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Q4 2014 Earnings Conference Call – Occidental Petroleum Corp

Occidental Petroleum Corp · Jan 29, 2015 · 49 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. Q4 2014 Earnings Conference Call – Occidental Petroleum Corp – slide 1
    OCCIDENTAL PETROLEUM CORPORATION Fourth Quarter 2014 Earnings Conference Call January 29, 2015
  2. Q4 2014 Earnings Conference Call – Occidental Petroleum Corp – slide 2
    Fourth Quarter 2014 Earnings Highlights Executed many of our strategic initiatives, including the Hugoton Sale spin-off of California Resources, the sale of our Hugoton 18 MBOED 1Q14 gas properties, BridgeTex Pipeline and PAGP units…
  3. Q4 2014 Earnings Conference Call – Occidental Petroleum Corp – slide 3
    Fourth Quarter 2014 Earnings Highlights We completed the Al Hosn gas project, on budget and on time, which started production in early January. It is currently producing 20,000 BOED (net to Oxy) and will ramp up as the 2nd train…
  4. Q4 2014 Earnings Conference Call – Occidental Petroleum Corp – slide 4
    Fourth Quarter 2014 Earnings Macro Environment The confluence of US supply growth, weaker Asian demand and extreme currency movements have led to a significant decline in product prices. Our company is resilient and built to weather…
  5. Q4 2014 Earnings Conference Call – Occidental Petroleum Corp – slide 5
    Fourth Quarter 2014 Earnings Portfolio Review We have minimized our development activities in the Williston Basin, domestic gas properties, Bahrain, and the Joslyn oil sands project, as these have sub-par returns in this current…
  6. Q4 2014 Earnings Conference Call – Occidental Petroleum Corp – slide 6
    Fourth Quarter 2014 Earnings 2015 Capital Outlook Focus our capital spending on the core areas we Capital Budget ( bn) operate, principally in the Permian Basin. Two-thirds of the capital budget will be allocated 8.7 to maintenance…
  7. Q4 2014 Earnings Conference Call – Occidental Petroleum Corp – slide 7
    Fourth Quarter 2014 Earnings 2015 Production Outlook Despite a lower capital program, we expect to deliver 6% - 10% annual production growth in 2015, driven by the start-up of the Al Hosn gas project and the focused development…
  8. Q4 2014 Earnings Conference Call – Occidental Petroleum Corp – slide 8
    Fourth Quarter 2014 Earnings Oil & Gas Reserves Organic All Sources (excl. revisions, asset sales, (ex-asset sales) acquisitions) Total Domestic Total Domestic Reserve Adds (MMBOE) 380 308 395 332 Production (MMBOE) 218 116 218…
  9. Q4 2014 Earnings Conference Call – Occidental Petroleum Corp – slide 9
    Fourth Quarter 2014 Earnings Oil & Gas Reserves - Total We had a successful year in growing the Companys reserve base by adding substantially more reserves than we produced. Company-wide, we replaced 174% of our production before asset…
  10. Q4 2014 Earnings Conference Call – Occidental Petroleum Corp – slide 10
    Fourth Quarter 2014 Earnings Oil & Gas Reserves - Total 2014 Organic Reserve (in millions of BOE) 2,900 Replacement Ratio of 181% 72 2,819 2,800 265 (38) 2,738 (218) 2,700 76% liquids 2,600 71% proved developed…
  11. Q4 2014 Earnings Conference Call – Occidental Petroleum Corp – slide 11
    Fourth Quarter 2014 Earnings Oil & Gas Reserves - United States Built a large portfolio of growth oriented assets in the U.S. In 2014, we spent a much larger portion of our investment dollars on the development of this portfolio.…
  12. Q4 2014 Earnings Conference Call – Occidental Petroleum Corp – slide 12
    Fourth Quarter 2014 Earnings Oil & Gas Reserves - United States 2014 Organic Reserve 1,900 Replacement Ratio of (in millions of BOE) 286% 265 (38) 1,800 1,781 84% 1,700 1,670 (116) liquids 65% proved 1,600 developed…
  13. Q4 2014 Earnings Conference Call – Occidental Petroleum Corp – slide 13
    Fourth Quarter 2014 Earnings Capital Efficiency Organic F&D Costs* Through the success of our drilling ( / BOE) U.S. Total program and capital efficiency initiatives, we lowered our F&D over recent years. 17.50 17.71 16.22 16.89…
  14. Q4 2014 Earnings Conference Call – Occidental Petroleum Corp – slide 14
    Fourth Quarter 2014 Earnings Cash Flow Priorities 1. Base/Maintenance Capital 2. Dividends 3. Growth Capital 4. Share Repurchase 5. Acquisitions 14
  15. Q4 2014 Earnings Conference Call – Occidental Petroleum Corp – slide 15
    Fourth Quarter 2014 Earnings Cash Flow Priorities We have increased the dividend for 12 consecutive years and are committed to annual increases. Given the uncertainty in product prices, the decision on the size of the increase will be…
  16. Q4 2014 Earnings Conference Call – Occidental Petroleum Corp – slide 16
    Fourth Quarter 2014 Earnings Highlights Results Domestic oil production (Bbl/d) 189,000 11% year / year growth* Total company production (BOED) 616,000 Core earnings** 560 million Core diluted EPS** 0.72 2014 CFFO from…
  17. Q4 2014 Earnings Conference Call – Occidental Petroleum Corp – slide 17
    Fourth Quarter 2014 Earnings Under the Successful Efforts method, if an oil and gas propertys estimated future net cash flows are not sufficient to recover its carrying amount using the period end futures curve, an impairment charge…
  18. Q4 2014 Earnings Conference Call – Occidental Petroleum Corp – slide 18
    Fourth Quarter 2014 Earnings Oil & Gas Segment Pre-Tax Core Earnings PRE-TAX 4Q14 vs. 3Q14 ( in millions) 1,571 (845) Core Results 4Q14 0.7 B 3Q14 1.6 B 4Q13 1.8 B 173 (100) (63) 736 3Q14 Sales Price Sales Volumes Higher…
  19. Q4 2014 Earnings Conference Call – Occidental Petroleum Corp – slide 19
    Fourth Quarter 2014 Earnings Oil and Gas Total Company Production Total company oil and gas production volumes averaged 616,000 BOE per day, an increase of 21,000 BOE in daily production from the third quarter. Company-wide Oil & Gas…
  20. Q4 2014 Earnings Conference Call – Occidental Petroleum Corp – slide 20
    Fourth Quarter 2014 Earnings Oil and Gas Domestic Production Met our domestic oil production growth guidance with a year over year increase of 19,000 BOE per day or about 11% led by our Permian Resources assets. Domestic Oil & Gas…
  21. Q4 2014 Earnings Conference Call – Occidental Petroleum Corp – slide 21
    Fourth Quarter 2014 Earnings Oil & Gas Realized Prices Realized Prices Benchmark Prices Worldwide Worldwide Domestic Nat. Oil (/bbl) NGLs (/bbl) Gas (/mmbtu) WTI Brent NYMEX 4Q14 71.58 27.39 3.56 73.15 76.98 3.99 WTI % 98% 37% 89%*…
  22. Q4 2014 Earnings Conference Call – Occidental Petroleum Corp – slide 22
    Fourth Quarter 2014 Earnings Oil & Gas Operating Costs Production Costs ( / BOE) 4Q13 FY2013 1Q14 2Q14 3Q14 4Q14 FY 2014 13.12 12.56 12.94 13.34 13.45 14.18 13.50 DD&A ( / BOE) 4Q13 FY2013 1Q14 2Q14 3Q14 4Q14 FY 2014 18.12 16.57…
  23. Q4 2014 Earnings Conference Call – Occidental Petroleum Corp – slide 23
    Fourth Quarter 2014 Earnings Chemical Segment Core Earnings PRE-TAX 4Q14 vs. 3Q14 Guidance ( in millions) 1Q15 expected to be 140 mm. 56 (10) 160 140 (30) 4 Core Results 4Q14 160 mm 3Q14 140 mm 4Q13 128 mm 3Q14 Sales…
  24. Q4 2014 Earnings Conference Call – Occidental Petroleum Corp – slide 24
    Fourth Quarter 2014 Earnings - Midstream, Marketing & Other Segment Core Earnings PRE-TAX 4Q14 vs. 3Q14 ( in millions) 27 (26) 10 168 155 (9) 11 Core Results 4Q14 168 mm 3Q14 155 mm 4Q13 106 mm 3Q14 Pipelines Gas Plants…
  25. Q4 2014 Earnings Conference Call – Occidental Petroleum Corp – slide 25
    Fourth Quarter 2014 Earnings FY 2014 Cash Flow FY14 FY 2014 Debt / Capital 16% ( in millions) ROE* 9% 6,100 (2,200) ROCE* 8% 12,800 (7,300) (2,500) (1,900) CFFO 7,800 4,200 9,400 (1,400) Beginning Restricted Cash…
  26. Q4 2014 Earnings Conference Call – Occidental Petroleum Corp – slide 26
    Fourth Quarter 2014 Earnings FY 2014 Cash Flow We received cash proceeds of 4.95 billion from the bond offering completed by California Resources in October. IRS rules mandate that use of these proceeds be restricted to share…
  27. Q4 2014 Earnings Conference Call – Occidental Petroleum Corp – slide 27
    Fourth Quarter 2014 Earnings 2015 Production Outlook Using a 55 WTI and 60 Brent price curve, we expect total company production to be between 630,000 and 650,000 BOE per day in 2015. US Production Outlook Oil production for FY 2015…
  28. Q4 2014 Earnings Conference Call – Occidental Petroleum Corp – slide 28
    Fourth Quarter 2014 Earnings 1Q15 & FY 2015 Guidance Summary Oil & Gas Segment Price Sensitivity Pre-tax Income Impact (Quarter) 2015 total production is expected to be Oil +/- 1/bbl = +/- 32 mm between 630,000 650,000 BOED*. NGL…
  29. Q4 2014 Earnings Conference Call – Occidental Petroleum Corp – slide 29
    Fourth Quarter 2014 Earnings 2015 Capital Outlook 2015 Capital Budget Given 50% decline in spot oil prices vs. 2014, ( in bln) ramping down capital spending through 2015 8.7 All business segments will see cuts in capital spending…
  30. Q4 2014 Earnings Conference Call – Occidental Petroleum Corp – slide 30
    Fourth Quarter 2014 Earnings 2015 Capital Breakdown Domestic 2015E Capital - 5.8 bln Overall spending levels in the Permian will decline slightly and significant reductions will come from Williston and South Texas. Chemicals 10%…
  31. Q4 2014 Earnings Conference Call – Occidental Petroleum Corp – slide 31
    Fourth Quarter 2014 Earnings 2015 Capital Breakdown Chemicals 2015E Capital - 5.8 bln Includes the Ingleside Ethylene joint venture project that we expect to complete late 2016 and be commissioned in 1Q 2017. Chemicals We expect…
  32. Q4 2014 Earnings Conference Call – Occidental Petroleum Corp – slide 32
    Fourth Quarter 2014 Earnings Capital Cost Reductions Capital Savings 2015 plan includes pricing concessions from our suppliers of 250 mm for key services ( in millions) If the market environment remains low, we 500 mm+ expect to see…
  33. Q4 2014 Earnings Conference Call – Occidental Petroleum Corp – slide 33
    Fourth Quarter 2014 Earnings Operating Cost Structure FY 2014 Operating Costs - 15 / BOE 2014 domestic operating costs averaged 15 / BOE Gathering & Processing Expect operating cost Support reductions in workovers, (Labor) downhole…
  34. Q4 2014 Earnings Conference Call – Occidental Petroleum Corp – slide 34
    Fourth Quarter 2014 Earnings Permian Resources Summary Achieved 9% increase in BOED and 19% BOPD versus Q3 2014 Total Production 84,000 Well Activity (BOED) 100 Oil Production (BOPD) 51,000 80 vs. 3Q-2014 19% Increase Well Count…
  35. Q4 2014 Earnings Conference Call – Occidental Petroleum Corp – slide 35
    Fourth Quarter 2014 Earnings Permian Resources Delaware Basin Active Rigs Well Activity Geologic Delaware Age Basin 20 60 Bell Canyon Cherry Canyon 15 Brushy Canyon Well Count 40 Rig Count Avalon 1st Bone Spring 10…
  36. Q4 2014 Earnings Conference Call – Occidental Petroleum Corp – slide 36
    Fourth Quarter 2014 Earnings Permian Resources Delaware Basin Well Performance Wolfcamp A/ B Benches BOED / 1000 2,432 577 PECK ST 258 6H 1,760 418 2,018 273 BUZZARD ST 9H 1,778 241 1,503 303 Q4 Avg 1,190 225 1,377 325 Q3 Avg…
  37. Q4 2014 Earnings Conference Call – Occidental Petroleum Corp – slide 37
    Fourth Quarter 2014 Earnings Permian Resources Midland Basin Geologic Midland Basin Active Rigs Well Activity Age 15 40 Yates Grayburg San Andres Clear Fork 10 Well Count Rig Count Upper Spraberry Permian Middle…
  38. Q4 2014 Earnings Conference Call – Occidental Petroleum Corp – slide 38
    Fourth Quarter 2014 Earnings Permian Resources Midland Basin Well Performance Spraberry, Wolfcamp A / B Benches BOED / 1000 1,561 198 MERCHANT 1411 1,136 144 952 150 Q4 Avg 787 122 779 134 Q3 Avg 612 105 770 125 Q1-Q2 Avg…
  39. Q4 2014 Earnings Conference Call – Occidental Petroleum Corp – slide 39
    Fourth Quarter 2014 Earnings Permian Occidental is the largest operator and oil producer Nearly 5 million gross acres Permian Resources: Unconventional shale development Permian EOR: CO2 and waterflood development Midstream…
  40. Q4 2014 Earnings Conference Call – Occidental Petroleum Corp – slide 40
    Fourth Quarter 2014 Earnings Permian Resources 2015 Capital Program Capital Expenditures (B) 2014 2015 Development 1.9 1.7 Exploration 0.3 0.0* Program Well Count Well Count By Bench 80 400 60 Well Count 300 40 Well…
  41. Q4 2014 Earnings Conference Call – Occidental Petroleum Corp – slide 41
    Fourth Quarter 2014 Earnings Permian Basin Accelerating growth and driving efficiency Permian Resources has a sufficient inventory of wells to continue profitable development in a low price environment. 1. Continue investment in…
  42. Q4 2014 Earnings Conference Call – Occidental Petroleum Corp – slide 42
    Fourth Quarter 2014 Earnings Permian EOR 150,000 BOEPD of low cost CO2 Supply and Processing production Most active and largest EOR operator in the Permian Basin with 30 active floods Over 40 years of successful CO2 flooding…
  43. Q4 2014 Earnings Conference Call – Occidental Petroleum Corp – slide 43
    Fourth Quarter 2014 Earnings World Leader in Enhanced Oil Recovery U.S. CO2 EOR Projects 3,500 Size of bubble = CO2 EOR 3,000 Production Volume Number of Injection Wells Oxy 2,500 2,000 All of Oxys CO2 operations 1,500…
  44. Q4 2014 Earnings Conference Call – Occidental Petroleum Corp – slide 44
    Fourth Quarter 2014 Earnings Permian EOR Cost Structure Permian EOR can operate at cash costs as low as 22 per BOE 2015 Permian EOR Cost Structure 2015 Permian EOR Cost Structure 55 WTI, 3.00 NYMEX 35 WTI, 2.00 NYMEX 35 35 30…
  45. Q4 2014 Earnings Conference Call – Occidental Petroleum Corp – slide 45
    Fourth Quarter 2014 Earnings Permian EOR South Hobbs CO2 project added 28 MMBOE at 10.60 per BOE North SLAUGHTER IRISH Hobbs (CVX) Unit South COCHRAN IGOE SMITH HOCKLEY LEVELLAND SLAUGHTER LUBBOCK LUBBOCK CROSBY…
  46. Q4 2014 Earnings Conference Call – Occidental Petroleum Corp – slide 46
    Fourth Quarter 2014 Earnings Permian EOR ROZ Projects development cost ranges from 3 - 7 per BOE 2015 Plan: Deepen 81 wells Stranded Oil in the Residual Oil Zone by L. Stephen Melzer, Advanced Resources International and the U.S.…
  47. Q4 2014 Earnings Conference Call – Occidental Petroleum Corp – slide 47
    Fourth Quarter 2014 Earnings Permian EOR Unrisked, gross resource potential of up to 1.9 billion barrels 2015 EOR CAPEX = 500MM Unrisked, Gross Reserves and Resources Complete and begin CO2 injection Billion BOE at South Hobbs…
  48. Q4 2014 Earnings Conference Call – Occidental Petroleum Corp – slide 48
    Fourth Quarter 2014 Earnings Permian Resources Guidance In 2015, we will leverage expertise gained Permian Resources Production from a successful 2014 appraisal program to implement focused development strategy Well positioned…
  49. Q4 2014 Earnings Conference Call – Occidental Petroleum Corp – slide 49
    FOURTH QUARTER 2014 EARNINGS CONFERENCE CALL Q&A

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