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Howard Weil 40th Annual Energy Conference – Occidental Petroleum Corp

Occidental Petroleum Corp · Mar 27, 2012 · 37 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. Howard Weil 40th Annual Energy Conference – Occidental Petroleum Corp – slide 1
    Occidental Petroleum Corporation Howard Weil 40th Annual Energy Conference Stephen I. Chazen President and Chief Executive Officer March 27, 2012
  2. Howard Weil 40th Annual Energy Conference – Occidental Petroleum Corp – slide 2
    Full Year 2011 Results Summary ( in millions, except EPS data) FY 2011 FY 2010 Core Results 6,828 4,664 Core EPS (diluted) 8.39 5.72 Net Income 6,771 4,530 Reported EPS (diluted) 8.32 5.56 Oil and Gas production volumes 733 706…
  3. Howard Weil 40th Annual 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. Howard Weil 40th Annual Energy Conference – Occidental Petroleum Corp – slide 4
    Oxys Three Main Performance Criteria Production Growth, Returns & Dividend Growth We finished a strong year in terms of the three main performance criteria outlined last quarter. Our domestic oil and gas production grew by about…
  5. Howard Weil 40th Annual Energy Conference – Occidental Petroleum Corp – slide 5
    Return on Assets (2007 2011) Net Income Return on Assets 5 Year Average U.S. 14% International 37% Total E&P 20% Cash Flow* Return on Assets 5 Year Average U.S. 21% International 54% Total E&P 29% * Net Income + DD&A See…
  6. Howard Weil 40th Annual Energy Conference – Occidental Petroleum Corp – slide 6
    Consistent 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 2011 was…
  7. Howard Weil 40th Annual Energy Conference – Occidental Petroleum Corp – slide 7
    Consistent Dividend Growth (/share) 11.95 12.00 9.79 10.00 7.95 8.00 6.48 6.00 5.17 3.96 4.00 3.02 2.22 2.16 1.57 1.47 1.84 2.00 1.02 1.21 1.31 0.80 0.94 0.55 0.65 0.500.50 0.52 0.00 2002 2003 2004 2005 2006 2007…
  8. Howard Weil 40th Annual 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. Howard Weil 40th Annual Energy Conference – Occidental Petroleum Corp – slide 9
    Oil & Gas Production 1Q12 Outlook During our 4Q11 earnings conference call held in late January, we indicated: At current prices, total 1Q12 sales volumes to be comparable to 4Q11 volumes of 749 mboe/d, depending on the scheduling of…
  10. Howard Weil 40th Annual Energy Conference – Occidental Petroleum Corp – slide 10
    Oxy Is Primarily An Oil Company Oil & Gas Production * Full Year 2011 (Million barrels of oil equivalent) *Excludes Argentina 10
  11. Howard Weil 40th Annual Energy Conference – Occidental Petroleum Corp – slide 11
    Realized Oil 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 109% of WTI and 94% of Brent in 2011. In Oman our average…
  12. Howard Weil 40th Annual Energy Conference – Occidental Petroleum Corp – slide 12
    Capital Spending 2012 Outlook We have ample legitimate opportunities in our domestic oil and gas business where we could deploy capital. We try to manage the program to a level that is realistic at current price levels, and as a…
  13. Howard Weil 40th Annual Energy Conference – Occidental Petroleum Corp – slide 13
    Capital Spending 2012E vs. 2011 Actual We increased our capital program approximately 10% in 2012 to 8.3 billion from the 7.5 billion spent in 2011. About 500 million of this increase will be in the US, mainly in the Permian basin,…
  14. Howard Weil 40th Annual Energy Conference – Occidental Petroleum Corp – slide 14
    Oil & Gas Volume Growth Drivers Base 5 8% Compounded Average Annual Growth Current California risked prospects Non-CO2 & CO2 in the Permian Williston Basin Oman Iraq Upside from Existing Holdings New California conventional and…
  15. Howard Weil 40th Annual Energy Conference – Occidental Petroleum Corp – slide 15
    US Oil & Gas Production 1H12 Outlook US oil and gas production In 1H12, we expect our domestic production to grow 3 to 4 mboe/d each month from the current quarterly average of 449 mboe/d, which would correspond to a 6 to 8 mboe/d…
  16. Howard Weil 40th Annual Energy Conference – Occidental Petroleum Corp – slide 16
    US Oil & Gas Capital and Production 1,100 463 456 449 Domestic Capital (mm) Thousand boe per day 884 436 424 704 640 403 389 403 310 259 Capital (3 quarters earlier) Production Note: 1Q12E and 2Q12E production…
  17. Howard Weil 40th Annual Energy Conference – Occidental Petroleum Corp – slide 17
    US Oil & Gas Capital and Production 10.0% 475 463 US CapEx / US Capital Employed (%) 456 449 8.0% 450 Thousand boe per day 436 424 6.0% 425 403 4.0% 4.0% 3.3% 400 389 3.0% 2.8% 1.7% 2.1% 2.0% 1.4% 375 0.0% 350…
  18. Howard Weil 40th Annual Energy Conference – Occidental Petroleum Corp – slide 18
    Oxys US Operated Rig Activity 72 70 Oxy Operated Domestic Rig Counts 38 Oxys US operated rigs represent approximately 6% of the total Liquids directed rigs operating in the Lower 48. 18
  19. Howard Weil 40th Annual Energy Conference – Occidental Petroleum Corp – slide 19
    California Overview Largest acreage holder in CA with 1.7 mm acres, majority of which are net mineral interests. 2011 production of 138 mboe/d. 78% interest in the Elk Hills Field the largest producer of Sacramento gas and NGLs in…
  20. Howard Weil 40th Annual Energy Conference – Occidental Petroleum Corp – slide 20
    California Capital Program We currently expect the rig count to In CA, we expect to spend about remain at 30 in 1H12, roughly the same 21% of our total capital program. as what we were running at YE-2011; We are seeing improvement…
  21. Howard Weil 40th Annual Energy Conference – Occidental Petroleum Corp – slide 21
    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…
  22. Howard Weil 40th Annual Energy Conference – Occidental Petroleum Corp – slide 22
    California Field Sizes Discovery Play High Potential Bread &…
  23. Howard Weil 40th Annual Energy Conference – Occidental Petroleum Corp – slide 23
    California Unconventional Shale Program Multi-year inventory of drill sites in CA, many of which are both outside of Elk Hills proper & the Kern County Discovery Area Expect to drill 80+ shale wells outside Elk Hills proper, and 140…
  24. Howard Weil 40th Annual Energy Conference – Occidental Petroleum Corp – slide 24
    Permian Basin Overview 2011 production of 198,000 boe/d Largest oil producer in Permian (15% net share of total) Largest operator in Permian (of 1,500+ operators) Drilled 409 wells on operated properties in 2011 64% of Oxys…
  25. Howard Weil 40th Annual Energy Conference – Occidental Petroleum Corp – slide 25
    Permian Basin Capital Program Our rig count at year-end 2011 In the Permian operations, we was 23; expect to spend about 20% of our total capital. We expect our rig count to ramp up during the year to around 27 rigs by year end;…
  26. Howard Weil 40th Annual Energy Conference – Occidental Petroleum Corp – slide 26
    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…
  27. Howard Weil 40th Annual Energy Conference – Occidental Petroleum Corp – slide 27
    Midcontinent and Other Capital Program 2011 production of 92,000 boe/d; In the Midcontinent and Other Oxy holds over 2.4 mm net acres in operations, we plan to spend about the midcontinent region; 14% of our total capital program. In…
  28. Howard Weil 40th Annual Energy Conference – Occidental Petroleum Corp – slide 28
    International Development and, Exploration Capital Program The Al Hosn gas project will continue Total international development to increase spending in 2012 as capital will be about 30% of the originally planned, making up about…
  29. Howard Weil 40th Annual Energy Conference – Occidental Petroleum Corp – slide 29
    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…
  30. Howard Weil 40th Annual Energy Conference – Occidental Petroleum Corp – slide 30
    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 Oxy assumed operation 62 September 1, 2005 at 8,500 b/d; Saudi…
  31. Howard Weil 40th Annual Energy Conference – Occidental Petroleum Corp – slide 31
    Oxy Oman Gross Production Growth Mboepd 31
  32. Howard Weil 40th Annual Energy Conference – Occidental Petroleum Corp – slide 32
    Cash Flow Priorities 1. Base/Maintenance Capital 2. Dividends 3. Growth Capital 4. Acquisitions 5. Share Repurchase 32
  33. Howard Weil 40th Annual Energy Conference – Occidental Petroleum Corp – slide 33
    Summary 2011 Cash Flow Free cash flow from continuing operations after capex and dividends, but before acquisition and debt activity, was about 3.4 billion. ( in millions) Cash Flow From Operations Shah - 500 12,300…
  34. Howard Weil 40th Annual Energy Conference – Occidental Petroleum Corp – slide 34
    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…
  35. Howard Weil 40th Annual Energy Conference – Occidental Petroleum Corp – slide 35
    Oxy Investment Attributes 5 - 8% base annual production growth over the long term Opportunity for additional volume growth Returns on invested capital significantly in excess of Companys cost of capital Consistent, annual increases…
  36. Howard Weil 40th Annual Energy Conference – Occidental Petroleum Corp – slide 36
    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…
  37. Howard Weil 40th Annual Energy Conference – Occidental Petroleum Corp – slide 37
    Occidental Petroleum Corporation 38

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