OCCIDENTAL PETROLEUM CORPORATION Vicki A. Hollub President & CEO UBS Global Oil and Gas Conference 2016 May 25, 2016 Vicki A. Hollub
Why own Oxy Large Integrated Majors Independent E&Ps Company Market Cap (B) Company Market Cap (B) XOM 372 COP 54 RDS 197 Oxy EOG 45 CVX 188 Uniquely PXD 27 TOT 120 Positioned APC 25 BP 98 APA 22 ENI 55 DVN 18 Characteristics…
Keys to Success Balance Sheet Strength Diverse Portfolio Ended 1Q16 with 3.2 Billion Long life cash flow assets cash Significant growth potential Debt of 7.6 Billion (24% 5% 8 % long-term debt to capitalization ratio) Flexibility to…
Cash Flow Priorities 1. Base/Maintenance Capital 2. Dividends 3. Growth Capital 4. Share Repurchase 5. Acquisitions 4
History Of Returning Cash To Shareholders ( in Billions) Share Period ending 2015 Cash Dividends Repurchases Combined 3 years 6.0 4.0 10.1 5 years 9.6 4.9 14.5 10 years 14.2 9.1 23.3 Additionally, over the 10 years ending…
Oxy Runs A Focused Business Oil and Gas Focus Areas United States Leading position OxyChem in the Permian Basin. High FCF, moderate Permian Resources growth business. is a growth driver. Oxy Midstream Al Hosn Project, Integrated…
Total Spend Per Barrel Capital Spending + G&A + All Operating Costs Total Spend per Barrel = Global Oil & Gas Sales Volumes Internal performance metric to focus on operational efficiency, especially in consideration of the sharp…
2016 Capital Outlook 2016 Capital Budget ( in bln) Carefully reduce activity levels without harming the 5.6 strong progress on growth prospects Fund only those 2.8 - 3.0 opportunities that exceed hurdle rates of return 2016 plan…
Committed Project Capital Declining Committed Project Capital Multiple long-term ( in millions) investments to drive cash 1,300 flow and earnings growth Al Hosn Ethylene cracker JV 800 Ingleside terminal Gas processing 500 Capital…
Permian Basin Is The Core Domestic Asset EOR Business 2015 Production - 145 MBOEPD 1 million net acres 1.9 Billion BOE remaining in reserves and resources Resources (Unconventional) 2015 Production 110 BMOEPD 1.5 million net…
Oxy is the Largest Permian Basin Producer 10% 50% 75% 350 NET MBOEPD OPERATED PRODUCTION Cumulative Gas Liquids Average % of total 300 3.1 million BOEPD 250 200 150 100 50 - Source: Wood Mackenzie,…
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 and field economic…
Permian Resources Summary 1.5 million net acre position 2016 Focus Areas Shorter cycle faster growth Significant improvements in capital execution efficiency and reduction in operating expenses Will run 2-4 drilling rigs in…
Permian Resources Drilling Inventory Continuing to lower economic hurdle points through reservoir characterization and optimization, improved productivity, reduced well costs, and faster time to market 100% Total of 8,500 locations…
Permian Resources Production Total production grew 31% year-over-year to 128 Oil NGL Gas MBOED. 128 Oil production grew 35% 118 year-over-year to 84 110 MBOD. We have leveraged and 75 extended our industry 64 leading practices…
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 Evaluating cluster spacing and…
Permian Resources Manufacturing Mode Delaware Wolfcamp A 4,500 HZ East Midland Wolfcamp A 7,500 HZ 10.9 Drilling 9.2 Drilling Completions Completions WELL COST MM WELL COST MM 5.6 6.1 6.3 5.5 5.3 5.4 3.4 3.8 2.7 3.4 5.3 3.7…
Permian Resources Continued Opex Reduction Permian Resources Opex/BOE Continued focus on 15.00 reducing field operating 13.02 costs during 2016 11.41 10.87 Downhole expense 9.74 /boe reduced 36% from 10.00 8.72 Q1 2015 Company…
Permian EOR Strategy CO2 Supply & Processing 1.0 million net acres Shift more capital to longer-cycle EOR to take advantage of lower cost of materials and services Inventory includes projects that have F&D costs of 3-12/BOE…
World Leader in CO2 Enhanced Oil Recovery U.S. CO2 EOR Projects Size of bubble = CO2 EOR Production Volume 3,500 Number of Injection Wells 3,000 Occidental 2,500 2,000 Inject 1.9 billion cubic feet a day 1,500 Kinder…
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 2.7 30 25 4.0 25 4.7 1.8…
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 underlies most of…
Middle East Summary Middle East Footprint Reduced footprint in the Middle East. Qatar Strategy is to grow businesses in UAE the core countries of UAE, Oman and Qatar. Oman Focus Areas Oxy has stopped investment in Libya, Yemen,…
Chemicals Ethylene Cracker Update Average annual Chemicals EBIT of MexiChem Ethylene Cracker JV almost 600 Million over last three years with earnings and cash flow growth expected from the start-up of the Ingleside Ethylene Cracker.…
Summary Key to Success / Strengths A key to long term success is to take advantage of this downturn to improve our future: Major cost structure changes Data Analytics Further advances in improved recovery Technology (new or…
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