Sunil Mathew
Senior Vice President and Chief Financial Officer at Occidental Petroleum
Thank you, Vicki.
We are excited with the recent progress we have made in executing the portfolio high-grading plan we outlined in December. OXY has realized an immediate announcement of our U.S. onshore portfolio with low breakeven inventory and expansion of free cash flow generation potential upon the closing of CrownRock last week.
The opportunity to build scale in the Midland Basin made this transaction a strategic fit for OXY, and the newly acquired assets will immediately compete for capital. In late July, we issued $5 billion of senior unsecured notes. We used the net proceeds of the offering and term loans to fund the cash consideration of the CrownRock acquisition. Overall, we were highly pleased with the investor demand for the bond offering. We placed notes maturing in five tranches at 3, 5, long 7, 10 and 30 years at a weighted average coupon rate of less than 5.5%, creating a manageable debt maturity profile given our deleveraging plans.
Our efforts to strengthen our balance sheet remain a top priority, and we are achieving early success in debt reduction. In July, we retired $400 million of debt at maturity, and our strong organic free cash flow is enabling further deleveraging progress in the coming weeks. By the end of August, between additional OXY maturities and the early redemption of CrownRock's notes we will have repaid an additional $1.9 billion of debt, bringing the total to $2.3 billion. Add to this, the proceeds from the Barilla Draw divestiture and we expect to have repaid over $3 billion in debt by the end of the third quarter, which is almost 70% of our near-term reduction commitment of $4.5 billion. We will continue to prudently advance deleveraging via free cash flow and proceeds from our divestiture program.
We were pleased last week to announce the agreement to sell certain Delaware Basin assets for approximately $818 million. The core of this divestiture centers around approximately 27,500 net acres in the Barilla Draw field of the Texas Delaware basin. While these assets have been core to OXY's Southern Delaware position for over a decade, the remaining inventory is long outdated in our current development plans. We anticipate closing the sale late in the third quarter and estimate a 15,000 BOE per day reduction in fourth quarter Permian production.
Separate from this transaction, we also announced additional completed disposal ships from earlier in the year, involving several smaller undeveloped acreage positions throughout the Permian, approximately $152 million in total. This brings total year-to-date closed or announced divestments to $970 million. Consistent with our cash flow priorities, all net proceeds from these sales will be allocated to debt reduction.
We are satisfied with the progress of our divestiture program and the trajectory of debt reduction plans. We are ahead of schedule on our near-term debt reduction commitments, and we will continue to focus on strengthening our balance sheet through a combination of divestitures and excess cash flow until we reach our principal debt target of $15 billion or less. In the second quarter, we generated both an adjusted and reported profit of $1.03 per diluted share and exited the second quarter with $1.8 billion of unrestricted cash.
As Vicki highlighted earlier, we generated over $1.3 billion of free cash flow before working capital, driven by sustained success across our diversified business segments. More specifically, the second quarter was marked by strong production performance in the Permian and Gulf of Mexico, driving high oil volumes. In the Midstream segment, substantial value capture was realized, particularly in gas marketing as evident through the greater than $180 million adjusted pretax income outperformance when compared to the midpoint of guidance. We are delighted with how operational excellence drove financial results in the second quarter and continue to benefit from a complementary asset base that positions us for success through a wide range of pricing environments.
Our second quarter capital was largely in line with the first quarter, consistent with our business plan of a front half AV and domestic oil and gas activity. We reported a negative working capital change in the second quarter, primarily due to higher oil volumes and increased barrel shipments on the water at quarter end. Rockies-related property tax payments, which are based on a two-year revenue lag and incorporates a period of higher oil and natural gas prices from 2022 also played a contributing factor.
Now looking ahead to the second half of 2024. We have provided pro forma guidance based upon the following assumptions. We included CrownRock in our guidance beginning August 1, and we excluded from guidance the 15,000 BOE per day of 4Q production associated with the Permian divestment as we expect the transaction to close late in the third quarter. Even after adjusting for this disposition, OXY's total and Permian full year production, excluding CrownRock, is expected to remain flat due to higher Permian outlook. Including CrownRock, the midpoint of our total company production and guidance has increased from 1.25 million to approximately 1.32 million BOE per day.
Building on the operational momentum generated in the first and second quarters, we anticipate an improving production trajectory in the back half of the year in all our domestic assets. This includes the Gulf of Mexico even after incorporating some downtime for potential disruptive tropical weather in our guidance. Excluding CrownRock, the midpoint of our 3Q production guidance would represent a new record for the highest quarterly production in over 4 years.
In the appendix, we have summarized some of the key full year guidance changes associated with consolidating CrownRock into our portfolio. Aside from the production benefits, we anticipate a notable improvement in domestic operating costs from adding these high-margin barrels. Excluding CrownRock, we are also pleased with OXY's improvement and favorable trajectory of operating costs and capital efficiency across our U.S. onshore assets, as highlighted by Vicki earlier.
OxyChem's 2024 business is performing well. with results largely in line with the plan we laid out at the start of the year. However, challenging economic conditions in China, combined with the continued deferral of interest rate reductions have dampened OxyChem's trajectory for the year. As a result, we are revising OxyChem's full year guidance down to a range of $1 billion to $1.1 billion. We continue to anticipate that 2024 will be another strong year for OxyChem by historical standards.
With midstream and marketing strong second quarter, we have raised full year guidance by $220 million. We anticipate a more muted third quarter as additional Permian gas takeaway capacity is expected to come online, reducing gas marketing optimization opportunities. We continued to execute our 2024 capital program as scheduled. While the legacy OXY capital will decrease in the second half as a result of tapered domestic activity, maintaining CrownRock's 5-rig program will reshape the investment profile as we increase the full year total company net capital range to $6.8 billion to $7 billion.
In closing, I want to discuss how OXY is delivering on the financial milestones we laid out in December. A sustainable and growing dividend is the foundation of our shareholder return priorities. Earlier this year, we followed through on a commitment we made when we announced the CrownRock acquisition and raised our quarterly common dividend by over 22%. The free cash flow accretion that we anticipate from CrownRock along with the expected improvements from our non-oil and gas segments of our portfolio provided us with the confidence to raise the dividend.
Maintaining our investment-grade credit rating is a key priority. In recent weeks, we received ratings affirmations from all three rating agencies, including our investment-grade credit ratings from Moody's and Fitch. We are focused on our deleveraging strategy, and we remain on track to retire at least $4.5 billion of debt well before next August.
We are off to a promising start with our divestiture program. We will continue to evaluate our high-quality asset portfolio for divestment opportunities and will apply those proceeds to further debt reduction, thereby strengthening our balance sheet. OXY is methodically delivering on these key financial commitments. The strategic and financial actions we have taken over recent quarters are converging to benefit our portfolio, increase cash flow generation capability and ultimately, accelerate shareholder value.
I will now turn the call back over to Vicki.
