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UBS Global Oil and Gas Conference – Occidental Petroleum Corp

Occidental Petroleum Corp · May 20, 2013 · 51 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. UBS Global Oil and Gas Conference – Occidental Petroleum Corp – slide 1
    Occidental Petroleum Corporation 2013 UBS Global Oil & Gas Conference May 22, 2013 Stephen I. Chazen President and Chief Executive Officer
  2. UBS Global Oil and Gas Conference – Occidental Petroleum Corp – slide 2
    Christopher G. Stavros Vice President - Investor Relations and Treasurer 212-603-8184 chris_stavrosoxy.com Christopher M. Degner Senior Director - Investor Relations 212-603-8185 christopher_degneroxy.com Anthony J. Cottone…
  3. UBS Global Oil and Gas Conference – Occidental Petroleum Corp – slide 3
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  4. UBS Global Oil and Gas Conference – Occidental Petroleum Corp – slide 4
    Key Messages Execute on our capital program with a focus on growing our U.S. oil production. Continue to drive our effort to further reduce our oil and gas operating costs, and improve our capital and drilling efficiency with the…
  5. UBS Global Oil and Gas Conference – Occidental Petroleum Corp – slide 5
    First Quarter 2013 Results Summary ( in millions, except EPS data) 1Q 2013 1Q 2012 *Core Income from continuing operations 1,359 1,560 *Core EPS (diluted) from continuing 1.69 1.92 operations Reported Net Income 1,355 1,559…
  6. UBS Global Oil and Gas Conference – Occidental Petroleum Corp – slide 6
    First Quarter 2013 Cash Flow In 1Q13, we generated 2.9 billion of cash flow from operations before changes in working capital. Working capital changes reduced our cash flow from operations by approximately 200 million to 2.7 billion.…
  7. UBS Global Oil and Gas Conference – Occidental Petroleum Corp – slide 7
    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…
  8. UBS Global Oil and Gas Conference – Occidental Petroleum Corp – slide 8
    Oxy Is Primarily a Domestic Oil Producer Oil & Gas Production First Quarter 2013 (Million barrels of oil equivalent) 19 26 28% 42 38% 43 8 61% 62% 11% Oil NGLs Gas U.S. International 8
  9. UBS Global Oil and Gas Conference – Occidental Petroleum Corp – slide 9
    Cash Flow Priorities 1. Base/Maintenance Capital 2. Dividends 3. Growth Capital 4. Acquisitions 5. Share Repurchase 9
  10. UBS Global Oil and Gas Conference – Occidental Petroleum Corp – slide 10
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  11. UBS Global Oil and Gas Conference – Occidental Petroleum Corp – slide 11
    Consistent Dividend Growth Our ability to pay dividends is indicated by our free cash flow generation. In mid-February, the Board announced a further 18.5% increase in our dividend to an annualized rate of 2.56 per share, bringing…
  12. UBS Global Oil and Gas Conference – Occidental Petroleum Corp – slide 12
    Consistent Dividend Growth (/share) 16.00 14.51 14.00 11.95 12.00 9.79 10.00 7.95 8.00 6.48 6.00 5.16 3.96 4.00 3.02 2.56 2.16 2.22 1.84 1.57 1.47 2.00 1.21 1.31 1.02 0.80 0.94 0.500.50 0.52 0.55 0.65 0.00 2002…
  13. UBS Global Oil and Gas Conference – Occidental Petroleum Corp – slide 13
    Worldwide Oil & Gas Producing Areas United States Libya Iraq California Qatar Permian Bahrain UAE Basin Oman Yemen Colombia Bolivia Focus Areas 13
  14. UBS Global Oil and Gas Conference – Occidental Petroleum Corp – slide 14
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  15. UBS Global Oil and Gas Conference – Occidental Petroleum Corp – slide 15
    Capital Efficiency & Operating Cost Reduction Program We are executing a focused drilling program in our core areas and to date we are running ahead of our full-year objectives in our program to improve domestic operational and…
  16. UBS Global Oil and Gas Conference – Occidental Petroleum Corp – slide 16
    Capital Efficiency & Operating Cost Reduction Program Reduced both our domestic well and operating costs by 19% vs. 2012. Ahead of our previously stated targets of 15% well cost improvement and total oil and gas operating costs below…
  17. UBS Global Oil and Gas Conference – Occidental Petroleum Corp – slide 17
    Operating Cost Reduction Program Enhancing cash margins through reductions in operating costs Compared to the 2012 levels, downhole maintenance and workover costs have dropped 36% and surface operations by 16%, contributing to a 19%…
  18. UBS Global Oil and Gas Conference – Occidental Petroleum Corp – slide 18
    Operating Cost Reduction Program Enhancing cash margins through reductions in operating costs Workover activity Eliminating inefficient workover rigs; Better planning and scheduling allows similar number of well servicing jobs as we…
  19. UBS Global Oil and Gas Conference – Occidental Petroleum Corp – slide 19
    Capital Efficiency Program Drive capital efficiency, particularly in core drilling programs, by: Locking in drilling programs. Modifying well objectives and design. Improving operational execution. Improving our contracting…
  20. UBS Global Oil and Gas Conference – Occidental Petroleum Corp – slide 20
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  21. UBS Global Oil and Gas Conference – Occidental Petroleum Corp – slide 21
    Capital Spending 2013 Outlook vs. 2012 Actual Our overall capital spending is expected to decline by 6% in 2013 to 9.6 billion from the 10.2 billion we spent in 2012. Almost all of the reductions will be made in domestic oil & gas…
  22. UBS Global Oil and Gas Conference – Occidental Petroleum Corp – slide 22
    2013 Capital Outlook Domestic Oil & Gas Permian capital should remain flat. We expect to reduce CA capex Exploration & Other, 9% 500 mm from 2012, as a result of ongoing well cost reductions and US California, Midstream, 24%…
  23. UBS Global Oil and Gas Conference – Occidental Petroleum Corp – slide 23
    First Quarter 2013 Production Occidentals domestic oil and gas segment produced record volumes for the tenth consecutive quarter and continued to execute on our liquids production growth strategy. 1Q13 domestic production of 478…
  24. UBS Global Oil and Gas Conference – Occidental Petroleum Corp – slide 24
    2013 Domestic Program Three main objectives of 2013 domestic program Delineate our core drilling areas in the Permian Basin. Accumulated more than 1.7 million net acres covering both established and emerging plays. Focused on…
  25. UBS Global Oil and Gas Conference – Occidental Petroleum Corp – slide 25
    2013 Production Outlook Domestically, we continue to expect solid growth in our oil production for the year. We expect 2Q13 liquids growth to be modest with higher growth rates coming in the second half of the year. We expect to…
  26. UBS Global Oil and Gas Conference – Occidental Petroleum Corp – slide 26
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  27. UBS Global Oil and Gas Conference – Occidental Petroleum Corp – slide 27
    Permian Basin Overview 2012 production of 207 mboe/d, vs. 198 mboe/d in 2011; Largest oil producer in Permian (16% net share of total) Largest operator in Permian (of 1,500+ operators); 60% of Oxys Permian oil production is from…
  28. UBS Global Oil and Gas Conference – Occidental Petroleum Corp – slide 28
    Permian non-Co2 Business Permian Basin Primary Plays Oxys Permian non-CO2 business is one of our Matador Arch fastest growing assets; Northwest Shelf Since beginning delineation Midland Basin and development efforts in…
  29. UBS Global Oil and Gas Conference – Occidental Petroleum Corp – slide 29
    Permian non-Co2 Business Acreage in Select Permian Plays Wolfberry (Thousands of Acres) Core play - largest proportion of Delaware Basin Gross Oxy Share activity. Avalon 340 120 Mix of infill wells in core areas and Bone Spring 1…
  30. UBS Global Oil and Gas Conference – Occidental Petroleum Corp – slide 30
    Permian non-Co2 Business Acreage in Select Permian Plays Emerging Wolfbone play in Reeves (Thousands of Acres) County, TX Delaware Basin Gross Oxy Share Acquired a meaningful, contiguous Avalon 340 120 acreage position in 2012.…
  31. UBS Global Oil and Gas Conference – Occidental Petroleum Corp – slide 31
    Permian Basin Solid Returns, Free Cash Flow 31
  32. UBS Global Oil and Gas Conference – Occidental Petroleum Corp – slide 32
    Permian Basin Solid Returns, Free Cash Flow 2012 2013E Production (Mboepd) 207 Reserves at 12/31/2012 (Mmboe) 1,241 CapEx (mm) 1,920 1,900 Pretax Earnings (mm) 2,250 *Cash Before Tax (mm) 1,126 *(EBITDA CapEx). 32
  33. UBS Global Oil and Gas Conference – Occidental Petroleum Corp – slide 33
    California Overview Largest acreage holder in CA with 2.1 mm acres, majority of which are net fee mineral interests; 2012 production of 148 mboe/d vs. 138 mboe/d in 2011; Sacramento 78% interest in the Elk Hills Field the…
  34. UBS Global Oil and Gas Conference – Occidental Petroleum Corp – slide 34
    California Update Total CA oil production volumes grew 10% in 2012 vs. 2011, and as we continued to execute on our oil production growth strategy. We have grown our production in CA despite declines seen at the mature Elk Hills…
  35. UBS Global Oil and Gas Conference – Occidental Petroleum Corp – slide 35
    Unconventional Opportunities 35
  36. UBS Global Oil and Gas Conference – Occidental Petroleum Corp – slide 36
    Unconventional Opportunities 2012 2013E Production (Mboepd) 192 Reserves at 12/31/2012 846 (Mmboe) CapEx (mm) 2,921 2,042 Pretax Earnings (mm) 1,357 36
  37. UBS Global Oil and Gas Conference – Occidental Petroleum Corp – slide 37
    Future Growth Projects We are currently in an investing phase in many of our businesses where a Capital for future growth projects: higher than normal portion of our capital is spent on longer-term projects. The Al Hosn Gas Project.…
  38. UBS Global Oil and Gas Conference – Occidental Petroleum Corp – slide 38
    Future Contribution of Growth Projects Future growth projects: The Al Hosn Gas Project; Oxy Total Net PP&E - 52 Billion The BridgeTex Pipeline; A new chlor-alkali plant in the chemical business; Gas and CO2 processing plants…
  39. UBS Global Oil and Gas Conference – Occidental Petroleum Corp – slide 39
    Future Growth Al Hosn Gas Project 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 within the…
  40. UBS Global Oil and Gas Conference – Occidental Petroleum Corp – slide 40
    Future Growth Al Hosn Gas Project The Project is 80% complete and progressing as planned; Spending on the Project was 12% (1.2 B) of our total capex for 2012; Capex for the Project is expected to decline modestly from 2012 levels,…
  41. UBS Global Oil and Gas Conference – Occidental Petroleum Corp – slide 41
    Middle East/North Africa Growth, Highly Profitable 41
  42. UBS Global Oil and Gas Conference – Occidental Petroleum Corp – slide 42
    Middle East/North Africa Growth, Highly Profitable 2012 2013E Production (Mboepd) 270 Reserves at 12/31/2012 (Mmboe) 929 CapEx (mm) 3,125 3,106 Pretax Earnings (mm) 4,875 *Cash After Tax (mm) 905 *(EBITDA CapEx Taxes). 42
  43. UBS Global Oil and Gas Conference – Occidental Petroleum Corp – slide 43
    Future Growth The BridgeTex Pipeline Project Goal is to maximize our oil price Oxy spending 400 mm to develop the BridgeTex pipeline as a JV with realizations, particularly for the oil Magellan Midstream Partners; produced in our…
  44. UBS Global Oil and Gas Conference – Occidental Petroleum Corp – slide 44
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  45. UBS Global Oil and Gas Conference – Occidental Petroleum Corp – slide 45
    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 the Companys cost of capital Consistent, annual…
  46. UBS Global Oil and Gas Conference – Occidental Petroleum Corp – slide 46
    2013 Summary Outlook Assuming similar realized oil and gas prices to 2012 and our expectation of comparable Chemical and Midstream segment earnings, we expect that our 2013 program will: Generate cash flow from operations of about…
  47. UBS Global Oil and Gas Conference – Occidental Petroleum Corp – slide 47
    Peer Company Enterprise Value 420 410 (As of 5/20/13) Integrated O&G 360 Large Cap Independent E&P S/Mid Cap Oil Focused E&P 300 (Enterprise Value bln) 240 234 180 120 90 80 56 60 46 42 29 32 28 26 22 20 8 12 9…
  48. UBS Global Oil and Gas Conference – Occidental Petroleum Corp – slide 48
    Peer Company Production 4,500 4,395 (1st Quarter 2013) Integrated O&G 4,000 (Average Daily Production (Mmboe/d) Large Cap Independent E&P 3,500 S/Mid Cap Oil Focused E&P 3,000 2,645 2,500 2,000 1,557 1,500 1,000…
  49. UBS Global Oil and Gas Conference – Occidental Petroleum Corp – slide 49
    Enterprise Value / 2013E EBITDA 10.0 Integrated O&G 9.4 (As of 5/20/13) Large Cap Independent E&P S/Mid Cap Oil Focused E&P 8.0 7.2 7.3 (Enterprise Value / EBITDA) 7.0 6.5 6.0 5.6 5.6 5.4 5.4 5.0 4.5 4.0 4.0 3.9…
  50. UBS Global Oil and Gas Conference – Occidental Petroleum Corp – slide 50
    Share Price / 2013E Earnings 30.6 30.0 Integrated O&G (As of 5/20/13) Large Cap Independent E&P 25.0 S/Mid Cap Oil Focused E&P 21.7 21.4 (Price / 2013E Earnings) 19.9 20.0 17.2 16.3 16.7 16.5 15.0 13.5 13.5 11.5 11.6…
  51. UBS Global Oil and Gas Conference – Occidental Petroleum Corp – slide 51
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