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Howard Weil 39th Annual Energy Conference – Occidental Petroleum Corp

Occidental Petroleum Corp · Mar 29, 2011 · 32 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 39th Annual Energy Conference – Occidental Petroleum Corp – slide 1
    Occidental Petroleum Corporation Howard Weil 39th Annual Energy Conference Stephen I. Chazen President and Chief Operating Officer March 29, 2011
  2. Howard Weil 39th Annual Energy Conference – Occidental Petroleum Corp – slide 2
    Full Year 2010 Results Summary ( in millions, except EPS data) FY2010 FY2009 Core Results 4,664 3,192 Core EPS (diluted) 5.72 3.92 Net Income 4,530 2,915 Reported EPS (diluted) 5.56 3.58 Oil and Gas production volumes 706 671…
  3. Howard Weil 39th 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 39th Annual Energy Conference – Occidental Petroleum Corp – slide 4
    Business Risk Factors Level of Risk Acceptable to Occidental Risk Factor Low Middle High Exploratory 9 Commodity 9 Political 9 Engineering 9 Reinvestment 9 Financial 9 4
  5. Howard Weil 39th Annual Energy Conference – Occidental Petroleum Corp – slide 5
    Adjusted 1Q11 Oil & Gas Production/Sales Guidance (thousand boe/d) Oil & Gas Oil & Gas Production Sales Previous 1Q11 Guidance 740 - 750 725 Libya & Yemen; and slower capital spending in Iraq (15) (1) Impact of weather in…
  6. Howard Weil 39th Annual Energy Conference – Occidental Petroleum Corp – slide 6
    Oil Reserves Concentrated in the U.S. (Percentage of Oxys worldwide proved oil reserves) Iraq Qatar Libya Bahrain United States MENA Oman 73% 23% Yemen California 24% Libya/Yemen/Bahrain Libya/Yemen/Bahrain Permian 4% 4%…
  7. Howard Weil 39th Annual Energy Conference – Occidental Petroleum Corp – slide 7
    Standard Measure of Discounted Future Net Cash Flows (SEC PV-10) (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…
  8. Howard Weil 39th Annual Energy Conference – Occidental Petroleum Corp – slide 8
    Worldwide Oil & Gas Producing Areas United States Libya Iraq California Qatar Permian Basin Bahrain UAE Oman Yemen Colombia Bolivia Focus Areas 8
  9. Howard Weil 39th Annual Energy Conference – Occidental Petroleum Corp – slide 9
    Capital Spending 2011 Outlook We expect capital spending for the total year 2011 to be about 6.1 billion compared to the total 2010 capital of 3.9 billion. Both amounts exclude Argentina and the Shah Field Development Project.…
  10. Howard Weil 39th Annual Energy Conference – Occidental Petroleum Corp – slide 10
    Capital Spending 2011E vs. 2010 Actual Chemicals & Chemicals & Midstream California Midstream California 20% 21% 15% 20% Exploration 7% Exploration 5% Permian Permian 13% 14% MENA MENA 27% 30% Midcontinent Midcontinent…
  11. Howard Weil 39th Annual Energy Conference – Occidental Petroleum Corp – slide 11
    Oil & Gas Volume Growth Drivers Base 5 8% Growth CO2 in Permian Current California risked prospects Recent domestic properties acquisitions (Williston Basin, South TX gas) Oman Iraq Upside from Existing Holdings New California…
  12. Howard Weil 39th Annual Energy Conference – Occidental Petroleum Corp – slide 12
    Summary of Recent Transactions (announced 12/10/10) Divestment of Oxys Argentine oil and gas operations to Sinopec for after-tax proceeds of approximately 2.6 billion Oxy purchased oil and gas properties in South Texas and North…
  13. Howard Weil 39th Annual Energy Conference – Occidental Petroleum Corp – slide 13
    Impact of Transactions These new acquisitions and the sale of Argentina will: be immediately accretive to our earnings, ROCE and cash flow after capital; provide greater certainty in achieving both our short-term and long-term…
  14. Howard Weil 39th Annual Energy Conference – Occidental Petroleum Corp – slide 14
    Oxy Shell South Texas Assets Transaction Houston 100k gross, 92.8k net acres TEXAS Production 200 mmcfe/d of Galveston gas equivalent 360+ Bcfe proven developed Lyda Lyda reserves Rosita 12 840 Bcfe of identified addl La La…
  15. Howard Weil 39th Annual Energy Conference – Occidental Petroleum Corp – slide 15
    Oxy North Dakota Assets Transaction Purchased 174,000 contiguous net acres in ND within the southern extents of the Bakken and Three Forks Formations. Operated working interests avg. 63% with avg. NRI of 83%. Net risked reserve…
  16. Howard Weil 39th Annual Energy Conference – Occidental Petroleum Corp – slide 16
    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…
  17. Howard Weil 39th Annual Energy Conference – Occidental Petroleum Corp – slide 17
    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%…
  18. Howard Weil 39th Annual Energy Conference – Occidental Petroleum Corp – slide 18
    Permian 2011 Program Summary 2011 Capital program 850 mm Plan to drill 300+ wells this year Average 13-rig program in 2011 Drilling program is front-end loaded to exploit quick production first 130+ workover/maintenance rigs…
  19. Howard Weil 39th Annual Energy Conference – Occidental Petroleum Corp – slide 19
    Typical Permian CO2 Project Cost Structure 80 70 13.00 60 4.30 9.80 50 / BOE 5.70 40 75.00 3.80 30 20 38.40 10 - lty t e l x n t ita os os u Ta gi a en ap C ar C…
  20. Howard Weil 39th Annual Energy Conference – Occidental Petroleum Corp – slide 20
    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…
  21. Howard Weil 39th Annual Energy Conference – Occidental Petroleum Corp – slide 21
    California 2011 Program Summary San Joaquin Basin 2011 Capital program 1.3 billion, up 50% vs. 2010. Plan to drill 500+ new Elk Hills development wells. Bakersfield Shifting our drilling to oil wells Buena Vista which we expect to…
  22. Howard Weil 39th Annual Energy Conference – Occidental Petroleum Corp – slide 22
    California Unconventional Shale Program Rose We have 520 geologically viable (so-called de-risked) North Shafter shale drilling locations in CA excluding traditional Elk Hills. Monument Junction Of these, 250 are both outside…
  23. Howard Weil 39th Annual Energy Conference – Occidental Petroleum Corp – slide 23
    California Shale Summary and Play Comparison 870,000 acres are within most prospective shale plays Oxys average NRI 95% Identified 15 areas to appraise (5 - 10% of total acreage) Initially target 1 to 2 areas including Kern County…
  24. Howard Weil 39th Annual Energy Conference – Occidental Petroleum Corp – slide 24
    Summary of Full Year 2010 Cash Flow Free cash flow from continuing operations after capex and dividends but before acquisition activity and debt retirements was 4.3 billion. 2,600 3,900 ( in millions) 10,300 4,925 Operating…
  25. Howard Weil 39th Annual Energy Conference – Occidental Petroleum Corp – slide 25
    Cash Flow Priorities 1. Base/Maintenance Capital 2. Dividends 3. Growth Capital 4. Acquisitions 5. Share Repurchase 25
  26. Howard Weil 39th Annual Energy Conference – Occidental Petroleum Corp – slide 26
    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…
  27. Howard Weil 39th Annual Energy Conference – Occidental Petroleum Corp – slide 27
    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…
  28. Howard Weil 39th Annual Energy Conference – Occidental Petroleum Corp – slide 28
    Dividend Growth Annual dividend to increase to 1.84 per share or 21% 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 14% 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…
  29. Howard Weil 39th Annual Energy Conference – Occidental Petroleum Corp – slide 29
    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…
  30. Howard Weil 39th Annual Energy Conference – Occidental Petroleum Corp – slide 30
    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…
  31. Howard Weil 39th Annual Energy Conference – Occidental Petroleum Corp – slide 31
    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…
  32. Howard Weil 39th Annual Energy Conference – Occidental Petroleum Corp – slide 32
    Occidental Petroleum Corporation

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