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Q1 2016 Earnings Call – Occidental Petroleum Corp

Occidental Petroleum Corp · May 5, 2016 · 33 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. Q1 2016 Earnings Call – Occidental Petroleum Corp – slide 1
    OCCIDENTAL PETROLEUM CORPORATION First Quarter 2016 Earnings Conference Call May 5, 2016
  2. Q1 2016 Earnings Call – Occidental Petroleum Corp – slide 2
    First Quarter 2016 Key Messages Full-cycle cost leadership Cost structure continues to improve Optimal capital allocation On track for 3 billion 2016 capital budget Superior balance sheet Extended debt maturities, 3.2 billion of…
  3. Q1 2016 Earnings Call – Occidental Petroleum Corp – slide 3
    First Quarter 2016 Core Production Growth Total Oil Production* Total Company Production* (MBOD) (MBOED) 590 397 371 531 1Q2015 1Q2016 1Q2015 1Q2016 * Ongoing operations; excludes Williston, Piceance, Iraq, Bahrain,…
  4. Q1 2016 Earnings Call – Occidental Petroleum Corp – slide 4
    First Quarter 2016 Improved Cost Structure Production Costs* Overhead (SG&A) (/boe) ( in millions) Expect continued 1,270 improvement in cost 13.36 structure 1,088 Strategic Initiatives Lower workovers 10.28 Lower downhole…
  5. Q1 2016 Earnings Call – Occidental Petroleum Corp – slide 5
    First Quarter 2016 2016 Production Outlook Increased Increased FY 2016 production guidance from 570 - 585 to 585 - 600 MBOED Expect total production from core assets to grow 4% - 6% over 2015 levels The increase in guidance is due to…
  6. Q1 2016 Earnings Call – Occidental Petroleum Corp – slide 6
    First Quarter 2016 Earnings Capital Program 2016 Capital Budget ( in millions) On track to meet 3 billion capital budget 687 Shifting capital to longer duration Permian projects in Permian EOR to modify Resources and expand CO2…
  7. Q1 2016 Earnings Call – Occidental Petroleum Corp – slide 7
    First Quarter 2016 Core Results Results Total oil production (Bbl/d) 397,000 7% year / year growth* Total ongoing production (BOED) 590,000 Core results** (426) million Core diluted EPS** (0.56) 1Q16 CFFO before Working…
  8. Q1 2016 Earnings Call – Occidental Petroleum Corp – slide 8
    First Quarter 2016 Oil and Gas Total Company Production - Reported In 1Q 2016, total company oil and gas production volumes averaged 657,000 BOED, a decrease of 23,000 BOE in daily production from 4Q 2015 due to planned maintenance,…
  9. Q1 2016 Earnings Call – Occidental Petroleum Corp – slide 9
    First Quarter 2016 Oil and Gas Total Company Production Ongoing Operations In 1Q 2016, total company oil and gas production volumes averaged 590,000 BOED, a decrease of 7,000 BOE in daily production from 4Q 2015. Company-wide Oil &…
  10. Q1 2016 Earnings Call – Occidental Petroleum Corp – slide 10
    First Quarter 2016 Oil and Gas Domestic Production Domestic oil production grew 7,000 Bbls/D in 1Q 2016 with Permian Resources up 8,000 Bbls/D. Domestic Oil & Gas Production* (MBOED) (1) 3 307 7 298 290 1Q15 4Q15 Oil…
  11. Q1 2016 Earnings Call – Occidental Petroleum Corp – slide 11
    First Quarter 2016 Oil & Gas Realized Prices Realized Prices Benchmark Prices Worldwide Worldwide Domestic Nat. Oil (/bbl) NGLs (/bbl) Gas (/mmbtu) WTI Brent NYMEX 1Q16 29.42 10.86 1.50 33.45 35.08 2.07 WTI % 88% 32% 73%* Brent %…
  12. Q1 2016 Earnings Call – Occidental Petroleum Corp – slide 12
    First Quarter 2016 YTD 2016 Cash Flow 1Q 2016 ( in millions) 820 (680) 1Q16 (690) Debt / Capital 24% (570) (700) 600 4,400 3,180 Beginning Cash CFFO Before Change in Capital Dividends Debt Retirement Asset Sale Ending…
  13. Q1 2016 Earnings Call – Occidental Petroleum Corp – slide 13
    First Quarter 2016 Debt Maturity Schedule New issuances extended the dollar-weighted average maturity of debt by over 5 years. Rating Outlook S&P A Stable Fitch A Stable million Retired / Called maturities Moodys A3 Stable…
  14. Q1 2016 Earnings Call – Occidental Petroleum Corp – slide 14
    First Quarter 2016 Recent Issuances of Ten-Year Bonds Oxy issued 2.75 billion of senior notes in April 2016, including a 10-year tranche (1.15 billion) with a coupon of 3.40%. 5.85% 5.55% 4.95% 4.45% 4.15% 3.33% 3.40%…
  15. Q1 2016 Earnings Call – Occidental Petroleum Corp – slide 15
    First Quarter 2016 Earnings Capital Program On track to meet 3 billion 2016 2016 Capital Budget budget. ( in millions) 687 Total company capital expenditures for the 1Q16 were 687 million, and we expect our quarterly expenditures…
  16. Q1 2016 Earnings Call – Occidental Petroleum Corp – slide 16
    First Quarter 2016 Total Spend per BOE Capital Spending + G&A + All Operating Costs Total Spend per BOE = Global Oil & Gas Sales Volumes Internal performance metric to focus on operational efficiency, especially in consideration…
  17. Q1 2016 Earnings Call – Occidental Petroleum Corp – slide 17
    First Quarter 2016 FY 2016 Production Outlook Core Assets FY 2016 Total Production Outlook Core Assets (Excludes Iraq, Bahrain, Yemen, Williston & Piceance) Total volumes of 585,000 600,000 BOED 2Q16 Total Production Outlook…
  18. Q1 2016 Earnings Call – Occidental Petroleum Corp – slide 18
    First Quarter 2016 1Q16 & FY 2016 Guidance Summary Oil & Gas Segment DD&A FY 2016E FY 2016E Total Production Core Assets Oil & Gas: 15.00 / BOE 585,000 600,000 BOED Chemicals and Midstream: 670 mm 2Q16E Production Core Assets…
  19. Q1 2016 Earnings Call – Occidental Petroleum Corp – slide 19
    First Quarter 2016 Earnings Permian Resources Production Total production grew 31% year- over-year to 128 MBOED. Oil NGL Gas 128 Oil production grew 35% 118 110 year-over-year to 84 MBOD. 75 We have leveraged and 64…
  20. Q1 2016 Earnings Call – Occidental Petroleum Corp – slide 20
    First Quarter Earnings 2016 TX Delaware Basin Recent Performance Optimization Efforts: Wolfcamp A Continue to test more aggressive completions Tighter cluster spacing Higher clusters per stage Increased proppant concentration…
  21. Q1 2016 Earnings Call – Occidental Petroleum Corp – slide 21
    First Quarter Earnings 2016 Permian Resources Manufacturing Mode: Drilling / Completions Move to Manufacturing Mode Significantly Reduced Well Cost WELL COST DRILL DAYS Delaware Wolfcamp A 4,500 Delaware Wolfcamp A 4,500 HZ HZ 12.0…
  22. Q1 2016 Earnings Call – Occidental Petroleum Corp – slide 22
    First Quarter Earnings 2016 Southeast New Mexico Recent Performance Well Performance: New Mexico 2nd Bone Spring Cedar Canyon 27 Fed Com 7H three month cumulative production of 135 Mboe 81% oil Cedar Canyon 28 Fed Com 7H three month…
  23. Q1 2016 Earnings Call – Occidental Petroleum Corp – slide 23
    First Quarter Earnings 2016 Southeast New Mexico Recent Performance Completion optimization efforts have significantly increased value Increased proppant to 1,500 lbs/ft Testing up to 2,000 lbs/ft New Design 4 Wells 78% Oil…
  24. Q1 2016 Earnings Call – Occidental Petroleum Corp – slide 24
    First Quarter Earnings 2016 East Midland Basin Recent Performance Well Performance: East Midland - Wolfcamp A Adams 4231WA six month cumulative production of 220 Mboe 91% oil We believe its the most productive well drilled in Howard…
  25. Q1 2016 Earnings Call – Occidental Petroleum Corp – slide 25
    First Quarter Earnings 2016 Permian Resources Manufacturing Mode: Drilling / Completions Move to Manufacturing Mode Significantly Reduced Well Cost WELL COST DRILL DAYS East Midland East Midland Wolfcamp A 7,500' Hz Wolfcamp A 7,500…
  26. Q1 2016 Earnings Call – Occidental Petroleum Corp – slide 26
    First Quarter Earnings 2016 Permian Resources Base Management and Surveillance Focus on maximizing production from existing wells Extensive base surveillance and monitoring Re-deployed engineers from Houston to field offices…
  27. Q1 2016 Earnings Call – Occidental Petroleum Corp – slide 27
    First Quarter Earnings 2016 Permian Resources Continued Opex Reduction Permian Resources Opex/BOE Continued focus on reducing 15.00 field operating costs during 13.02 2016 11.41 10.87 Downhole expense /boe 10.00 9.74 reduced 36%…
  28. Q1 2016 Earnings Call – Occidental Petroleum Corp – slide 28
    First Quarter 2016 Permian EOR CO2 Supply & Processing Stable and low-decline base production at an advantaged cost Permian EOR business remains profitable in the current downturn EOR business expected to generate free cash flow…
  29. Q1 2016 Earnings Call – Occidental Petroleum Corp – slide 29
    First Quarter 2016 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 Kinder Morgan…
  30. Q1 2016 Earnings Call – Occidental Petroleum Corp – slide 30
    First Quarter 2016 Permian EOR Cash Operating Expense (/BOE) 25.00 Improvement in well 20.82 maintenance job productivity 20.03 20.00 sustained into Q1 18.16 18.36 16.46 16.49 15.00 Surface costs negatively /BOE impacted…
  31. Q1 2016 Earnings Call – Occidental Petroleum Corp – slide 31
    First Quarter 2016 South Hobbs: CO2 Flood and Expansion Areas Main Oil Column CO2 Flood: Residual Oil Zone (ROZ) Potential: Started CO2 injection into Phase 1 in September Four pattern initial development to begin in 2016 2015 (ahead…
  32. Q1 2016 Earnings Call – Occidental Petroleum Corp – slide 32
    First Quarter 2016 Residual Oil Zone Development The ROZ development is a vertical expansion of the CO2 flooded interval. Utilize work-over rigs to drill the extra depth into additional CO2 floodable sections of the reservoir. The ROZ…
  33. Q1 2016 Earnings Call – Occidental Petroleum Corp – slide 33
    First Quarter 2016 2016 Permian Strategy Given the current oil price environment, we will focus on investment to achieve four core goals: Accelerate geoscience, characterization and modeling programs to enhance recovery, productivity…

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