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Q4 2013 Earnings Conference Call – Occidental Petroleum Corp

Occidental Petroleum Corp · Jan 30, 2014 · 61 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 2013 Earnings Conference Call – Occidental Petroleum Corp – slide 1
    Occidental Petroleum Corporation Fourth Quarter 2013 Earnings Conference Call January 30, 2014
  2. Q4 2013 Earnings Conference Call – Occidental Petroleum Corp – slide 2
    Fourth Quarter 2013 Earnings 2013 Highlights Grew our domestic oil production last year by 11 mb/d over 2012 to 266 mb/d. Exceeded our capital efficiency goals by reducing drilling costs by 24% from the 2012 level. Reduced our…
  3. Q4 2013 Earnings Conference Call – Occidental Petroleum Corp – slide 3
    Fourth Quarter 2013 Earnings 2013 Development p Program g Review Domestic Operating Costs Improved capital efficiency by 24% over 2012 in the US, saving 900 mm of capital. Permian 50% of improvement 17.43 14.43 California 25% of…
  4. Q4 2013 Earnings Conference Call – Occidental Petroleum Corp – slide 4
    Fourth Quarter 2013 Earnings Oil & Gas Reserves Very successful year in growing the Companys reserve base, by adding substantially more reserves than we produced, over 90% of which was added through our organic development program.…
  5. Q4 2013 Earnings Conference Call – Occidental Petroleum Corp – slide 5
    Fourth Quarter 2013 Earnings Oil & Gas Reserves 2013 Overall Reserve (in millions of BOE) 142 3,500 Replacement Ratio of 169% 32 3,296 (278) 291 FY12 Reserves 2013 Production U.S. Organic U.S. Acquisitions International…
  6. Q4 2013 Earnings Conference Call – Occidental Petroleum Corp – slide 6
    Fourth Quarter 2013 Earnings Oil & Gas Reserves Built a large portfolio of growth oriented assets in the U.S. In 2013 2013, we spent a much larger portion of our investment dollars on the development of this portfolio. Our organic…
  7. Q4 2013 Earnings Conference Call – Occidental Petroleum Corp – slide 7
    Fourth Quarter 2013 Earnings U.S. Oil & Gas Reserves 2013 U.S. Reserve (in millions of BOE) Replacement Ratio of 190% 32 2,400 291 2,265 (173) FY12 Reserves 2013 Production U.S. Organic U.S. Acquisitions FY13 Reserves…
  8. Q4 2013 Earnings Conference Call – Occidental Petroleum Corp – slide 8
    Fourth Quarter 2013 Earnings Oil & Gas Reserves At year end 2013, 73% of total proved reserves were liquids, increasing from 72% in 2012. Of the total reserves, 70% were proved developed reserves, compared to 73% in 2012. Increase…
  9. Q4 2013 Earnings Conference Call – Occidental Petroleum Corp – slide 9
    Fourth Quarter 2013 Earnings Oil & Gas Reserves Success of our organic reserve additions and the efficiencies we have achieved in our operations demonstrates the significant i ifi t progress we have h made d in i turning t i the…
  10. Q4 2013 Earnings Conference Call – Occidental Petroleum Corp – slide 10
    Fourth Quarter 2013 Earnings ROCE Our focus in 2013 was to enhance Return on Capital Employed * shareholder value through our results. Heavily focused on growing domestic oil production, improving our capital efficiency and F&D…
  11. Q4 2013 Earnings Conference Call – Occidental Petroleum Corp – slide 11
    Fourth Quarter Earnings Capital p Spending p g 2013 Actual & 2014 Estimate 2014 capital program expected to be 10.2 billion* Increase in capital includes 400 mm Capital Investment ( bln) ll t d tto each allocated h off our CA…
  12. Q4 2013 Earnings Conference Call – Occidental Petroleum Corp – slide 12
    Fourth Quarter Earnings Capital p Spending p g 2013 Actual & 2014 Estimate 2014E Capital - 10.2 Billion* Midstream capital will increase 100 mm as a result of spending on the BridgeTex pipeline pp and two new terminals at…
  13. Q4 2013 Earnings Conference Call – Occidental Petroleum Corp – slide 13
    Fourth Quarter 2013 Earnings 2014 Production Outlook Total Company* We expect our 2014 total company 780 - 790 production volumes to grow to 763 780 - 790 mboe/d vs. 763 mboe/d in Mboe/d d 2013, with a 4Q14 exit rate of…
  14. Q4 2013 Earnings Conference Call – Occidental Petroleum Corp – slide 14
    Fourth Quarter 2013 Earnings 2014 Production Outlook While the elements of the 2014 program as discussed assume no changes to the Company structure or its mix off assets, t we dod expectt the th Company C to t look l k…
  15. Q4 2013 Earnings Conference Call – Occidental Petroleum Corp – slide 15
    Fourth Quarter 2013 Earnings Long-term g Growth Investments Some of the longer lead time investments we have been making over the past couple of years will start contributing t our results to lt this thi year. Specifically:…
  16. Q4 2013 Earnings Conference Call – Occidental Petroleum Corp – slide 16
    Fourth Quarter 2013 Earnings Strategic Review With respect to the initiatives outlined in the first phase of the Companys strategic review announced last year: We completed the sale of a portion of the Companys investment in the…
  17. Q4 2013 Earnings Conference Call – Occidental Petroleum Corp – slide 17
    Fourth Quarter 2013 Earnings Capitalization In 4Q13, we used the Plains proceeds to retire 625 mm of debt, reducing our debt load by 9%, and to purchase almost 10 mm shares h off th the Companys C stock t k with ith a cashh…
  18. Q4 2013 Earnings Conference Call – Occidental Petroleum Corp – slide 18
    Fourth Quarter 2013 Earnings Summary At the Boards February meeting we will review the Companys dividend policy, status of the strategic alternatives and share repurchase h authority. th it Many of the steps we have taken in…
  19. Q4 2013 Earnings Conference Call – Occidental Petroleum Corp – slide 19
    Fourth Quarter 2013 Earnings Permian Basin & California Oil & Gas Operations p 2014 Operational Objectives Continue the development of anchor projects, enabling the allocation of significant portions of capital to projects with solid…
  20. Q4 2013 Earnings Conference Call – Occidental Petroleum Corp – slide 20
    Fourth Quarter 2013 Earnings Permian Basin Permian Basin Capital Two business units named as: ( in mm) Permian EOR: CO2 and waterfloods. 2,190 Permian Resources: growth 1,722 oriented unconventional. 1,530 The entire 450 mm…
  21. Q4 2013 Earnings Conference Call – Occidental Petroleum Corp – slide 21
    Fourth Quarter 2013 Earnings Permian Basin Production We expect the Permian EOR business 222 211 to offset its decline in 2014 and grow 1 4% 1.4%. The Permian Resources business is mboe/d expected to grow oil production faster…
  22. Q4 2013 Earnings Conference Call – Occidental Petroleum Corp – slide 22
    Fourth Quarter 2013 Earnings Permian Resources Shift to Horizontal Drilling Drilled 49 horizontal wells with 47 completed and producing. D l tW Development ll Wells Improvements in well costs, our own results and those of Horizontal…
  23. Q4 2013 Earnings Conference Call – Occidental Petroleum Corp – slide 23
    Fourth Quarter 2013 Earnings Permian Resources Acreage in Select Permian Plays (Thousands of Acres) Delaware Basin Gross Net Believe we have one of the most p promisingg and Avalon 365 130 under-exploited unconventional portfolio in the…
  24. Q4 2013 Earnings Conference Call – Occidental Petroleum Corp – slide 24
    Fourth Quarter 2013 Earnings Permian Resources Permian Basin Plays We see the largest near-term growth in the Matador Arch Midland Basin, which represents 2/3 of our currently y assessed resource p potential. Northwest Shelf…
  25. Q4 2013 Earnings Conference Call – Occidental Petroleum Corp – slide 25
    Fourth Quarter 2013 Earnings Permian Resources Cost Reductions Expand Opportunity Set The success of our capital p and With operating cost efficiency efforts 2012 2013 Cost in 2013, has also enabled us to Benchmark Reductions…
  26. Q4 2013 Earnings Conference Call – Occidental Petroleum Corp – slide 26
    Fourth Quarter 2013 Earnings Permian Resources 2014E Capital - 1.6 Billion Unconventional Acreage Strategy 1. Exploration to establish the presence of a commercial resource resource. 2. Testing and data gathering to optimize well…
  27. Q4 2013 Earnings Conference Call – Occidental Petroleum Corp – slide 27
    Fourth Quarter 2013 Earnings Permian Resources Midland Basin 2014E Capital 790 mm Average Rigs 8 Texas 2014 Wells 147 Horizontal Wells 74 Drilled 16 horizontal wells to date. Largest g opportunity pp y is in the Wolfcamp p Shale…
  28. Q4 2013 Earnings Conference Call – Occidental Petroleum Corp – slide 28
    Fourth Quarter 2013 Earnings Permian Resources Texas Delaware Basin 2014E Capital 370 mm Average Rigs 5 2014 Wells 91 New Mexico Horizontal Wells 48 Horizontal o o ta act activity ty focused ocused o on Texas Wolfcamp where we…
  29. Q4 2013 Earnings Conference Call – Occidental Petroleum Corp – slide 29
    Fourth Quarter 2013 Earnings Permian Resources New Mexico Permian 2014E Capital 370 mm Average Rigs 4 2014 Wells 97 Horizontal Wells 50 Bone Spring formation in New Mexico is the second largest opportunity in our portfolio behind…
  30. Q4 2013 Earnings Conference Call – Occidental Petroleum Corp – slide 30
    Fourth Quarter 2013 Earnings Permian EOR Permian EOR SLAUGHTER (CVX) IRISH COCHRAN HOCKLEY LUBBOCK CROSBY DICKE Business unit is a combination of IGOE SMITH LEVELLAND LUBBOCK water and CO2 floods. NM HT BOYD SLAUGHTER…
  31. Q4 2013 Earnings Conference Call – Occidental Petroleum Corp – slide 31
    Fourth Quarter 2013 Earnings Permian Basin Exploration Over the last several years the focus of our Permian exploration program has been to identify unconventional opportunities, which are then transitioned to full field development…
  32. Q4 2013 Earnings Conference Call – Occidental Petroleum Corp – slide 32
    Fourth Quarter 2013 Earnings Permian Summary Permian Basin Overall Strategy for Success 1 Maximize field resource potential 1. Targeted use of horizontal & vertical drilling, optimizing development and completion plans, infrastructure…
  33. Q4 2013 Earnings Conference Call – Occidental Petroleum Corp – slide 33
    Fourth Quarter 2013 Earnings Permian Summary Significant Position with Key Competitive Advantages More than 2.5 billion BOE in reserves and potential resources with 15+ years of development and growth opportunities. Flexibility to…
  34. Q4 2013 Earnings Conference Call – Occidental Petroleum Corp – slide 34
    Fourth Quarter 2013 Earnings Permian Summary Growth Outlook Significant cash flow from Permian EOR to fuel growth. Plan to double drilling rigs over next 3 years to accelerate development of the Permian Resources unit growth…
  35. Q4 2013 Earnings Conference Call – Occidental Petroleum Corp – slide 35
    Fourth Quarter 2013 Earnings Permian Summary Growth Outlook Significant cash flow from Permian EOR to fuel growth. Plan to double drilling rigs over next 3 years to accelerate growth in Permian Resources. Production Permian EOR…
  36. Q4 2013 Earnings Conference Call – Occidental Petroleum Corp – slide 36
    Fourth Quarter 2013 Earnings California Overview 2013 main goals were to: deliver a predictable outcome. advance low-risk projects that contribute to long-term growth . reduce the cost structure. lower the base decline. create a…
  37. Q4 2013 Earnings Conference Call – Occidental Petroleum Corp – slide 37
    Fourth Quarter 2013 Earnings California 2013 Production of 154 mboe/d and free cash flow of 1.3 billion after capital. P Progressedd development d l t off steam t floods fl d ini Kern K Front F t and d Lost L t Hills, Hill…
  38. Q4 2013 Earnings Conference Call – Occidental Petroleum Corp – slide 38
    Fourth Quarter 2013 Earnings California Capital p Program g Focus on low-decline projects. California 2014 Capital - 1.9 bn 2014 Goals A Accelerate l t the th rate t off production d ti growth. th Maintain the lower cost…
  39. Q4 2013 Earnings Conference Call – Occidental Petroleum Corp – slide 39
    Fourth Quarter 2013 Earnings California Operations p Water Floods LA Basin 2014 Capital of 500 mm Wilmington Field Drilled 135 wells and will increase 7% to 145 wells in 2014. Horizontal program was particularly strong strong,…
  40. Q4 2013 Earnings Conference Call – Occidental Petroleum Corp – slide 40
    Fourth Quarter 2013 Earnings California Operations p Steam Floods Heavy Oil Key focus area in 2013 and will be again in 2014. We plan to spend 350 mm to drill about 420 wells in 2014, compared to 324 wells in 2013, to continue…
  41. Q4 2013 Earnings Conference Call – Occidental Petroleum Corp – slide 41
    Fourth Quarter 2013 Earnings California Operations p Elk Hills Elk Hills Key objective is to lower the high decline rate; significant progress toward this goal. 2014 capital of 600 mm to drill 325 wells, an increase of 170 mm over…
  42. Q4 2013 Earnings Conference Call – Occidental Petroleum Corp – slide 42
    Fourth Quarter 2013 Earnings California Operations p Exploration p Exploration Solid res results lts for o over er 5 years. ears The 2014 California program will continue to explore both unconventional and conventional…
  43. Q4 2013 Earnings Conference Call – Occidental Petroleum Corp – slide 43
    Fourth Quarter 2013 Earnings California Production Production Outlook Capital shift to lower decline and lower risk steam and water flood projects. We believe we can grow production 190 from 154 mboe/d to 190 mboe/d in 2016, a…
  44. Q4 2013 Earnings Conference Call – Occidental Petroleum Corp – slide 44
    Fourth Quarter 2013 Earnings California Production Shift in California Production Mix Over the long-term long-term, we expect our 154 148 California growth prospects to 139 138 benefit from changes in our asset 134 mix. 69 70…
  45. Q4 2013 Earnings Conference Call – Occidental Petroleum Corp – slide 45
    Fourth Quarter 2013 Earnings California Production Shift in California Production Mix Liquids Production 110 105 Sh Share off production d ti ffrom Elk Hill Hills 95 and Long Beach has declined from 92 92 64% in 2009 to 44% in…
  46. Q4 2013 Earnings Conference Call – Occidental Petroleum Corp – slide 46
    Fourth Quarter 2013 Earnings - Appendix 4Q13 & FY2013 FINANCIAL & OPERATING DATA,, VARIANCES & GUIDANCE 46
  47. Q4 2013 Earnings Conference Call – Occidental Petroleum Corp – slide 47
    Fourth Quarter 2013 Earnings Highlights Results Domestic oil p production (Bbl/d) ( ) 270,000 , Total production (Boe/d) 750,000 Exceeded Target Operating p g costs 8% R Reduction d ti Capital program Exceeded Target 24%…
  48. Q4 2013 Earnings Conference Call – Occidental Petroleum Corp – slide 48
    Fourth Quarter 2013 Earnings Highlights 4Q13-Over-3Q13 Impacts Core Income* ( in bln) Lower oil and gas results 1.6 1.5 - Lower U.S. oil prices 1.4 - Lower NGLs and natural gas sales volumes + Higher MENA oil prices + Higher oil…
  49. Q4 2013 Earnings Conference Call – Occidental Petroleum Corp – slide 49
    Fourth Quarter 2013 Earnings Oil & Gas Segment Earnings 4Q13 vs. 3Q13 2,363 ( in millions) (168) 10 (46) (7) (42) 8 2,118 Core Results 2Q13 2.1 B 3Q13 2.4 B 4Q12 2.3 B 3Q13 Sales Price Sales Volumes Higher Higher DD&A…
  50. Q4 2013 Earnings Conference Call – Occidental Petroleum Corp – slide 50
    Fourth Quarter 2013 Earnings Oil and Gas Total Production Company-wide Oil & Gas Production (mboe/d) Severe winter weather caused significant damage to infrastructure and logistics capability that has continued co t ued to sosomewhat e…
  51. Q4 2013 Earnings Conference Call – Occidental Petroleum Corp – slide 51
    Fourth Quarter 2013 Earnings Oil and Gas Domestic Production Domestic Oil & Gas Production (mboe/d) 3 (6) 475 476 (3) 470 4Q12 3Q13 Oil NGLs Natural Gas 4Q13 51
  52. Q4 2013 Earnings Conference Call – Occidental Petroleum Corp – slide 52
    Fourth Quarter 2013 Earnings Oil & Gas Realized Prices Realized Prices Benchmark Prices Worldwide Worldwide Domestic Nat. Oil ((/bbl)) NGLs ((/bbl)) Gas ((/mmbtu)) WTI Brent NYMEX 4Q13 99.27 44.69 3.33 97.46 109.35 3.64 WTI % 102%…
  53. Q4 2013 Earnings Conference Call – Occidental Petroleum Corp – slide 53
    Fourth Quarter 2013 Earnings Oil & Gas Production Costs & Taxes Production Costs (/boe) FY12 1Q13 2Q13 3Q13 4Q13 FY13 Domestic 17.43 14.06 14.28 14.65 14.74 14.43 Total 14 99 13 14.99 13.93 93 13 13.40 40 13 13.60 60 14 13…
  54. Q4 2013 Earnings Conference Call – Occidental Petroleum Corp – slide 54
    Fourth Quarter 2013 Earnings Chemical Segment Core Earnings 4Q13 vs. 3Q13 Guidance 181 (35) ( in millions) 1Q14 expected t be to b 100 100 mm (4) (4) (10) 128 Core Results 4Q13 128 mm 3Q13 181 mm 4Q12 180 mm 3Q13…
  55. Q4 2013 Earnings Conference Call – Occidental Petroleum Corp – slide 55
    Fourth Quarter 2013 Earnings Midstream Segment Earnings 4Q13 vs. 3Q13 Core Results ( in millions) 4Q13 68 mm 212 (84) 3Q13 212 mm 4Q12 75 mm (30) (39) 9 68 3Q13 Marketing & Power Gas Processing Pipelines 4Q13 Trading…
  56. Q4 2013 Earnings Conference Call – Occidental Petroleum Corp – slide 56
    Fourth Quarter 2013 Earnings FY 2013 Cash Flow 600 (8,800) 13,900 FY 2013 ( in millions) FY13 Debt / Capital 14% Return on Equity 14% Cash Flow From Return on Capital Employed* Employed 12% Operations before 1,670 (645)…
  57. Q4 2013 Earnings Conference Call – Occidental Petroleum Corp – slide 57
    Fourth Quarter Earnings Capital Spending 2013 Actual & 2014 Estimate Long-term investment 25% + Long-term investment 20% + Americas Oil &Gas Americas Oil &Gas Exploration Exploration 5% 51% 6% 53% Chemicals & Permian Chemicals &…
  58. Q4 2013 Earnings Conference Call – Occidental Petroleum Corp – slide 58
    Fourth Quarter 2013 Earnings 2014 Capital Estimate Domestic Oil & Gas Domestic Oil & Gas development capital will be 49% of our total 61 it l program. capital Permian rig count to increase 60 Counts slightly as we swap…
  59. Q4 2013 Earnings Conference Call – Occidental Petroleum Corp – slide 59
    Fourth Quarter 2013 Earnings 2014 Capital Estimate International Total Al Hosn Gas Project capital should decline 20% from the 2013 levels and will make up 7% of our total capital program for 2014 levels, 2014. Qatar capital spending…
  60. Q4 2013 Earnings Conference Call – Occidental Petroleum Corp – slide 60
    Fourth Quarter 2013 Earnings 1Q14 & FY 2014 Guidance Summary Oil & Gas Segment* 2014 Total Production Pre-tax Income Price Sensitivity Impact (Quarter) of 780 - 790 Mboe/d. Domestic FY 2014 Oil +/- 1/bbl = +/- 38 mm Oil 280 - 295…
  61. Q4 2013 Earnings Conference Call – Occidental Petroleum Corp – slide 61
    Fourth Quarter 2013 Earnings Conference Call Q&A

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