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JP Morgan Energy Equity Conference – Occidental Petroleum Corp

Occidental Petroleum Corp · Jun 27, 2017 · 28 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. JP Morgan Energy Equity Conference – Occidental Petroleum Corp – slide 1
    J.P. Morgan Investor Conference Occidental Petroleum Corporation June 27, 2017 Vicki Hollub Chief Executive Officer
  2. JP Morgan Energy Equity Conference – Occidental Petroleum Corp – slide 2
    Occidental Petroleum Value Proposition Portfolio Optimization Path to Cash Flow Neutrality and Breakeven Sustainability With High Quality Assets Model 3
  3. JP Morgan Energy Equity Conference – Occidental Petroleum Corp – slide 3
    Oxys Unique 2016 ROCE* Consistent Dividend Growth Value Growing dividend with strong yield Proposition Value protection in down cycle Upside in rising oil Promotes capital allocation discipline price environment and downside Moderate…
  4. JP Morgan Energy Equity Conference – Occidental Petroleum Corp – slide 4
    Cash Flow Priorities 1. Base/Maintenance Capital Favor Dividends 2. Dividends Dividends promote 3. Growth Capital capital allocation Subject to Returns and discipline 4. Acquisitions Market Conditions 5. Share Repurchases 5
  5. JP Morgan Energy Equity Conference – Occidental Petroleum Corp – slide 5
    Delivering Consistent Annual Dividend Growth 2002 2016: Oxy dividend CAGR 13.7% vs S&P CAGR 7% (/share) 28.00 Annual Dividends Paid 26.42 24.00 Cumulative Dividends Paid 23.38 20.36 20.00 17.39 16.00 14.51 11.95 12.00 9.79…
  6. JP Morgan Energy Equity Conference – Occidental Petroleum Corp – slide 6
    Value Growth - Production Growth Since 2011 Ongoing Total Company Production CAGR 6%* 700 600 575 Permian 528 Resources 500 438 435 428 440 16% CAGR 400 Mboed 300 200 100 0 2011 2012 2013 2014 2015 2016 Ongoing…
  7. JP Morgan Energy Equity Conference – Occidental Petroleum Corp – slide 7
    Value Growth - Annual ROCE for Oxy vs. Average of Competitors 30% 2008 2013 20% Average ROCE 15% 10% 00% (10%) (20%) (30%) 2008 2009 2010 2011 2012 2013 2014 2015 2016 OXY ROCE Competitors ROCE* *Competitors ROCE…
  8. JP Morgan Energy Equity Conference – Occidental Petroleum Corp – slide 8
    Value Growth - Multi-year Returns Focused Portfolio Optimization Set to generate both returns to shareholders and value-based growth Divested assets that did not generate Investing in assets with higher cash competitive corporate…
  9. JP Morgan Energy Equity Conference – Occidental Petroleum Corp – slide 9
    Our Pathway to Cash Flow Breakeven at 50 WTI 6.0 5.6 5.6 Growth Capital Operating Cash Flow ( Bn) 5.0 4.7 4.4 1.0 4.2 4.0 Pathway Drivers: Sustaining Capital 3.0 Permian Resources high-margin growth to 2.3 50/bbl accelerate…
  10. JP Morgan Energy Equity Conference – Occidental Petroleum Corp – slide 10
    Asset Quality and Capital Flexibility Provides Optionality to Cover Dividend Upon plan execution, Oxy can fund dividend and sustain production from operating cash flows. WTI Oil Price: Annual cash flow sensitivities (Bn) 40 50 60…
  11. JP Morgan Energy Equity Conference – Occidental Petroleum Corp – slide 11
    Oxy Pathway to Cash Flow Breakeven at 40 WTI 5.0 4.4 4.4 Operating Cash Flow ( Bn) 4.0 3.7 3.4 3.2 Sustaining 3.0 Pathway Drivers: Capital 2.1 Permian Resources high-margin growth to 2.0 40/bbl accelerate value proposition of…
  12. JP Morgan Energy Equity Conference – Occidental Petroleum Corp – slide 12
    Opportunistic Transactions Create Long-term Value Consistent with our pathway to breakeven at 50 WTI*, Oxy has executed multiple transactions in the Permian to accelerate our plan. Oxy has agreed to a number of purchase and sale…
  13. JP Morgan Energy Equity Conference – Occidental Petroleum Corp – slide 13
    Overview of Non-Strategic Permian Resources Net Transactions Transactions Terms Permian Resources Acreage Permian EOR Acreage Combined net proceeds of 0.6 Bn Properties Description Divested of non-strategic acreage in Andrews,…
  14. JP Morgan Energy Equity Conference – Occidental Petroleum Corp – slide 14
    Overview of Enhanced Oil Recovery Acquisition in the Permian Transactions Terms Permian Resources Acreage Permian EOR Acreage Purchase price of 0.6 Bn CO2 Source Fields and Pipelines Properties Description Bravo Dome Unit WI from 77%…
  15. JP Morgan Energy Equity Conference – Occidental Petroleum Corp – slide 15
    Upside Potential from Operatorship of Seminole-San Andres Value Improvement Through Scale and Operating Costs (/Boe) 30 Operational Synergies 25 High Opex Range Seminole-San Oxy EOR unit of Seminole-San Andres unit becomes Oxys…
  16. JP Morgan Energy Equity Conference – Occidental Petroleum Corp – slide 16
    Transactions Effectively a Swap with Net Benefits to Oxy Transactions on a net basis*: Remaining 2017 2019 Production (Boed) 3,500 7,000 Operating Cash Flow ( MM) 35 80 Free Cash Flow ( MM) 25 55 Lowers our sustaining capital and…
  17. JP Morgan Energy Equity Conference – Occidental Petroleum Corp – slide 17
    Value Growth Significantly Reduced Development Cost 2016 F&D (Organic) /Boe 20 19.27 17.19 15 13.37 11.73 11.41 /Boe 10 9.59 6.86 6.51 6.45 5 0 1 2 3 4 5 6 7 8 OXY Competitor Peers* *Competitor Peers include APC,…
  18. JP Morgan Energy Equity Conference – Occidental Petroleum Corp – slide 18
    Value Growth 2016 ROCE* 10% Focus on value driven growth - Top quartile returns 0% Positioned to return to double digit (10%) returns (20%) (30%) HES DVN CXO APC MRO APA EOG COP PXD OXY CVX XOM *Calculated based on public…
  19. JP Morgan Energy Equity Conference – Occidental Petroleum Corp – slide 19
    Focused Oil and Gas Core Areas Businesses OxyChem High free cash United States flow, moderate Leading position in the Permian growth business Permian Resources is a growth driver Midstream Integrated infrastructure Middle East and…
  20. JP Morgan Energy Equity Conference – Occidental Petroleum Corp – slide 20
    Permian Resources Business Area Acreage Net Acres Resources Unconventional Areas 1.4 Significant acreage Enhanced Oil Recovery Areas 1.1 & growth potential Oxy Permian Total 2.5 MM in all development areas Net Resources Basin…
  21. JP Morgan Energy Equity Conference – Occidental Petroleum Corp – slide 21
    Improved Permian Increased Total Horizontal Drilling Locations 37% Resources Horizontal Inventory from 4Q2015 Locations within 300,000 of 650,000 net acres in Basin Development Areas Added 1,250 locations 12,000 11,650 11,650 BE <…
  22. JP Morgan Energy Equity Conference – Occidental Petroleum Corp – slide 22
    Permian EOR Proven Leader in Maximizing Recovery Across the Permian Significant inventory in Permian EOR 10-year plan Net Resource Potential 2,000 Geographically diverse High- 100 active CO2 + water gradable Inventory 1,500 floods…
  23. JP Morgan Energy Equity Conference – Occidental Petroleum Corp – slide 23
    Longest Legacy International Operations: Colombia and Oman Colombia: Discovered giant Cano Limon field in the early 1980s. Several contracts that currently range from 6 years up to the economic life of field. Long term contracts…
  24. JP Morgan Energy Equity Conference – Occidental Petroleum Corp – slide 24
    Additional Core Middle East Assets ISND and ISSD: Offshore development in Qatar. ISND contract for 25 years initiated in 1994. ISSD contract expires in 2022. Dolphin: Premier transborder pipeline delivering gas from Qatar to Abu…
  25. JP Morgan Energy Equity Conference – Occidental Petroleum Corp – slide 25
    Current Dividend Yield vs. Competitors 6.0% Dividend yield should revert close to historical levels as we 5.2% execute plan to a lower cash flow breakeven 5.0% 5.0% 4.1% 4.0% 3.8% 3.0% 2002 2016 Average Oxy Dividend Yield 2.2%…
  26. JP Morgan Energy Equity Conference – Occidental Petroleum Corp – slide 26
    Strong Balance Sheet - Oxy Credit Ratings Vs. Peers Company S&P S&P Moodys Moodys New Issue Ratings Outlook Ratings Outlook Indications (10-year) XOM AA+ Negative Aaa Negative 2.95% CVX AA- Negative Aa2 Stable 3.05% OXY A Stable A3…
  27. JP Morgan Energy Equity Conference – Occidental Petroleum Corp – slide 27
    Unique Investment Proposition Large Integrated Majors Independent E&Ps Company Market Cap (Bn) Company Market Cap (Bn) Oxy XOM 344 COP 55 Uniquely RDS 237 EOG 50 Positioned CVX 197 PXD 26 TOT 120 APC 25 BP 117 APA 18 ENI 54 DVN 16…
  28. JP Morgan Energy Equity Conference – Occidental Petroleum Corp – slide 28
    Successful Consistent 2016 ROCE* Dividend Growth Value Oxy dividend CAGR doubled S&P CAGR since 2002 Proposition Highest yield vs. US peers Historical dividend yield of 2.85% Oxy has delivered Moderate Value-Based Growth positive…

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