED AS HEDGING INSTRUMENTS

As of March 31, 2023, Occidental’s derivatives not designated as hedges consisted of marketing derivatives. Occidental retired all remaining outstanding interest rate swaps in the twelve months ended December 31, 2022.

Derivative instruments that are not designated as hedging instruments are required to be recorded on the balance sheet at fair value. Changes in fair value will impact Occidental’s earnings through mark-to-market adjustments until the physical commodity is delivered or the financial instrument is settled.

MARKETING DERIVATIVES

Occidental's marketing derivative instruments not designated as hedges are short-duration physical and financial forward contracts. As of March 31, 2023, the weighted-average settlement price of these forward contracts was $77.70 per barrel and $2.12 per Mcf for crude oil and natural gas, respectively. The weighted-average settlement price was $81.37 per barrel and $7.89 per Mcf for crude oil and natural gas, respectively, as of December 31, 2022. Net gains and losses associated with marketing derivative instruments not designated as hedging instruments are recognized currently in net sales.

The following table summarizes net short volumes associated with the outstanding marketing commodity derivatives not designated as hedging instruments:

long (short)	March 31, 2023	December 31, 2022
Oil commodity contracts
Volume (MMbbl)	(34)	(33)
Natural gas commodity contracts
Volume (Bcf)	(143)	(112)

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FAIR VALUE OF DERIVATIVES

The following tables present the fair values of Occidental’s outstanding derivatives. Fair values are presented at gross amounts below, including when the derivatives are subject to netting arrangements, and are presented on a net basis in the Consolidated Condensed Balance Sheets:

millions	Fair Value Measurements Using						Netting (a)		Total Fair Value
Balance Sheet Classifications	Level 1		Level 2		Level 3
March 31, 2023
Marketing Derivatives
Other current assets	$	1,025	$	99	$	—	$	(1,090)	$	34
Long-term receivables and other assets, net	9		2		—		(9)		2
Accrued liabilities	(1,035)		(87)		—		1,090		(32)
Deferred credits and other liabilities - other	(9)		—		—		9		—
December 31, 2022
Marketing Derivatives
Other current assets	$	920	$	127	$	—	$	(980)	$	67
Long-term receivables and other assets, net	1		2		—		(1)		2
Accrued liabilities	(938)		(96)		—		980		(54)
Deferred credits and other liabilities - other	(1)		(1)		—		2		—

(a)These amounts do not include collateral. Occidental netted $3 million of collateral deposited with brokers against derivative liabilities related to marketing derivatives as of March 31, 2023 and netted $15 million of collateral deposited with brokers against derivative liabilities related to marketing derivatives as of December 31, 2022.

GAINS AND LOSSES ON DERIVATIVES

The following table presents net gains related to Occidental's derivative instruments on the Consolidated Condensed Statements of Operations:

millions	Three months ended March 31,
Income Statement Classification	2023		2022
Interest Rate Swaps
Gains on interest rate swaps, net (a)	$	—	$	135
Marketing Derivatives
Net sales (b)	$	107	$	135

(a)     Occidental retired all remaining outstanding interest rate swaps in the twelve months ended December 31, 2022.

(b)     Includes derivative and non-derivative marketing activity.

CREDIT RISK

Certain of Occidental's over-the-counter derivative instruments contain credit-risk-contingent features, primarily tied to credit ratings for Occidental or its counterparties, which may affect the amount of collateral that each party would need to post. The aggregate fair value of derivative instruments with credit-risk-related contingent features for which a net liability position existed as of March 31, 2023 was $9 million. The aggregate fair value of derivative instruments with credit-risk-contingent features for which a net liability position existed as of December 31, 2022 was $18 million.

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NOTE 6 - INCOME TAXES

The following table summarizes components of income tax expense for the three months ended March 31, 2023 and 2022:

	Three months ended March 31,
millions	2023		2022
Income before income taxes	$	1,734	$	3,083
Current
Federal	(265)		(215)
State and Local	(18)		(34)
Foreign	(171)		(198)
Total current tax expense	$	(454)	$	(447)
Deferred