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2Q 2018 Earnings Conference Call – Occidental Petroleum Corp

Occidental Petroleum Corp · Aug 9, 2018 · 42 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 2018 Earnings Conference Call – Occidental Petroleum Corp – slide 1
    Second Quarter 2018 Earnings Conference Call Occidental Petroleum Corporation August 9, 2018
  2. 2Q 2018 Earnings Conference Call – Occidental Petroleum Corp – slide 2
    Occidental Petroleum 2Q18 Highlights Financial Summary and Guidance Permian Resources Update Closing Remarks 3
  3. 2Q 2018 Earnings Conference Call – Occidental Petroleum Corp – slide 3
    Second Quarter 2018 Key Takeaways 5 Bn 2018E cash improvement allocated to increase shareholder return Business Outperformance Portfolio Optimization Updated FY 2018 Guidance Completed low oil 2.6 Bn sale of non- Allocation of 5 Bn…
  4. 2Q 2018 Earnings Conference Call – Occidental Petroleum Corp – slide 4
    All Segments Outperforming Cash Flow Expectations Midstream & Marketing Chemicals Oil & Gas Permian EOR Market and operational improvements: Market improvements: Market and operational improvements: Mid to Gulf Coast Differentials…
  5. 2Q 2018 Earnings Conference Call – Occidental Petroleum Corp – slide 5
    Breakeven Plan Achieved Delivering CROCE Leadership Chemicals CROCE Leadership Returns Focused Mexichem JV Ethylene Cracker Growth Secure dividend 4CPe Plant at low oil prices Growth Within Cash Midstream Flow 50 WTI: Mid to…
  6. 2Q 2018 Earnings Conference Call – Occidental Petroleum Corp – slide 6
    Cash Flow Breakeven at Low Oil Prices Achieved 6.0 5.7 Actual 5.7 Positive 120 MM per 1 Growth Midstream and Change in oil price Capital 5.0 Chemicals Market 1.0 Operating Cash Flow ( Bn) 4.5 4.0 Sustaining Sustaining…
  7. 2Q 2018 Earnings Conference Call – Occidental Petroleum Corp – slide 7
    Monetizing Non-Core Domestic Midstream Assets While Retaining Marketing Midstream Transaction Rationale Divested Midstream Assets 2017: EBITDA 180 MM Capital 140 MM 2.6 Bn transaction value Centurion oil gathering and long-haul pipeline…
  8. 2Q 2018 Earnings Conference Call – Occidental Petroleum Corp – slide 8
    Investing in Highest-returning Options to Improve CROCE Strategic Rationale for Investment Cash Return on Capital Employed 10% Improvement from Improves our key metric: CROCE Incremental Capital 24% 22% Accelerating highest-return…
  9. 2Q 2018 Earnings Conference Call – Occidental Petroleum Corp – slide 9
    Capital Allocation Driven by Advantaged Permian Position Strategic Rationale for Investment Oxy Uniquely Checks All the Boxes Best Wells: Oxy delivered 25 of top 50 wells in Improves our key metric: CROCE the Basin over the last year1…
  10. 2Q 2018 Earnings Conference Call – Occidental Petroleum Corp – slide 10
    Maintaining Discipline with Capital and Dividend Within Cash Flows Strategic Rationale for Investment Cash Flow Improvement from 2018 Original Plan Buybacks Improves our key metric: CROCE 2.6 and Balance Sheet Bn Accelerating…
  11. 2Q 2018 Earnings Conference Call – Occidental Petroleum Corp – slide 11
    Short-cycle Investments Provide Flexibility and Less Risk Strategic Rationale for Investment Capital Flexibility Improves our key metric: CROCE Capability to reduce capital from 5.0 Bn 2018 growth plan to sustaining capital level in…
  12. 2Q 2018 Earnings Conference Call – Occidental Petroleum Corp – slide 12
    Valuable Growth and Share Buybacks Will Reduce Dividend Payout Ratio Strategic Rationale for Investment Focus on CROCE driving Historical Dividend Payout Ratio1 less than 25% down payout Improves our key metric: CROCE ratio DPR…
  13. 2Q 2018 Earnings Conference Call – Occidental Petroleum Corp – slide 13
    Occidental Petroleum 2Q18 Highlights Financial Summary and Guidance Permian Resources Update Closing Remarks 14
  14. 2Q 2018 Earnings Conference Call – Occidental Petroleum Corp – slide 14
    2Q18 Results 2Q18 Actual versus Guidance Total reported production (Boed) 639,000 Boed Midpoint Reconciliation Total Permian Resources production (Boed) 201,000 Permian Resources execution +8,000 and well productivity Reported…
  15. 2Q 2018 Earnings Conference Call – Occidental Petroleum Corp – slide 15
    2018 Production and Capital Changes Key Program Highlights Updated 2018 Capital Program by Asset ( Bn) FY 2018 production guidance +2 Mboed from 1Q guide: Chemicals Midstream Exploration & Other International +7 Mboed excluding…
  16. 2Q 2018 Earnings Conference Call – Occidental Petroleum Corp – slide 16
    2018 Guidance Oil & Gas Segment Exploration Expense FY 2018E Production 25 MM in 3Q18E Total production of 650 664 Mboed 150 MM in FY 2018E Permian Resources production of 207 215 Mboed DD&A FY 2018E International production of 285…
  17. 2Q 2018 Earnings Conference Call – Occidental Petroleum Corp – slide 17
    Cash Flow Sensitivities in 3Q18 Oil & Gas Annualized cash flow changes 120 million per 1.00 / bbl change in oil prices 90 million per 1.00 / bbl change in Midland prices 30 million per 1.00 / bbl change in Brent prices Annualized…
  18. 2Q 2018 Earnings Conference Call – Occidental Petroleum Corp – slide 18
    Occidental Petroleum 2Q18 Highlights Financial Summary and Guidance Permian Resources Update Closing Remarks 19
  19. 2Q 2018 Earnings Conference Call – Occidental Petroleum Corp – slide 19
    2018 YTD Permian Highlights 213 Mboed Surpassed Permian Resources Breakeven Plan Milestone in June Enhanced Our Portfolio Increased the Value of Advanced Technologies our Assets and Operations Permian Resources Permian Resources…
  20. 2Q 2018 Earnings Conference Call – Occidental Petroleum Corp – slide 20
    Core Development Areas Delivering Impressive Results Greater Sand Dunes Barilla Draw 2nd Bone Spring - 10K wells Wolfcamp A - 10K wells 300 300 5 Wells 10,000 Cumulative Production (Mboe) Cumulative Production (Mboe) 250 250 3…
  21. 2Q 2018 Earnings Conference Call – Occidental Petroleum Corp – slide 21
    Deploying Excess Cash to High Return Projects Investing excess cash in high return Permian Resources projects 2018 Permian Resources Capex ( Bn) Full cycle project RORs1 75% 0.1 2.8 0.1 Operational efficiencies accelerating TTM…
  22. 2Q 2018 Earnings Conference Call – Occidental Petroleum Corp – slide 22
    Permian Resources Value- Permian Resources Production (Mboed) based Production Growth 54% Production Growth +7% From 1Q18 Guidance 2Q production exceeded 235 - 255 June 2018: 213 Mboed mid-point guidance by 8 215 - 225 Mboed 201 +12…
  23. 2Q 2018 Earnings Conference Call – Occidental Petroleum Corp – slide 23
    Occidental Petroleum 2Q18 Highlights Financial Summary and Guidance Permian Resources Update Closing Remarks 24
  24. 2Q 2018 Earnings Conference Call – Occidental Petroleum Corp – slide 24
    Appendix
  25. 2Q 2018 Earnings Conference Call – Occidental Petroleum Corp – slide 25
    Appendix Contents Corporate Value Proposition Social Responsibility, Environment and Governance Permian Updates 26
  26. 2Q 2018 Earnings Conference Call – Occidental Petroleum Corp – slide 26
    Cash Flow Priorities Non-core Midstream Assets Estimated Cash Flows ()1 2.6 Bn of non-core domestic Non-core Midstream midstream assets to be monetized in Assets 3Q18 + CFFO 70 Annual Operating Cash Flows WTI Potential upside…
  27. 2Q 2018 Earnings Conference Call – Occidental Petroleum Corp – slide 27
    YTD 2018 Cash Flow and Cash Balance Reconciliation ( Bn) 3.7 (0.9) (1.2) (2.3) 1.7 0.4 1.4 Beginning Cash CFFO Before Change in Working Dividends Capital Expenditures A&D/Debt Ending Cash Balance 1/1/18 Working Capital…
  28. 2Q 2018 Earnings Conference Call – Occidental Petroleum Corp – slide 28
    Appendix Contents Corporate Value Proposition Social Responsibility, Environment and Governance Permian Updates 29
  29. 2Q 2018 Earnings Conference Call – Occidental Petroleum Corp – slide 29
    Low Carbon Ventures Team Formed to Capitalize on Strategic EOR Position Reducing Oxys Carbon Footprint While Developing Economic Reserves Dedicated business unit Low Carbon Ventures Strategy formed to develop carbon capture,…
  30. 2Q 2018 Earnings Conference Call – Occidental Petroleum Corp – slide 30
    Water Infrastructure Drives Value & Delaware Basin Frac Water Usage Environmental Benefits 2017 Actuals 2018 Plan 11% 10% Fresh Water Increasing Recycled Water Usage 32% Brackish Water 50% from 30% to 50% in 2018 Recycled Water…
  31. 2Q 2018 Earnings Conference Call – Occidental Petroleum Corp – slide 31
    Appendix Contents Corporate Value Proposition Social Responsibility, Environment and Governance Permian Updates 32
  32. 2Q 2018 Earnings Conference Call – Occidental Petroleum Corp – slide 32
    Permian Activity by Operator Net Permian Acreage vs Rig Count Permian Production vs Rig Count 3,000 80 350 40 70 300 35 2,500 Permian Rig Count/1,000 net acre Permian Net Acreage (thousands) Permian Net Production (Mboed)…
  33. 2Q 2018 Earnings Conference Call – Occidental Petroleum Corp – slide 33
    Update…
  34. 2Q 2018 Earnings Conference Call – Occidental Petroleum Corp – slide 34
    Aventine Strategic Relationships that Secure Supply and Lower Costs 3Q 2016 Over 2,700 rail cars of frac sand Design concept approved 2018 Operating Highlights delivered 2Q 2017 60% of OCTG used in NM railed in Acquired land…
  35. 2Q 2018 Earnings Conference Call – Occidental Petroleum Corp – slide 35
    Operational Efficiency & Speed D&C Outperformance Permian Resources Feet Drilled per Day Operational Highlights 18% Increase Single New Mexico frac core delivered 240 frac stages in 839 June setting an Oxy Permian record 749 901…
  36. 2Q 2018 Earnings Conference Call – Occidental Petroleum Corp – slide 36
    Returning to Turkey Track Turkey Track - New Modular Development Area in 2H 2018 Southeast New Mexico Innovative Development Provides Scale Leveraging Permian Scale to Realize Advantages to Regional Areas Value in Smaller Development…
  37. 2Q 2018 Earnings Conference Call – Occidental Petroleum Corp – slide 37
    Greater Barilla Draw Value-Based Development Increases Returns Operating Excellence & Strong Results Barilla Draw Proper Wolfcamp A 10K Continuous Improvement 150 Expanding Basin Leading Results New Well Design - 2Q18 2018 -8 Wells…
  38. 2Q 2018 Earnings Conference Call – Occidental Petroleum Corp – slide 38
    Results in Greater Sand Dunes Area Multi-Bench Development Recent Well Results Target Formation Lateral Peak 24 Hr Peak 30 Oil Barilla Well Name GreaterDraw Type Log Sand Dunes Length (ft) (boed) Day (boed) (%) Brushy Canyon Federal…
  39. 2Q 2018 Earnings Conference Call – Occidental Petroleum Corp – slide 39
    Results in Greater Barilla Draw Area Multi-Bench Development Recent Well Results Target Formation Lateral Peak 24 Hr Peak 30 Oil Barilla GreaterDraw BarillaType DrawLog Well Name Length (ft) (boed) Day (boed) (%) Avalon…
  40. 2Q 2018 Earnings Conference Call – Occidental Petroleum Corp – slide 40
    Permian Resources Delivers Basin Leading Wells Oxy has 25 of the top 50 Wells in the Permian Basin Leading Wells with Less Proppant 10,000 3,000 Competitor 8,000 Average Proppant /ft Proppant /ft IP 24 BOPD 6,000…
  41. 2Q 2018 Earnings Conference Call – Occidental Petroleum Corp – slide 41
    Permian Resources High Value Inventory Permian Resources Inventory 2Q18 12,000 11,207 Increased average length of total 10,8351 10,574 inventory from 7,600 ft to Undeveloped Drilling Locations 7,800 ft 10,000 Midland Basin…
  42. 2Q 2018 Earnings Conference Call – Occidental Petroleum Corp – slide 42
    Permian Resources Net Business Area Acreage Acres1 Resources Unconventional Areas 1.4 Enhanced Oil Recovery Areas 1.1 Significant growth potential in Oxy Permian Total 2.5MM all development areas 650,000 net acres within Net…

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