First Quarter 2017 Earnings Conference Call Occidental Petroleum Corporation May 4, 2017
Opening Remarks Returns-focused portfolio optimization Differentiated value-based approach Pathway to cash flow breakeven* * Cash Flow Breakeven after Dividend and Growth Capital 3
Multi-year Returns Focused Portfolio Optimization Set to generate both returns to shareholders and value-based growth Divested assets that did not generate competitive Investing in Invested assets within higher assetscash…
Divestiture Proceeds to be Reinvested into Higher-Margin Permian Resources Permian Resources Cost Structure 16 - 19 / 9 Mboed replaces South boe Texas Gas properties operating cash flows. We expect to reach this replacement volume…
Differentiated Creating shareholder value over the long-term Value-Based Approach Culture of innovative technology and process Subsurface characterization More Oil Integrated development planning Oxy Drilling Dynamics Less Cost…
Cash Flow Priorities 1. Base/Maintenance Capital 2. Dividends 3. Growth Capital Subject to Returns and 4. Acquisitions Market 5. Share Repurchases Conditions 7
Pathway to Cashflow Breakeven Executing a plan to fund a growing dividend and 5% 8% growth at 50 WTI. Pathway: Milestones: Grow high margin production with low 80 Mboed of production growth capital intensity Ample options to…
Occidental Petroleum Financial Highlights Differentiated Development Guidance 9
First Quarter 2017 Core Results Results Total company production (boed) 584,000 Total Permian Resources production (boed) 129,000 Permian Resources oil production (bod) 78,000 +7% QoQ Reported and Core diluted EPS 0.15 1Q17 CFFO before…
YTD 2017 Cash Flow and Cash Balance Reconciliation ( in billions) 1.1 (0.4) (0.8) 2.2 (0.6) 1.5 Beginning Cash Balance CFFO Before Working Change in Working Capital Expenditures Dividends Ending Cash Balance 1/1/17…
Occidental Petroleum Financial Highlights Differentiated Development Guidance 12
Successful Start-up of Ingleside Ethylene Cracker On time and on budget Not a merchant plant JV structure and supply agreements with Mexichem ensures returns above cost of capital for both parties Differentiated Value based…
Market Overview 250 Chemicals Pre-Tax Earnings (EBIT)1 200 Major industry consolidation Millions 150 complete 100 Caustic soda supply- 50 demand balance 0 continues to improve 2Q17E 1Q12 2Q12 3Q12 4Q12…
Domestic O&G Maximize value of portfolio Differentiated value-based approach Innovative technology 15
Maximize Value of Portfolio - Low Capital Intensity Drives Value Multi-Year Permian Resources Growth All-In Capital Intensity 2015 / 2016 54 MM 300 STX Sale Re-invested 11 13 rigs 15 20 18 < 30MM 2017 33 MM 250 at exit 16…
Greater Sand Dunes Value Based Development Increases Returns Currently three play leading Three high-return development benches benches under development 300 Current* 3rd Bone Spring 250 Modular development 200 Cumulative…
Greater Barilla Draw Value Based Development Increases Returns Red Bull South Active and Wolfcamp B Improvement = frac optimization to drive results Improving 150 2 rigs currently operating 125 Cumulative Mboe 100 3 wells…
Midland Basin - Merchant Value Based Development Increases Returns Wolfcamp B Improvement = two high return development benches Currently two play leading 175 benches under development 150 All WC A Wells Cumulative Oil - Mbo…
SL2 Single Location Sequenced Lateral (SL2) Lower Costs SL2 Potentially Lowers Secondary Bench BE by 5: Lowers well cost by 0.5 - 1.0MM Reduces operating costs by over 50% Sequencing increases facilities utilization One artificial…
Logistic & Maintenance Hub Value Chain Partnerships Lower Costs Underway Secures supply availability Service company yard OCTG Laydown Yard 500 750k savings per well Maintenance Stimulation & Cement 20 railcar spots…
Occidental Petroleum Financial Highlights Differentiated Development Guidance 22
2Q17 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 595,000 615,000 boed Permian Resources production of 140,000 150,000 boed Midstream…
Permian Resources Results and Guidance Total production grew 5% from Q4 16 to 129 Mboed Oil NGL Gas Oil production up 7% from Q4 16 to 78 Mbod 140 - 150 135 - 140 129 124 Increased activity in 1Q 2017 Exited Q1 with 7 rigs 110…
Appendix
Oil and Gas 607 6 1 (30) Company-wide Oil & Gas Production (Mboed) Production 584 Results 4Q16 Permian Other Domestic International 1Q17 8 (1) 0 303 Production (Mboed) Domestic Oil & Gas 296 4Q16 Oil NGLs…
Permian Resources 2017 Focused Development New Mexico NW Shelf Greater Sand Dunes 2,000+ Locations Contiguous Midland Basin Acreage NM Delaware Basin Multi-bench TX Delaware Basin Central Basin Capable Platform…
Increased Total Horizontal Drilling Locations 37% Permian Resources Inventory 4Q16 Locations within 300,000 of 650,000 net acres in Basin Development Areas Added 1,250 locations BE < 50 12,000 11,650 11,650 Added 3,150 total locations…
Outstanding Results in Greater Sand Dunes Area MultiBench Development Recent Well Results Barilla Draw Type Log Greater Sand Dunes Target Formation Lateral Peak 24 Hr Peak 30 Day Well Name Oil (%) Length (ft) (boed) (boed) Brushy…
Improving Results in Greater Barilla Draw Area MultiBench Development Recent Well Results Barilla Draw Type Log Greater Barilla Draw Drilled 228 Wells Across 8 Benches Target Formation Lateral Peak 24 Hr Peak 30 Day Oil Well Name…
2015+ NonOperated Activity Permian Resources Non-Operated New Mexico NW Shelf Assets Midland Basin NM Delaware Significant OBO Basin Central Basin position delivers Greater Sand Dunes Platform 13% of domestic TX Delaware…
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