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Credit Suisse Energy Summit – Occidental Petroleum Corp

Occidental Petroleum Corp · Feb 14, 2017 · 46 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. Credit Suisse Energy Summit – Occidental Petroleum Corp – slide 1
    Occidental Petroleum Corporation Vicki A. Hollub Credit Suisse Energy Summit February 14, 2017
  2. Credit Suisse Energy Summit – Occidental Petroleum Corp – slide 2
    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…
  3. Credit Suisse Energy Summit – Occidental Petroleum Corp – slide 3
    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…
  4. Credit Suisse Energy Summit – Occidental Petroleum Corp – slide 4
    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 Hosn Gas and MBOED through multiple…
  5. Credit Suisse Energy Summit – Occidental Petroleum Corp – slide 5
    Oman Oman Improved Reservoir Surveillance 140 Oman - Mukhaizna Gross Production (Mbopd) Mukhaizna Infill and shallow drilling 135 130 Record Monthly programs 125 Production 2016 Total Spend per Barrel 120 79% reduced by 24%…
  6. Credit Suisse Energy Summit – Occidental Petroleum Corp – slide 6
    Al Hosn Gas Al Hosn Gas Optimized plant to deliver more capacity Increased Completed operational trials Plant Capacity Minimal capital was required to 110% 2017 production expected to be 70 MBOED 7
  7. Credit Suisse Energy Summit – Occidental Petroleum Corp – slide 7
    Colombia Colombia Improved subsurface reservoir characterization LCI* Focused Workover and Drilling Campaign New Well Costs reduced by 35% Increased gross 2016 Total Spend per barrel reduced by 25% production by 5 79% Proved…
  8. Credit Suisse Energy Summit – Occidental Petroleum Corp – slide 8
    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…
  9. Credit Suisse Energy Summit – Occidental Petroleum Corp – slide 9
    Chemicals Free Cash Flow to Significantly Increase Ingleside Ethylene Cracker September 2016 Ingleside Ethylene Cracker expected to commence production and start-up in 1Q17 Gradual ramp up of production volumes over 1H17 50/50 JV…
  10. Credit Suisse Energy Summit – Occidental Petroleum Corp – slide 10
    Midstream: Improving Cash Flows and Market Access Business Segments 2017 Impact Gas Plants: Natural gas and CO2 gathering, Free cash flow expected to improve 150 - 200+ MM compression and processing systems to control due to better…
  11. Credit Suisse Energy Summit – Occidental Petroleum Corp – slide 11
    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…
  12. Credit Suisse Energy Summit – Occidental Petroleum Corp – slide 12
    Permian Basin Permian Resources Permian EOR 13
  13. Credit Suisse Energy Summit – Occidental Petroleum Corp – slide 13
    Business Area Acreage Net Acres* Permian Resources Unconventional Areas Enhanced Oil Recovery Areas 1.4 1.1 Resources Occidental Permian Total 2.5MM Significant Acreage & Growth Potential Net Resources Basin Development Areas In…
  14. Credit Suisse Energy Summit – Occidental Petroleum Corp – slide 14
    Increased Total Horizontal Drilling Locations 37% Improved Permian Locations within 300,000 net acres Resources Horizontal Inventory from 4Q2015 12,000 11,650 11,650 Added 1,250 locations Midland 2016 BE < 50 10,000 Added Added 3,150…
  15. Credit Suisse Energy Summit – Occidental Petroleum Corp – slide 15
    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…
  16. Credit Suisse Energy Summit – Occidental Petroleum Corp – slide 16
    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 /…
  17. Credit Suisse Energy Summit – Occidental Petroleum Corp – slide 17
    Growth Potential of 30+% from Focused Development Areas Multi-Year Permian Resources Growth Potential 300 18 15 16 Top-tier well performance 250 14 14 Deep inventory for range of Production (mboed) 30% CAGR 200 12…
  18. Credit Suisse Energy Summit – Occidental Petroleum Corp – slide 18
    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…
  19. Credit Suisse Energy Summit – Occidental Petroleum Corp – slide 19
    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…
  20. Credit Suisse Energy Summit – Occidental Petroleum Corp – slide 20
    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%…
  21. Credit Suisse Energy Summit – Occidental Petroleum Corp – slide 21
    2016 Highlights Strong Balance Sheet and Ample Liquidity EOY cash = 2.2 B 7% 189% 9.65 Low-cost Production Production Growth Total Company Total Company All- FY 2016 Reserve Replacement Sources F&D Growth Exceeds Target Ratio Capital…
  22. Credit Suisse Energy Summit – Occidental Petroleum Corp – slide 22
    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…
  23. Credit Suisse Energy Summit – Occidental Petroleum Corp – slide 23
    1Q17 and FY 2017 Guidance Summary Oil & Gas Segment DD&A FY 2017E FY 2017E Total Production Oil & Gas: 15.00 / BOE 625,000 645,000 BOED Chemicals and Midstream: 685 mm Permian Resources production of 140,000 150,000 BOED…
  24. Credit Suisse Energy Summit – Occidental Petroleum Corp – slide 24
    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 25
  25. Credit Suisse Energy Summit – Occidental Petroleum Corp – slide 25
    Appendix
  26. Credit Suisse Energy Summit – Occidental Petroleum Corp – slide 26
    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,…
  27. Credit Suisse Energy Summit – Occidental Petroleum Corp – slide 27
    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…
  28. Credit Suisse Energy Summit – Occidental Petroleum Corp – slide 28
    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…
  29. Credit Suisse Energy Summit – Occidental Petroleum Corp – slide 29
    Occidental Petroleum Key Messages and Strategy 2016 Highlights 2017 Outlook Permian Basin 30
  30. Credit Suisse Energy Summit – Occidental Petroleum Corp – slide 30
    Production Total Company Production* Permian Resources Production Growth (MBOED) (MBOED) Exceeded Guidance 7% Growth Y/Y 13% Growth Y/Y 602 124 565 110 2015 2016 2015 2016 * Ongoing operations; excludes Piceance, Iraq and…
  31. Credit Suisse Energy Summit – Occidental Petroleum Corp – slide 31
    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,…
  32. Credit Suisse Energy Summit – Occidental Petroleum Corp – slide 32
    Occidental Petroleum Key Messages and Strategy 2016 Highlights 2017 Outlook Permian Basin 33
  33. Credit Suisse Energy Summit – Occidental Petroleum Corp – slide 33
    Permian Resources 2017 Focused Development New Mexico NW Shelf 2017 Resources Greater Sand Dunes 2,000+ Locations Capital 1.0 1.4 Bn Midland Basin NM Delaware 80% D&C, Non- Basin Operated, Capital Workovers TX Delaware Basin…
  34. Credit Suisse Energy Summit – Occidental Petroleum Corp – slide 34
    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…
  35. Credit Suisse Energy Summit – Occidental Petroleum Corp – slide 35
    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 36
  36. Credit Suisse Energy Summit – Occidental Petroleum Corp – slide 36
    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…
  37. Credit Suisse Energy Summit – Occidental Petroleum Corp – slide 37
    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…
  38. Credit Suisse Energy Summit – Occidental Petroleum Corp – slide 38
    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…
  39. Credit Suisse Energy Summit – Occidental Petroleum Corp – slide 39
    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…
  40. Credit Suisse Energy Summit – Occidental Petroleum Corp – slide 40
    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) (%)…
  41. Credit Suisse Energy Summit – Occidental Petroleum Corp – slide 41
    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+…
  42. Credit Suisse Energy Summit – Occidental Petroleum Corp – slide 42
    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…
  43. Credit Suisse Energy Summit – Occidental Petroleum Corp – slide 43
    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…
  44. Credit Suisse Energy Summit – Occidental Petroleum Corp – slide 44
    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…
  45. Credit Suisse Energy Summit – Occidental Petroleum Corp – slide 45
    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…
  46. Credit Suisse Energy Summit – Occidental Petroleum Corp – slide 46
    Occidental Petroleum Key Messages and Strategy 2016 Highlights 2017 Outlook Permian Basin 47

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