Occidental Petroleum • OXY & APC: Positioned for Success • Sustainable Value Creation • Delivering Through Superior Execution • Transaction Overview • Anticipated Timeline: Closing 2H19 • Pathway to Integration • Disciplined…
Permian Conventional • 1.4 MM net acres • 2 Bboe of resource potential • 1 Bboe of resource < $6/boe F&D3 • EOR advantage: scale, capability, reservoir quality and low-decline production • CCUS potential for economic growth and…
Focused on Returns Cash Flow Generation Operational Excellence Integrated Business ? Sector leading returns, achieved 14% ROCE and 27% CROCE ? 45% of CFFO returned to shareholders ? Returned $3.6 B to shareholders including $1.3 B…
6 58% 1% 41% 18% 67% 15% 41% 37% 22% Q4 2018A Production (Mboed) 5 6 4 Llanos Norte Basin and Magdalena Basin 30 year production history in Oman Oman 2nd Largest Oil Producer in Offshore Qatar Qatar 30 Year Joint…
2018 Return On Capital and Return Of Capital OXY -5% 0% 5% 10% 15% 20% 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% ROCE (%) Total Yield1 (%) 1Total Yield = (Dividend + Repurchase) / Market Capitalization on December 31, 2018 2See the…
Occidental Petroleum • OXY & APC: Positioned for Success • Sustainable Value Creation • Delivering Through Superior Execution • Transaction Overview • Anticipated Timeline: Closing 2H19 • Pathway to Integration • Disciplined…
Transaction Merits • Highly accretive to CFPS and Free CFPS after dividends • $3.5 B free cash flow improvements through synergies and capital reduction • $10 - 15 B of planned portfolio optimization and free cash flow support rapid…
Oxy & Anadarko: Creating A High Return Cash Generating Energy Company Note: CROCE calculated as Net Income + After Tax Interest Expense + DD&A divided by Average Capital Employed 1Assumes $60/bbl WTI, $65/bbl Brent, $3.00/MMBtu…
Premier, Complementary Global Asset Portfolio ? #1 Producer in the Permian ? #1 in CO2 EOR Projects ? #1 Producer in the DJ Basin ? #1 Producer in the Uinta Basin ? #1 Independent Producer in Oman ? #4 Producer in Gulf of Mexico ?…
Significant Identified Synergies with Potential Upside Expected Pre-Tax Annual Synergies and Capital Reduction ($ B) Procurement & Supply Chain Domestic Capital and Operating Efficiency • Transition to full, efficient development…
Delivering Value • Continued commitment to return of capital through growing the dividend and share repurchases over time • Debt reduction via portfolio optimization and free cash flow • Deliver 5% production growth 1Stand…
Occidental Petroleum • OXY & APC: Positioned for Success • Sustainable Value Creation • Delivering Through Superior Execution • Transaction Overview • Anticipated Timeline: Closing 2H19 • Pathway to Integration • Disciplined…
Continuous Improvement in Permian Resources Well Performance • Subsurface Characterization • Data Analytics • Innovative Well Designs • Oxy Drilling Dynamics • Focused Development 2015 2016 2017 2018 ? 147% Improvement…
Oxy’s Play Leading Delaware Basin Performance Source: IHS Enerdeq as of 4/17/2019, horizontals with 6 months oil production available since September 2017 and laterals >500 ft 1NPV calculations based on $55 WTI and $3.00 NYMEX, assumes…
Delaware Basin – Synergistic Assets Delaware Basin Greater Sand Dunes Greater Barilla Draw Oxy is competitively advantaged with experience in Delaware Basin geology and regional supply logistics • APC’s acreage is located in the…
Top 100 Permian Basin Wells 6 Month Cumulative Oil Top 100 Wells Basin Leading Wells with Less Proppant Oxy has 23% of the Best Wells, While Only Drilling 4% of Total Permian Wells Source: IHS Enerdeq as of 4/17/2019, horizontals with…
Occidental Petroleum • OXY & APC: Positioned for Success • Sustainable Value Creation • Delivering Through Superior Execution • Transaction Overview • Anticipated Timeline: Closing 2H19 • Pathway to Integration • Disciplined…
Transaction Details ? Oxy formally enters agreement to acquire Anadarko on May 9, 2019 –$59.00 cash and 0.2934 Oxy shares per Anadarko share –Equity purchase price of $38 B –Total transaction value of $57 B (including Western…
Occidental Petroleum • OXY & APC: Positioned for Success • Sustainable Value Creation • Delivering Through Superior Execution • Transaction Overview • Anticipated Timeline: Closing 2H19 • Pathway to Integration • Disciplined…
Anticipated Timeline May 9, 2019: Oxy formally enters agreement to acquire Anadarko Prepare and file HSR, Form S-4 and proxy statement/ prospectus Receive SEC comments Prepare and file amendments to Form S-4 Distribute…
Occidental Petroleum • OXY & APC: Positioned for Success • Sustainable Value Creation • Delivering Through Superior Execution • Transaction Overview • Anticipated Timeline: Closing 2H19 • Pathway to Integration • Disciplined…
Designed integration architecture ? Deployed top talent to lead integration teams, supported by external experts ? Began town halls at multiple Anadarko sites ? Strengthening analysis to support synergy capture ? Developed clean…
Integration Objectives Deliver Value Execute a Flawless Day-1 Build a World Class Occidental + • Leverage opportunities broadly across functions, geography, and business • Optimize capital allocation and financial structure of…
Cash Flow Priorities for Combined Company • Maintain low cost production Maintenance Capital base • Maintain and grow current dividend per share at a sustainable level Sustainable Dividend • Reduce combined capital spend to…
Portfolio Optimization $10 – 15 B •$10 – 15 B Planned divestitures of non-core assets •Within 12 – 24 months $8 B •Total to purchase Africa assets: Algeria, Ghana, Mozambique and South Africa •$8.8 B Gross Proceeds $2 – 7 B…
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