Occidental Petroleum Corporation 2010 UBS Global Oil & Gas Conference May 25, 2010 Stephen I. Chazen President and Chief Financial Officer 1
E&P Business Drivers Volume Growth Capital Expenditures Acquisitions Return Targets 2
Volume Growth Drivers Base 5 8% Growth CO2 in Permian Current California risked prospects Rockies gas Bahrain Oman Iraq Upside from Existing Holdings New California conventional and unconventional prospects Permian exploration…
International Producing Areas Libya Iraq Qatar Bahrain UAE Oman Yemen Colombia Bolivia Argentina Focus Areas 4
International Oil & Gas Production Outlook Thousand BOE/Day (Assumes 75 WTI Price) 486 7.5% Total 500 476 CAGR 452 6.0% Base 420 CAGR 400 365 338 300 453 453 434 200 414 365 338 100 0 2009 2010 2011 2012 2013 2014 Base…
Major Potential Drivers of Production and Profitability International Oil & Gas Bahrain Base case shows steady but not aggressive progress Possible better oil results by 2014 Oman Base shows only modest growth of Oman gas markets…
Major Potential Drivers of Production and Profitability International Oil & Gas Argentina Modest base case shown Potential is very high Iraq Field is capable of outperforming our estimates 7
International Oil & Gas Summary 5 years Grow: Oman gross production from 190 to 240 Mboepd Bahrain gross oil production from 30 to 75 Mbopd Bahrain gross gas production from 1.1 to 1.6 Bcfd Argentina gross production from 50 to 85…
US Oil & Gas Production Outlook Thousand BOE/Day 700 632 10.9% Total CAGR 600 557 494 6.4% Base 500 417 CAGR 391 400 376 300 482 512 452 200 391 411 376 100 0 2009 2010 2011 2012 2013 2014 Base Variance California…
Major Potential Drivers of Production and Profitability US Oil & Gas Permian CO2 3 billion net barrels in resource from Oxy operated only Possibly more CO2 available over the 5-year period Probable better response by 2013-14 Rockies…
Major Potential Drivers of Production and Profitability US Oil & Gas California Conventional 50 prospect inventory and growing Low F&D Considerable success so far Only two or three moderate exploration successes built into…
Permian Growth Opportunities Permian Basin Primary Development (1,000+ locations) Plan a 6-7 rig program Dora Roberts Wolfberry Houston Continued southeast New Mexico exploitation Deeper added plays Bravo Dome CO2 Source Oklahoma…
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…
Permian Reserves and CO2 Requirements The next billion barrels Net Net CO2 Reserves* Required (MMBOE) (TCF) Developed 570 2.8 Undeveloped 430 2.2 TOTAL 1,000 5.0 * 3P Reserves 14
Typical Permian CO2 Project Cost Structure 80 70 13.00 60 4.30 9.80 50 5.70 40 75.00 3.80 / BOE 30 20 38.40 10 - lty t e l x n t ita os os u Ta gi a en ap C ar C…
Mid-Continent Gas Summary Primary development Prudent approach to gas drilling 3.8 TCFE Resource 6,000+ drilling locations Low royalty burden enhances economics Recent Hugoton acquisition doubles acreage position and adds…
California Development Kern County Discovery Currently have 24 wells capable of producing 45 MBOEPD Currently gas plant constrained When 90 MMCFPD skid mounted facility is brought online, it will be filled Planning to drill an…
Kern County Discovery Discovery Volumes Gross Production (Net MMBOE) 50 Results after 24 Wells: Thousands of BOE (Gross) 40 Produced + Proved 88 Probable 47 30 Possible 40 115 End 1Q 10 175 250 20 2010 Step-Out Plan 100…
Elk Hills Gas Plant Expansions Gas Plant Capacity MMCFD Current 420 (at capacity) Late 2Q 2010 Skid Plant 90 (will be at capacity) Q1 2012 Cryo Plant 200 Total 710 200 MMCFD plantlargest that could be built in 20-24 months Awarded…
California Conventional Exploration Major Producing Basins World Class Province 35+ Billion BOE discovered 2 Billion BOE 5 of top 12 U.S. oil fields Significant Remaining Potential Sacramento Large undiscovered resources San 20…
Oxy Land Position 1998 - 2010 Elk Hills Acquisition in 1998 Learn, build, explore close-in Dominant player, expand 1998 Fee Holdings Kern Front Field 1999-2005 Lease/Fee Additions 2005-2010 Lease/Fee Additions Elk Hills Field…
Oxy California Play Focus 47 Plays Identified 10 Plays Selected L.A. Focus Sac. Plays Valley San Joaquin Emerging Ventura All Others Targeting Oil Prone Plays and Areas Integrate Well, Seismic, Outcrop and Analog Data…
Exploration Going Forward Major Producing 2011 - 14 Annual Program Basins Wells* Discovery Play 7-10 High Potential 5-10 Bread & Butter 5-6 Sacramento San Emerging 3-4 Francisco 14-20 Wells Total per year 20 - 30 Bakersfield…
California Conventional Exploration Tremendous potential Attractive risk profile (Oxy 1 in 3 success rate) Dominant land position Kern County Discovery 175 - 250 MMBOE net discovered with significant upside Discovery Play 7-10…
Oxy California Unconventional Shale Play Shale drilling program really started in 1998 at Elk Hills Currently, over 1/4th of Oxys production in California comes from shales Have successfully tested concept in eight more fields…
Occidental Acreage Southern California Oxy has over Rose Rose 1.3 MM net acres North North Shafter Shafter in California Monument Monument Junction Junction Largest acreage Bakersfield position in the Elk Elk Hills Hills…
Side by Side Play Comparison Play Depth Thickness Porosity Permeability TOC (ft) (ft) (%) (mD) (%) CA Shales 3,500 - 500 3,500 5…
Oxy California Shale Summary 870,000 acres are within most prospective shale plays Oxys average NRI 95% Multiple potentially productive shale zones in each well Oxys acreage encompasses favorable thermal regime Identified 15 areas to…
Worldwide Oil & Gas Production Outlook Thousand BOE/Day (Assumes 75 WTI Price) 1200 1,118 9.4% Total 1,033 CAGR 1000 946 837 6.2% Base CAGR 756 800 714 600 400 200 0 2009 2010 2011 2012 2013 2014 Domestic Base…
Capital Spending Program California, 20% Permian, 13% California, 23% Permian, 10% % tin ent, 4 Chemicals & Con Midstream, 20% M id Mid Continent, 12% Chemicals & Latin America, 11% Midstream, 8% Latin America, 9% Middle…
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…
Finding & Development Costs per Barrel F&D Costs Actual as a % of 6:1 * Prices ** WTI Price 2009 7.90 9.64 16% 3-Year Average 15.04 18.40 24% (2007 2009) 5-Year Average 14.77 16.84 24% (2005 2009) 10-Year Average 9.15 9.82 19%…
Return on Assets Net Income Return on Assets 5 Year Average U.S. 19% International 24% Total E&P 21% Cash Flow* Return on Assets 5 Year Average U.S. 27% International 41% Total E&P 31% * Net Income + DD&A See attached for…
Cash Flow Priorities 1. Base/Maintenance Capital 2. Dividends 3. Growth Capital 4. Acquisitions 5. Share Repurchase 34
Capital Spending Program Base Oil & Gas capital historically running at 2.5 billion As production increases, the base capital will grow ( in Billions) 2010-2014 Oil & Gas and Midstream Capital 2010 Cumulative Growth Capital 1.8…
Conservative Accounting Proved Unproved Properties Developed plus Goodwill / Reserves / Total Net Capitalized Costs Company Proved Reserves plus Goodwill OXY 77.3% 6.7% A 54.4% 10.0% B 59.2% 21.6% C 69.1% 8.2% D 70.5% 39.3% E…
Capital Program Effectiveness (Equity Market Value Created per 1 Change in Shareholders Equity*) Five years Ten Years Company ended 12/31/09 ended 12/31/09 OXY 2.67 2.57 A 2.28 2.53 B 1.67 1.31 C 1.38 1.63 D 1.38 1.29 E 1.06…
Investment Attributes 5 8% base annual production growth Opportunity for additional volume growth Annual increases in dividends Significant financial flexibility for opportunities in distressed periods Conservative financial…
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