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4Q 2016 Earnings Conference Call – Occidental Petroleum Corp

Occidental Petroleum Corp · Feb 9, 2017 · 54 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. 4Q 2016 Earnings Conference Call – Occidental Petroleum Corp – slide 1
    Fourth Quarter 2016 Earnings Conference Call Occidental Petroleum Corporation February 9, 2017
  2. 4Q 2016 Earnings Conference Call – Occidental Petroleum Corp – slide 2
    Occidental Petroleum Key Messages and Strategy 2016 Highlights 2017 Outlook 3
  3. 4Q 2016 Earnings Conference Call – Occidental Petroleum Corp – slide 3
    Key Message and Strategy Overriding Goal is to Maximize Total Shareholder Return We believe this can be achieved through a combination of: Consistent, annual dividend growth Value growth through oil and gas development that meets the…
  4. 4Q 2016 Earnings Conference Call – Occidental Petroleum Corp – slide 4
    Oil and Gas Core Areas Focused Businesses OxyChem United States High FCF, moderate Leading position in the Permian growth business Permian Resources is a growth driver Midstream Integrated infrastructure and marketing Middle East…
  5. 4Q 2016 Earnings Conference Call – Occidental Petroleum Corp – slide 5
    Oman Oman Improved Reservoir Surveillance 140 Oman - Mukhaizna Gross Production (Mbopd) Mukhaizna Infill and shallow drilling 135 programs 130 Record Monthly 125 Production 2016 Total Spend per Barrel 120 79% reduced by 24% 115…
  6. 4Q 2016 Earnings Conference Call – Occidental Petroleum Corp – slide 6
    Colombia Colombia Improved subsurface reservoir characterization Focused Workover and Drilling Campaign LCI* New Well Costs reduced by 35% Increased gross 2016 Total Spend per barrel reduced by 25% production by 5 79% Proved…
  7. 4Q 2016 Earnings Conference Call – Occidental Petroleum Corp – slide 7
    Al Hosn Gas Al Hosn Gas Optimized plant to deliver more capacity Completed operational trials Increased Minimal capital was required Plant Capacity to 110% 2017 production expected to be 70 MBOED 8
  8. 4Q 2016 Earnings Conference Call – Occidental Petroleum Corp – slide 8
    Occidental Petroleum Key Messages and Strategy 2016 Highlights 2017 Outlook 9
  9. 4Q 2016 Earnings Conference Call – Occidental Petroleum Corp – slide 9
    2016 Highlights Low-cost Production Growth Exceeds Target 7% 189% 9.65 Production Growth Total Company Total Company All- Capital Program Under FY 2016 Reserve Replacement Sources F&D 3 billion Target Ratio Strong Balance Sheet and…
  10. 4Q 2016 Earnings Conference Call – Occidental Petroleum Corp – slide 10
    Production Total Company Production* Permian Resources Production Growth (MBOED) (MBOED) Exceeded Guidance 7% Growth Y/Y 13% Growth Y/Y 124 602 565 110 2015 2016 2015 2016 * Ongoing operations; excludes Piceance, Iraq and…
  11. 4Q 2016 Earnings Conference Call – Occidental Petroleum Corp – slide 11
    2016 Accomplishments - Total Spend per BOE Achieved Target Capital Spending* + G&A + All Operating Costs Total Spend per BOE = Global Oil & Gas Sales Volumes Internal performance metric to focus on 62.00 operational efficiency,…
  12. 4Q 2016 Earnings Conference Call – Occidental Petroleum Corp – slide 12
    2016 Reserve Additions Through Reservoir Performance Total 505 MMBOE Reserve Additions prior to price revisions Company 91 2,406 Reserve 346 Replacement 2,200 (231) 2016 77% Proved Developed 189% All In 74% Liquids 150%…
  13. 4Q 2016 Earnings Conference Call – Occidental Petroleum Corp – slide 13
    Improved Margins in Permian Resources Attracting Investment Permian Resources Cost Structure 16 - 19 / boe Improved productivity and lower well costs in Permian Resources drive improved profitability Pre-tax margins 50% at 50 /…
  14. 4Q 2016 Earnings Conference Call – Occidental Petroleum Corp – slide 14
    Occidental Petroleum Key Messages and Strategy 2016 Highlights 2017 Outlook 15
  15. 4Q 2016 Earnings Conference Call – Occidental Petroleum Corp – slide 15
    2017 Capital Plan Will Deliver 4% to 7% Production Growth Flexible Capital Program Domestic ( in billions) Increased Permian Resources drilling in SE New Mexico and Greater Barilla Draw Short cycle development allows for flexibility…
  16. 4Q 2016 Earnings Conference Call – Occidental Petroleum Corp – slide 16
    Cash Flow 1. Base/Maintenance Capital Priorities Favor Dividends 2. Dividends 3. Growth Capital Subject to Returns and 4. Acquisitions Market Conditions 5. Share Repurchases 17
  17. 4Q 2016 Earnings Conference Call – Occidental Petroleum Corp – slide 17
    Financial Highlights 2016 Results 2017 Guidance 18
  18. 4Q 2016 Earnings Conference Call – Occidental Petroleum Corp – slide 18
    Core Results Fourth Quarter 2016 Results Total production (BOED) 607,000 Core results* (97) million Core diluted EPS* (0.13) 4Q16 CFFO before Working Capital & Other 998 million 4Q16 Capital Expenditures* 891 million Cash…
  19. 4Q 2016 Earnings Conference Call – Occidental Petroleum Corp – slide 19
    Oil and Gas 4 Core Production (MBOED) 605 (2) 0 607 Company-wide Oil & Gas Production In 4Q 2016, total company oil and gas production volumes averaged 607,000 BOED, an increase of 2,000 3Q16 Permian Other Domestic…
  20. 4Q 2016 Earnings Conference Call – Occidental Petroleum Corp – slide 20
    FY 2016 Cash Flow ( in billions) 3.6 (0.9) (2.9) (2.3) 4.4 1.5 (1.7) 2.2 Beginning Cash CFFO Before Change in Working Capital Dividends Debt Asset Purchases & Ending Cash Balance 1/1/16 Working Capital Capital…
  21. 4Q 2016 Earnings Conference Call – Occidental Petroleum Corp – slide 21
    Financial Highlights 2016 Results 2017 Guidance 22
  22. 4Q 2016 Earnings Conference Call – Occidental Petroleum Corp – slide 22
    Free Cash Flow Improvement Improved market conditions, project start-ups and lower capital should increase free cash flow generation in 2017 2017 vs 2016 FCF Improvement International O&G 400 MM Midstream 150 - 200 MM Chemicals…
  23. 4Q 2016 Earnings Conference Call – Occidental Petroleum Corp – slide 23
    Cash Flow Improvements Expected in 2017 Improved product prices Annualized cash flow changes 100 million for a 1.00 / barrel change in oil prices Annualized cash flow changes 45 million for a 0.50 / Mmbtu change in natural gas…
  24. 4Q 2016 Earnings Conference Call – Occidental Petroleum Corp – slide 24
    1Q17 and FY 2017 Guidance Summary Oil & Gas Segment DD&A FY 2017E Oil & Gas: 15.00 / BOE FY 2017E Total Production Chemicals and Midstream: 685 mm 625,000 645,000 BOED Permian Resources production of 140,000 150,000 BOED Midstream…
  25. 4Q 2016 Earnings Conference Call – Occidental Petroleum Corp – slide 25
    Permian Resources Results and Guidance Total production grew 13% year-over-year to 124 MBOED Oil NGL Gas Increased activity in 4Q 2016 140 - 150 16 wells online in 4Q16 vs. 9 in 3Q16 124 127- 132 Added 7 top tier performing wells in…
  26. 4Q 2016 Earnings Conference Call – Occidental Petroleum Corp – slide 26
    Permian Basin 27
  27. 4Q 2016 Earnings Conference Call – Occidental Petroleum Corp – slide 27
    2016 Performance Production Program F&D Cost* Exceeded Expectations 300 269 14 12 250 12 222 Permian CAGR 10% 200 10 9 mboe/d Base management 8 150 /boe Well productivity improvement 6 100 4 Improved F&D 25% 50 2…
  28. 4Q 2016 Earnings Conference Call – Occidental Petroleum Corp – slide 28
    Permian Basin Key Takeaways 2.5 million net acres in the Permian Basin 650,000 net acres within the Delaware and Midland basins Increased unconventional horizontal drilling locations to 11,650 Average lateral length up 20% to 7,100…
  29. 4Q 2016 Earnings Conference Call – Occidental Petroleum Corp – slide 29
    Permian Basin Acreage and Inventory Update Growth Potential Through Focused Development Differentiated Permian Position 30
  30. 4Q 2016 Earnings Conference Call – Occidental Petroleum Corp – slide 30
    Net Business Area Acreage Permian Acres* Resources Resources Unconventional Areas Enhanced Oil Recovery Areas 1.4 1.1 Occidental Permian Total 2.5MM Significant Acreage & Growth Potential In All Development Areas Net Resources…
  31. 4Q 2016 Earnings Conference Call – Occidental Petroleum Corp – slide 31
    Increased Total Horizontal Drilling Locations 37% Improved Permian Resources Horizontal Inventory from 4Q2015 Locations within 300,000 net acres Added 1,250 locations 11,650 11,650 BE < 50 12,000 Added 3,150 total locations Midland…
  32. 4Q 2016 Earnings Conference Call – Occidental Petroleum Corp – slide 32
    Permian Basin Acreage and Inventory Update Growth Potential Through Focused Development Differentiated Permian Position 33
  33. 4Q 2016 Earnings Conference Call – Occidental Petroleum Corp – slide 33
    Growth Potential of 30+% from Focused Development Areas Multi-Year Permian Resources Growth Potential 300 18 15 14 16 Top-tier well performance 250 14 Production (mboed) 30% CAGR Deep inventory for range of activity 200…
  34. 4Q 2016 Earnings Conference Call – Occidental Petroleum Corp – slide 34
    Permian Resources 2017 Focused Development New Mexico NW Shelf 2017 Resources Capital 1.0 1.4 Bn Greater Sand Dunes 2,000+ Locations Midland Basin NM Delaware 80% D&C, Non- Basin Operated, Capital Workovers 20% Facilities and TX…
  35. 4Q 2016 Earnings Conference Call – Occidental Petroleum Corp – slide 35
    Greater Sand Dunes Improved Productivity by 150% 150% 6 month cumulative production Subsurface characterization enabling leading performance Oxys 2nd Bone Spring Improvements improvement from old design 178 Miles2 3D Seismic + 186…
  36. 4Q 2016 Earnings Conference Call – Occidental Petroleum Corp – slide 36
    Greater Sand Dunes Area Multi-Bench Development Provides Up to 50+% ROR Recent Well Results Barilla GreaterDraw Type Log Sand Dunes Target Formation Lateral Peak 24 Hr Peak 30 Day Oil Well Name Length (ft) (BOEPD) (BOEPD) (%)…
  37. 4Q 2016 Earnings Conference Call – Occidental Petroleum Corp – slide 37
    Lower Well Costs Are Sustainable Through Design and Performance Gains Design and efficiency to secure well costs 2017 Focus Areas Reduction of drilling non productive time through focused development Improving well costs despite…
  38. 4Q 2016 Earnings Conference Call – Occidental Petroleum Corp – slide 38
    Permian Basin Acreage and Inventory Update Growth Potential Through Focused Development Differentiated Permian Position 39
  39. 4Q 2016 Earnings Conference Call – Occidental Petroleum Corp – slide 39
    Permian EOR Proven Leader in Maximizing Recovery Across the Permian Significant inventory in Permian EOR Net Resource Potential 10-year plan MMBOE 2,000 Geographically diverse High-gradable 100 active CO2 + water 1,500 Inventory…
  40. 4Q 2016 Earnings Conference Call – Occidental Petroleum Corp – slide 40
    2016 Accomplishments in EOR Business 2017 Capital Opex Reduction Capital Efficiency Outlook 25 17% Reduction 2014-2016 12% Reduction Y/Y 600 20 500 CO2 Floods / Expansions - 195MM /BOE 15 400 300 MM 10 TZ / ROZ…
  41. 4Q 2016 Earnings Conference Call – Occidental Petroleum Corp – slide 41
    Differentiated Permian Position Primary + EOR Reservoir Management Full Cycle Value Subsurface characterization Integrated Capital and Operating cost effectiveness Enhanced oil recovery through capability and technology…
  42. 4Q 2016 Earnings Conference Call – Occidental Petroleum Corp – slide 42
    Appendix
  43. 4Q 2016 Earnings Conference Call – Occidental Petroleum Corp – slide 43
    Capital Capital Outlook Flexibility to ( in bln) Pursue 3.0 - 3.6 Profitable 2.9 Growth Total Capital Outlook 3.0 to 3.6 Bn 2016 2017E Maintenance Sustaining Growth 44
  44. 4Q 2016 Earnings Conference Call – Occidental Petroleum Corp – slide 44
    Committed Project Capital Shifts to Permian Resources Committed Project Capital Multiple long-term investments to drive cash ( in millions) flow and earnings growth have started up Al Hosn Gas 1,300 Ethylene cracker JV Ingleside…
  45. 4Q 2016 Earnings Conference Call – Occidental Petroleum Corp – slide 45
    2017 Production Outlook Total production from core assets to grow 4% - 7% over 2016, with long-term production growth target of 5 - 8% Improved Al Hosn Gas performance Increase in Permian Resources Modest impact from turnarounds,…
  46. 4Q 2016 Earnings Conference Call – Occidental Petroleum Corp – slide 46
    Middle East Record 2016 Production Achieved record production in 2016 in Oman and the UAE Core Countries 2017 Impact Oman: FY16 record production of 96 Improved production and cost reductions at Al MBOED through multiple onshore…
  47. 4Q 2016 Earnings Conference Call – Occidental Petroleum Corp – slide 47
    Midstream: Improving Cash Flows and Market Access Business Segments 2017 Impact Gas Plants: Natural gas and CO2 Free cash flow expected to improve 150 - gathering, compression and processing 200+ MM due to better marketing economics…
  48. 4Q 2016 Earnings Conference Call – Occidental Petroleum Corp – slide 48
    Chemicals Free Cash Flow to Significantly Increase Ingleside Ethylene Cracker September 2016 Ingleside Ethylene Cracker commercial operation in Q1 2017 All systems turned over for commissioning 50/50 JV with Mexichem in Corpus…
  49. 4Q 2016 Earnings Conference Call – Occidental Petroleum Corp – slide 49
    Basic Chemical Market Dynamics Are Shifting Spot Domestic Caustic Soda Price* North American Chlor-Alkali Capacity Share * Low end of price range as reported by IHS 450 400 Rest of 350 Industry Olin 23% 35% 300 250 Westlake 18% 200…
  50. 4Q 2016 Earnings Conference Call – Occidental Petroleum Corp – slide 50
    Growing the Greater Barilla Draw Area Q4 Acquisition Highlights Increased working interest from 26% to 63% Increased acreage position to 100,000 net acres & 5,000+ horizontal locations Capability to deploy 3 rigs in 2017 and 5+…
  51. 4Q 2016 Earnings Conference Call – Occidental Petroleum Corp – slide 51
    Successful Drilling Program Leading to Lower F&D Costs F&D Costs (All Sources)* 25.41 22.02 9.65 Improved productivity and lower well costs in Permian Resources 5 Year 3 Year 2016 Improved performance and 26.22 expanded…
  52. 4Q 2016 Earnings Conference Call – Occidental Petroleum Corp – slide 52
    2016 Total Company Reserve Replacement MMBOE 2015 YE Proved Reserves 2,200 Production* (231) Revisions of Previous Estimates 159 Improved Recovery 185 Extensions & Discoveries 2 Total Organic 346 Purchases & Sales 91 2016 YE Proved…
  53. 4Q 2016 Earnings Conference Call – Occidental Petroleum Corp – slide 53
    Improved Recovery and Acquisition Leads to Strong U.S. Reserve Replacement Reserve 210 (18) Replacement 1,353 1,271 (110) 2016 175% All In 66% Organic YE 2015 Production Additions Sales YE 2016 Reserves Reserves All…
  54. 4Q 2016 Earnings Conference Call – Occidental Petroleum Corp – slide 54
    2016 U.S. Reserve Replacement MMBOE 2015 YE Proved Reserves 1,271 Production (110) Revisions of Previous Estimates (92) Improved Recovery 165 Extensions & Discoveries 0 Total Organic 73 Purchase & Sales 119 2016 YE Proved Reserves…

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