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BAML Global Energy Conference – Occidental Petroleum Corp

Occidental Petroleum Corp · Nov 15, 2011 · 43 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. BAML Global Energy Conference – Occidental Petroleum Corp – slide 1
    Occidental Petroleum Corporation Bank of America Merrill Lynch 2011 Global Energy Conference Stephen I. Chazen President and Chief Executive Officer November 15, 2011
  2. BAML Global Energy Conference – Occidental Petroleum Corp – slide 2
    First Nine Months 2011 Results Summary ( in millions, except EPS data) 9 Mos 2011 9 Mos 2010 Core Results 5,187 3,377 Core EPS (diluted) 6.37 4.14 Net Income 5,137 3,318 Reported EPS (diluted) 6.31 4.07 Oil and Gas production…
  3. BAML Global Energy Conference – Occidental Petroleum Corp – slide 3
    What Is Our Philosophy & Strategy Overriding Goal is to Maximize Total Shareholder Return We believe this can be achieved through a combination of: Growing our oil and gas production by 5 to 8% per year on average over the long…
  4. BAML Global Energy Conference – Occidental Petroleum Corp – slide 4
    Return on Assets (2006 2010) Net Income Return on Assets 5 Year Average U.S. 16% International 35% Total E&P 21% Cash Flow* Return on Assets 5 Year Average U.S. 24% International 53% Total E&P 31% * Net Income + DD&A See…
  5. BAML Global Energy Conference – Occidental Petroleum Corp – slide 5
    Finding & Development Costs per Barrel F&D Costs Actual as a % of 6:1 * Prices ** WTI Price 2010 20.25 24.18 30% 3-Year Average 16.38 20.25 25% (2008 2010) 5-Year Average 16.66 19.52 26% (2006 2010) 10-Year Average 12.22 13.48…
  6. BAML Global Energy Conference – Occidental Petroleum Corp – slide 6
    Dividend Growth Our ability to pay dividends is indicated by our free cash flow generation. Free cash flow after interest, taxes and capital spending, but before dividends, acquisitions and debt activity for the first nine months of…
  7. BAML Global Energy Conference – Occidental Petroleum Corp – slide 7
    Dividend Growth Annual dividend increased 21% to 1.84 per share, effective with the 4/15/11 payment 2.00 1.84 1.80 1.60 1.52 R C AG 1.28 1.32 1.40 15% 1.20 1.00 1.00 0.88 0.72 0.80 0.55 0.62 0.60 0.50 0.52 0.40 0.20 0.00 Prior…
  8. BAML Global Energy Conference – Occidental Petroleum Corp – slide 8
    Worldwide Oil & Gas Producing Areas United States Libya Iraq California Qatar Permian UAE Basin Bahrain Oman Yemen Colombia Bolivia Focus Areas 8
  9. BAML Global Energy Conference – Occidental Petroleum Corp – slide 9
    Geographic Value of Oxys Oil & Gas Reserves (Percentage of Oxy total company value) Iraq Qatar Libya Bahrain United States 68% MENA Oman 28% Yemen California 34%* Libya/Yemen/Bahrain Libya/Yemen/Bahrain Permian 4% 4%…
  10. BAML Global Energy Conference – Occidental Petroleum Corp – slide 10
    Realized Prices & Differentials About 60% of Oxys oil production tracks world oil prices and 40% is indexed to WTI. For example: In California our realized price was 114% of WTI and 91% of Brent in 3Q11. In Oman our average price…
  11. BAML Global Energy Conference – Occidental Petroleum Corp – slide 11
    Capital Spending 2011 Outlook We expect capital spending for the total year 2011 to be about 7.0 billion, compared to the total 2010 capital of 3.9 billion. Year to-date capital expenditures by segment were 83% in Oil and Gas, 14%…
  12. BAML Global Energy Conference – Occidental Petroleum Corp – slide 12
    Capital Spending 2011E vs. 2010 Actual Last year we provided a 2010 - 14 capital budget of 27.5 billion, with average spending of 5.5 billion per year Excluding capital for Shah project, estimated capital for 2010 - 11 of 10.4 billion…
  13. BAML Global Energy Conference – Occidental Petroleum Corp – slide 13
    Domestic Oil & Gas Production 3Q11 The impact of our capital program and increase in drilling activity has started to have a visible impact on our domestic oil and gas production volumes. Compared to 2Q11, our domestic production…
  14. BAML Global Energy Conference – Occidental Petroleum Corp – slide 14
    US Oil & Gas Capital and Production 1,000 450 rowth 443 G 436 884 900 uction 440 d Pro 800 Y -o-Y 424 430 14% 704 Domestic Capital (mm) Thousand boe per day 700 640 420 600 403 410 500 400 389 403 400 390 310 300…
  15. BAML Global Energy Conference – Occidental Petroleum Corp – slide 15
    Oxys US Operated Rig Activity 80 73 70 68 19 60 18 Oxy Operated Domestic Rig 50 Counts 38 24 40 20 5 30 13 20 30 30 10 20 0 Year-end Currently 2011 Exit 2010 Rate California Permian Midcontinent and Other 15
  16. BAML Global Energy Conference – Occidental Petroleum Corp – slide 16
    Oil & Gas Production 4Q11 Outlook We expect 4Q11 oil and gas production to be as follows: Domestic volumes are expected to increase by about 3 to 4 mboe/d per month from the 3Q11 average level of 436 mboe/d. This should result in…
  17. BAML Global Energy Conference – Occidental Petroleum Corp – slide 17
    Oil & Gas Volume Growth Drivers Base 5 8% Compounded Average Annual Growth CO2 in Permian Current California risked prospects Recent domestic properties acquisitions (Williston Basin, South TX gas) Oman Iraq Upside from Existing…
  18. BAML Global Energy Conference – Occidental Petroleum Corp – slide 18
    California Overview Largest acreage holder in CA with 1.6 mm acres, majority of which are net mineral interests. 768 mm BOE of proved reserves at year end 2010, of which 73% are oil. Sacramento 2010 production of 139 mboe/d. San…
  19. BAML Global Energy Conference – Occidental Petroleum Corp – slide 19
    California 2011 Program Summary San Joaquin Basin 2011 Capital program 1.6 billion, up 80% vs. 2010. Elk Hills Plan to drill 500+ new Bakersfield development wells. Buena Vista Shifted our drilling to oil wells which we expect to…
  20. BAML Global Energy Conference – Occidental Petroleum Corp – slide 20
    California Conventional Exploration Major Producing World Class Province Basins 35+ Billion BOE discovered 5 of top 12 U.S. oil fields 2 Billion BOE Significant Remaining Potential Large undiscovered resources Sacramento Multiple…
  21. BAML Global Energy Conference – Occidental Petroleum Corp – slide 21
    California Field Sizes Discovery Play High Potential ution Bread & Butter trib Dis Size ld…
  22. BAML Global Energy Conference – Occidental Petroleum Corp – slide 22
    California Unconventional Shale Program Rose Multi-year inventory of drill sites in CA, many of which are both outside of Elk Hills proper & the Kern County North Shafter Discovery Area Monument Junction Expect to drill 154 shale…
  23. BAML Global Energy Conference – Occidental Petroleum Corp – slide 23
    California Shale Summary and Play Comparison 870,000 acres are within most prospective shale plays; We have de-risked approx. 200,000 acres as viable for shale; Oxys average NRI 95%; Identified 15 areas to appraise (5 - 10% of total…
  24. BAML Global Energy Conference – Occidental Petroleum Corp – slide 24
    California Update We expect to drill and complete a total of 42 shale wells during 4Q11. We expect to run a 30 rig program in the state during 4Q11. Our conventional drilling program is progressing somewhat better than planned.…
  25. BAML Global Energy Conference – Occidental Petroleum Corp – slide 25
    Permian Basin Overview Approximately 1.2 billion BOE of proved reserves at year end 2010 2010 production of 197,000 boe/d Largest oil producer in Permian (16% share of total) Largest operator in Permian (of 1,500+ operators) 66%…
  26. BAML Global Energy Conference – Occidental Petroleum Corp – slide 26
    Permian 2011 Program Summary 2011 Capital program 1 billion Plan to drill 300+ wells this year Expect to run 24 rig drilling program by year-end 2011 Drilling program is front-end loaded to exploit quick production first 160+…
  27. BAML Global Energy Conference – Occidental Petroleum Corp – slide 27
    Permian EOR Opportunities Permian properties 7.8 BBO Net Remaining initially had 11.9 BBO net in place 3P Reserves 4.1 BBO have been produced, 0.8 BBO leaving 7.8 BBO net EOR Likely remaining 1.4 BBO 4.6 BBO 1.0 BBO…
  28. BAML Global Energy Conference – Occidental Petroleum Corp – slide 28
    Permian, Midcontinent & Other Update In the Permian operations: Our CO2 flood production is progressing according to plan. We expect our rig count to be about 24 in 4Q11. Our non-CO2 operations have stepped up their development…
  29. BAML Global Energy Conference – Occidental Petroleum Corp – slide 29
    Oxy North Dakota Assets Acquired 174,000 contiguous net acres within the southern extents of the ND Bakken and Three Forks Formations. Operated working interests avg. 63% with avg. NRI of 83%. Net risked reserve potential in excess…
  30. BAML Global Energy Conference – Occidental Petroleum Corp – slide 30
    Oxy North Dakota Williston Basin MONTANA NORTH DAKOTA MT ND Burke Sheridan Bottineau Divide South Coteau SD Williams Nesson Renville Anticline Roosevelt Mountrail McHenry Richland Parshall- Sanish Ward Fields Elm…
  31. BAML Global Energy Conference – Occidental Petroleum Corp – slide 31
    Oxy Qatar Oil & Gas Fields Idd El Shargi North Dome Bahrain Al Rayyan (ISND) 4 B bo ROIP Idd El Shargi South Dome (ISSD) 800 MM bo ROIP Dolphin Gas Project Al Rayyan 300 MM bo ROIP 2010 Gross Production 118 Mbopd, Net 76 Mbopd…
  32. BAML Global Energy Conference – Occidental Petroleum Corp – slide 32
    Oxy Qatar Gross Oil Production 140 Oxy operated since 1994 thousands of barrels of oil per day 120 100 80 60 previous operators 40 20 0 87 89 91 93 95 97 99 01 03 05 07 09 11 19 19 19…
  33. BAML Global Energy Conference – Occidental Petroleum Corp – slide 33
    Oxy Dolphin Project Iran Oxy share 24.5% Block 12 Al Rayyan Delivering 2.2 Bcfd to UAE Dolphin and 200 MMcfd to Oman markets Al Hawailah 48 Export Pipeline Doha 2010 Gross production 537 ISND ISSD Dubai Jebel Ali Fujayrah…
  34. BAML Global Energy Conference – Occidental Petroleum Corp – slide 34
    Oxy Oman History Oxy commenced operation of the UAE Gulf of Oman Safah field in 1984 Safah Approximately 600 wells drilled 9 Block 62 and 30+ fields discovered in 27 Muscat Blocks 9 and 27 62 Saudi Signed 30-year PSC for the…
  35. BAML Global Energy Conference – Occidental Petroleum Corp – slide 35
    Oxy Oman Gross Production Growth Mboepd 250 216 192 200 154 150 115 97 100 100 87 70 50 40 42 44 39 41 45 46 50 31 35 36 24 26 27 12 19 1 2 3 6 0 84 86 88 90 92 94 96 98 00 02 04 06 08 10…
  36. BAML Global Energy Conference – Occidental Petroleum Corp – slide 36
    Oxy Oman Mukhaizna Project World Class Steam flood project UAE Gulf of Oman 2 B bo ROIP Safah Discovered in 1975 in South Central Oman 9 Block 62 27 Muscat Cold production commenced 1992 62 Oxy assumed operation Saudi Arabia…
  37. BAML Global Energy Conference – Occidental Petroleum Corp – slide 37
    Abu Dhabi Al Hosn Gas Project (Shah Field) Shah Gas Field one of the largest in the Middle East Oxy holds a 40% participating interest under a 30-year contract The project involves development of high-sulfur content reservoirs…
  38. BAML Global Energy Conference – Occidental Petroleum Corp – slide 38
    Cash Flow Priorities 1. Base/Maintenance Capital 2. Dividends 3. Growth Capital 4. Acquisitions 5. Share Repurchase 38
  39. BAML Global Energy Conference – Occidental Petroleum Corp – slide 39
    Summary YTD 2011 Cash Flow Free cash flow from continuing operations after capex and dividends, but before acquisition and debt activity, was about 2.6 billion. 600 5,000 11,200 ( in millions) Cash Flow From Operations 8,600…
  40. BAML Global Energy Conference – Occidental Petroleum Corp – slide 40
    Acquisition Strategy Companys core business is acquiring assets that can provide future growth through improved recovery. Foreign contracts Domestic add-ons Small incremental additions to production in short term Generate returns of…
  41. BAML Global Energy Conference – Occidental Petroleum Corp – slide 41
    Oxy Investment Attributes 5 - 8% base annual production growth Opportunity for additional volume growth Returns on invested capital significantly in excess of Companys cost of capital Annual increases in dividends Significant…
  42. BAML Global Energy Conference – Occidental Petroleum Corp – slide 42
    Creating Shareholder Value Oxys Shareholder Equity versus Equity Market Value A History of Generating Shareholder Value Change in Equity Market Value Market Value per of Equity Retained ( in millions) Change in Shareholder Equity…
  43. BAML Global Energy Conference – Occidental Petroleum Corp – slide 43
    Occidental Petroleum Corporation

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