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2Q 2017 Earnings Conference Call – Occidental Petroleum Corp

Occidental Petroleum Corp · Aug 3, 2017 · 48 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. 2Q 2017 Earnings Conference Call – Occidental Petroleum Corp – slide 1
    Second Quarter 2017 Earnings Conference Call Occidental Petroleum Corporation August 3, 2017
  2. 2Q 2017 Earnings Conference Call – Occidental Petroleum Corp – slide 2
    Occidental Petroleum Pathway to Breakeven and 2Q17 Highlights Raised quarterly dividend for 15th consecutive year from 0.76 to 0.77 per share Value-based Operations and Portfolio Management Development Approach Technological Progress…
  3. 2Q 2017 Earnings Conference Call – Occidental Petroleum Corp – slide 3
    Pathway to Cash Flow Breakeven at Low Oil Prices Cash Flow Breakeven at 50: 6.0 Dividend + 5% 8% Production Growth 5.7 5.7 Growth Operating Cash Flow ( Bn) 5.0 Cash Flow Neutral at 40: Capital 1.0 Dividend with Flat Production…
  4. 2Q 2017 Earnings Conference Call – Occidental Petroleum Corp – slide 4
    Achieving Goals to Cash Flow Neutrality at 40 Annualized Cash Flow From Operations Improvements ( Bn) Achieved since 1Q17 Breakeven Plan Ethylene cracker achieved full quarter of operating income 0.8 with first cash distribution 0.7…
  5. 2Q 2017 Earnings Conference Call – Occidental Petroleum Corp – slide 5
    Cash Flows Through End of 2018 at 40 WTI Ample Liquidity to 6.0 2018 Fulfill Plan Even at Remaining 2017 40 WTI 5.0 Cash flow outspend through the 4.0 completion of our plan is covered by Bn available liquidity, including: 3.0…
  6. 2Q 2017 Earnings Conference Call – Occidental Petroleum Corp – slide 6
    Occidental Petroleum Pathway to Breakeven Update Financial Summary and Guidance Permian Highlights Closing Remarks 8
  7. 2Q 2017 Earnings Conference Call – Occidental Petroleum Corp – slide 7
    2Q 2017 Core Results Results Total reported production (boed) 601,000 Total ongoing company production (boed) 594,000 Total Permian Resources production (boed) 138,000 Core diluted EPS* 0.15 2Q17 CFFO before Working Capital & Other…
  8. 2Q 2017 Earnings Conference Call – Occidental Petroleum Corp – slide 8
    YTD 2017 Cash Flow and Cash Balance Reconciliation ( in Bn) 2.1 (0.4) (1.5) 2.2 (1.2) 0.8 2.2 0.6 (0.4) Beginning Cash CFFO Before Change in Capital Dividends Asset Sales Acquisitions/ Tax Refund Ending Cash Balance Working…
  9. 2Q 2017 Earnings Conference Call – Occidental Petroleum Corp – slide 9
    3Q17 and FY 2017 Guidance Summary Oil & Gas Segment DD&A FY 2017E Oil & Gas: 15 / boe FY 2017E Total Production Chemicals and Midstream: 685 MM 597,000 605,000 boed Permian Resources production of 140,000 147,000 boed Midstream…
  10. 2Q 2017 Earnings Conference Call – Occidental Petroleum Corp – slide 10
    Occidental Petroleum Pathway to Breakeven Update Financial Summary and Guidance Permian Highlights Closing Remarks 12
  11. 2Q 2017 Earnings Conference Call – Occidental Petroleum Corp – slide 11
    Seminole-San Andres Further Strengthens Our Leading Position in EOR Seminole-San Andres is now our largest operated CO2 3,500 Gas EOR Projects* project in the Permian 3,000 Production Volumes Occidental San Andres reservoir is…
  12. 2Q 2017 Earnings Conference Call – Occidental Petroleum Corp – slide 12
    Permian EOR Proven Leader in Maximizing Recovery Across the Permian Seminole San Andres Unit Permian EOR adds low F&D inventory Net Resource Potential 100 MMboe at < 6.00 SSAU future development cost 2,000 Acquisition…
  13. 2Q 2017 Earnings Conference Call – Occidental Petroleum Corp – slide 13
    Reached
  14. 2Q 2017 Earnings Conference Call – Occidental Petroleum Corp – slide 14
    Permian Resources Capital Intensity Improves through 2019 All-In Capital Intensity 2017 to 2019 Value-based Development Annual Capex MM / Annual Wedge Mboed* reduces capital intensity 54MM Facilities, infrastructure and other**…
  15. 2Q 2017 Earnings Conference Call – Occidental Petroleum Corp – slide 15
    Achieving Plan Through Value-based Approach Current trajectory of 30% CAGR Exited 2Q with 11 operated rigs Multi-Year Permian Resources Growth 26 wells online in 2Q17 300 20 Exit 2017 with 11 company operated 18 rigs, 2 net non-op…
  16. 2Q 2017 Earnings Conference Call – Occidental Petroleum Corp – slide 16
    Occidental Petroleum Pathway to Breakeven Update Financial Summary and Guidance Permian Highlights Closing Remarks 18
  17. 2Q 2017 Earnings Conference Call – Occidental Petroleum Corp – slide 17
    Appendix Contents Permian Updates Social Responsibility, Environment, and Governance Journey to Digital Transformation Company Overview and Value Proposition 20
  18. 2Q 2017 Earnings Conference Call – Occidental Petroleum Corp – slide 18
    Permian Resources Wells Continue to Improve New Mexico Bone Spring Texas Delaware Wolfcamp 250 150 Cumulative Production Cumulative Production 200 6 Month BOE 6 Month BOE 100 150 100 50 50 0 0 2015 1H16 2H16 2017 Top…
  19. 2Q 2017 Earnings Conference Call – Occidental Petroleum Corp – slide 19
    Added 20 Rig Years of Activity…
  20. 2Q 2017 Earnings Conference Call – Occidental Petroleum Corp – slide 20
    Permian Resources Business Area Acreage Net Acres* Resources Unconventional Areas 1.4 Significant acreage & growth Enhanced Oil Recovery Areas 1.1 potential in all development Oxy Permian Total 2.5MM areas Net Resources Basin…
  21. 2Q 2017 Earnings Conference Call – Occidental Petroleum Corp – slide 21
    Greater Sand Dunes Value-Based Development Increases Returns High-margin growth barrels Operating Excellence NM Oxy Operated Production NM Oxy Operated Opex 60 16 Oxy operated OPEX 5.50/boe in Legacy Growth 50 Greater Sand Dunes…
  22. 2Q 2017 Earnings Conference Call – Occidental Petroleum Corp – slide 22
    Greater Barilla Draw Value-Based Development Increases Returns New Records and Focused Activity 2017 Barilla Draw proper Wolfcamp A Optimized Landing Point Results Optimizing landing point and well 200 design in Red Bull South 180 Lyda…
  23. 2Q 2017 Earnings Conference Call – Occidental Petroleum Corp – slide 23
    Midland Basin - Merchant Value-Based Development Increases Returns Multi-bench program and operating efficiency create play-leading opex Operating…
  24. 2Q 2017 Earnings Conference Call – Occidental Petroleum Corp – slide 24
    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…
  25. 2Q 2017 Earnings Conference Call – Occidental Petroleum Corp – slide 25
    Improving Results in Greater Barilla Draw Area MultiBench Development Recent Well Results Barilla Draw Type Log Greater Barilla Draw Target Formation Lateral Peak 24 Hr Peak 30 Day Oil Well Name Length (ft) (boed) (boed) (%)…
  26. 2Q 2017 Earnings Conference Call – Occidental Petroleum Corp – slide 26
    Largest Operator in the Permian 400 Liquids Gas PERMIAN BASIN NET MBOEPD OPERATED 350 Advantages Through Scale 300 10,000 mi2 3D seismic 250 130,000 mi2 2D seismic PRODUCTION* 200 24,500 gross operated wells 10,000 gross…
  27. 2Q 2017 Earnings Conference Call – Occidental Petroleum Corp – slide 27
    Reducing Domestic Opex Through High-Margin Growth Barrels Asset Area Opex Ranges Domestic Production Mix Permian Resources 2 - 4 Growth Opex / boe Growth Legacy Flat EOR Permian Resources 5 - 20 Legacy Opex / boe 2017 2018+…
  28. 2Q 2017 Earnings Conference Call – Occidental Petroleum Corp – slide 28
    Appendix Contents Permian Updates Social Responsibility, Environmental, and Governance Journey to Digital Transformation Company Overview and Value Proposition 31
  29. 2Q 2017 Earnings Conference Call – Occidental Petroleum Corp – slide 29
    Reporting on Social Responsibility Since 1995 Environment, Social Responsibility and Governance are fundamental to our success and reputation as a Partner of Choice. 32
  30. 2Q 2017 Earnings Conference Call – Occidental Petroleum Corp – slide 30
    Stockholder Proposal Stockholder Produce a report assessing portfolio impacts of plausible scenarios that Proposal on address climate change, including the International Energy Agency's 450 Managing Scenario Climate-related Risks…
  31. 2Q 2017 Earnings Conference Call – Occidental Petroleum Corp – slide 31
    Our Governance of Climate-related Risks and Opportunities Managing Board of Directors' Environment, Health and Safety Committee provides leadership and oversight across all businesses with regard to climate risk, community resiliency…
  32. 2Q 2017 Earnings Conference Call – Occidental Petroleum Corp – slide 32
    Water Infrastructure Drives 2017 Delaware Basin YTD Frac Water Usage Value & Environmental Benefits 5% Fresh water only 5% of water used Fresh Water 32% for completions in Delaware Basin Brackish Water Recycled Water Sand…
  33. 2Q 2017 Earnings Conference Call – Occidental Petroleum Corp – slide 33
    CO2 EOR Process Gas & NGL Sales Produced CO2 Gas Separate Oil, Gas and Water CO2 Recycled from Gas CO2 supplied Oil Sales Plant from Pipeline Injection Production Injector Producer Wellbore Wellbore Drive Additional…
  34. 2Q 2017 Earnings Conference Call – Occidental Petroleum Corp – slide 34
    How does CO2 Oil (Red) EOR Work Physics of Miscible CO2 EOR at Pore Scale Water Injection Water injection (blue) recovers oil in large pores; leaving trapped oil (red) in small pores CO2 (yellow) dissolves and displaces trapped…
  35. 2Q 2017 Earnings Conference Call – Occidental Petroleum Corp – slide 35
    Appendix Contents Permian Updates Social Responsibility, Environment, and Governance Journey to Digital Transformation Company Overview and Value Proposition 38
  36. 2Q 2017 Earnings Conference Call – Occidental Petroleum Corp – slide 36
    Our Journey to Digital Transformation Production Optimization Consolidated ERP Systems Institutionalized Processes Integration of operational, technical and and Tools financial data Single reporting repository Global Supply Chain…
  37. 2Q 2017 Earnings Conference Call – Occidental Petroleum Corp – slide 37
    Data Science Going Beyond Interesting Data Collection & Profiling Insight & Recommendations Computational Methods Key Levers University Partnerships Optimization Data & Analytics Domain Expertise O&G Industry Oxy & Industry…
  38. 2Q 2017 Earnings Conference Call – Occidental Petroleum Corp – slide 38
    Driving Value Step Changing Performance the Bit Identify Understand Engineer Implement Problem: Inefficient use of rig Real Time Monitoring from Anywhere energy resulting in slow and higher cost drilling R e-Engineer BHA* Downhole…
  39. 2Q 2017 Earnings Conference Call – Occidental Petroleum Corp – slide 39
    Driving Value Bit Algorithm the Bit + Predicts bit location using physics +machine learning Projection Distance the Target Calculates dogleg severity, build/turn rate, motor yield 325K avg. per rig savings Vendor performance…
  40. 2Q 2017 Earnings Conference Call – Occidental Petroleum Corp – slide 40
    Driving Value the Reservoir Target=100MM Observation Well Injection Well Vent Well Field decisions that Steam/Water/CO2 optimize daily total field production Leverage field data and new data sources Temp, Press Injection…
  41. 2Q 2017 Earnings Conference Call – Occidental Petroleum Corp – slide 41
    Driving Value Lift System Diagnostic/Optimization the Well Leverages artificial intelligence and pattern recognition Increase run life Proprietary deviated well algorithms based on mechanical engineering+applied mathematics Earlier…
  42. 2Q 2017 Earnings Conference Call – Occidental Petroleum Corp – slide 42
    Appendix Contents Permian Updates Social Responsibility, Environment, and Governance Journey to Digital Transformation Company Overview and Value Proposition 45
  43. 2Q 2017 Earnings Conference Call – Occidental Petroleum Corp – slide 43
    Delivering Consistent Annual Dividend Growth 2002 2016: Oxy dividend CAGR 13.7% vs S&P CAGR 7% (/share) 28.00 Annual Dividends Paid 26.46 24.00 Cumulative Dividends Paid 23.38 20.36 20.00 17.39 16.00 14.51 11.95 12.00…
  44. 2Q 2017 Earnings Conference Call – Occidental Petroleum Corp – slide 44
    Value Growth Value Growth - Annual ROCE for Oxy vs. Average of Competitors Consistent top-tier ROCE performance in industry 30% Organizational structure, process and culture have 20% been aligned to deliver returned based growth…
  45. 2Q 2017 Earnings Conference Call – Occidental Petroleum Corp – slide 45
    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…
  46. 2Q 2017 Earnings Conference Call – Occidental Petroleum Corp – slide 46
    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…
  47. 2Q 2017 Earnings Conference Call – Occidental Petroleum Corp – slide 47
    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…
  48. 2Q 2017 Earnings Conference Call – Occidental Petroleum Corp – slide 48
    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…

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