Second Quarter Earnings Conference Call Occidental Petroleum Corporation August 1, 2019
Occidental Petroleum Second Quarter Highlights Financial Summary and Guidance Transaction Update & Closing Remarks 3
2Q19 Highlights Return of Cash Returned 600 MM (33% of CFFO before working capital) through dividend Dividend Increased dividend for 17th consecutive year CROCE Continuing to deliver top tier returns with CROCE1 of 22% Better…
Midland Basin Joint Venture with Ecopetrol Midland Basin Strategic Partnership Deal Structure Oxy and Ecopetrol entered strategic partnership to develop 97,000 net acres in the Midland Basin JV ownership 51% Oxy / 49% Ecopetrol JV…
Oxy Consistently Returns Capital to Shareholders Over 34 B of Total Capital Returned Since 2002 5,000 3.50 Dividend Sustainable Long-term at 40 WTI 4,500 Consecutive Dividend Growth Since 2002 - 11% CAGR1 3.00 4,000 Over 90% of…
Occidental Petroleum Second Quarter Highlights Financial Summary and Guidance Transaction Update & Closing Remarks 7
2Q19 Results Core diluted EPS 0.97 Reported diluted EPS 0.84 2Q19 Actual versus Guidance Boed Midpoint Reconciliation 2Q19 CFFO before working capital 1.8 B Permian Resources execution +11,000 and well productivity 2Q19 capital…
2019 Guidance Oil & Gas Segment Exploration Expense FY 2019E Production 40 MM in 3Q19E Total production of 718 - 729 Mboed 130 MM in FY 2019E Permian Resources production of 283 - 287 Mboed DD&A FY 2019E International production of…
2020 Oil Hedges Three-Way Costless Collar Objectives Hedging Program Reduces 2020 Breakeven to 80 Short Call 74.09 Low 40 WTI range 75 70 Hedged 300 Mbod with Three-Way Costless 65 Short Put 45 Long Put Collars 55 Maintain…
Occidental Petroleum Second Quarter Highlights Financial Summary and Guidance Transaction Update & Closing Remarks 11
Positioned To Be The Innovative and Sustainable Energy Leader Technical Leader in Shale, CO2 Enhanced Oil Recovery, and Low Carbon Business Low Cost Leader through Large Scale Portfolio of Complementary Assets Return of Capital…
Amplifies and Strengthens Our Value Proposition Expected Metrics for Combined Company 2x FCF after dividend vs prior 2022 plan1 2021 FCF yield of 12%2 2x cash flow upside to oil price with breakeven at 40 WTI Expands cash margin…
Premier, Complementary Global Asset Portfolio 1 Producer in the Permian 4 Producer in Gulf of Mexico 1 in CO2 EOR Projects Leading Position in Colombia 1 Producer in the DJ Basin Top 3 Producer of PVC, Chlorine, and Caustic…
Oxys Combined Integrated Portfolio Oil & Gas OxyChem Midstream Focused in world class Leading manufacturer of Integrated infrastructure and basins with a history of basic chemicals and marketing provides access to maximizing recovery…
Delaware Basin Synergistic Assets Oxy is competitively advantaged with experience in Oxy Aventine - Maintenance and Logistics Hub Delaware Basin geology and regional supply logistics Anadarkos acreage is located in the middle of…
Leading Delaware Basin Operator 6 Month Cumulative Oil Top 100 2018 Wells1 12 Month Cumulative Oil Top 100 2018 Wells2 Oxys subsurface expertise delivers Basin leading wells Oxy has 20%+ of the best wells, while only drilling 7% of for…
Basin Leading Improvement in Permian Resources Hz Unconventional Well Performance Well Performance 90 Day Cum Improvement 180 Day Cum Improvement 4D Frac Modeling +220% from 2015 to 2019 +147% from 2015 to 2018 250 +22% from 2018 to…
Permian Execution Excellence Permian Resources Next generation 4D frac model enhancing landing, spacing, and Subsurface Technical Basin-leading minimizing parent child impacts Excellence Wells Oxy has the most top 100 wells in the…
Scale and Expertise to Lead Energy into a Low Carbon Future Implementing Low Carbon Business Strategy Across Oxy + Anadarko Advancing leading-edge, low carbon technologies and business solutions to create value for Oxys businesses and…
Cash Flow Maintain low cost production Priorities for Maintenance Capital base Combined Maintain and grow current Company Sustainable Dividend dividend per share at a sustainable level Deleveraging target expected to be met Commitment…
Sustained Low Price Dividend Coverage at 40 WTI 2021 Cash Flow Breakeven at 40: 10 Dividend Covered with Flat Production 8 6 Cash Flow ( B) 4 Cash Flow Breakeven Current at 40 WTI Dividend 2 2.4 / 45 Brent 0 1Q19…
Excess Cash Generation Above Breakeven 8 2021 Excess Cash Generation After Dividend1 Production Growth 5% Capex 6.6 B 6 Production Growth 5% B 4 Capex 6.6 B Production Growth 5% 2 Capex 6.6 B Flat Production Capex 3.9 B…
Measures of Success Milestones 2019 Divest 10 - 15+ B Advance close of Africa asset sale and Midland Basin JV assets Continue to execute deleveraging strategy Launch procurement and supply chain optimization Capture 2+ B annual…
Measures of Success Milestones 2020+ Divest 10 - 15+ B Complete non-core asset divestitures assets SG&A optimization Capture 2+ B annual Merge Oxys distinctive operational expertise with differentiating APC cost synergies practices…
Innovative and Sustainable Energy Leadership The New Oxy has greatly enhanced cash generating capability through commodity cycles Low Cost Portfolio Increasing Return of Capital Complementary and low risk portfolio Cash flow growth…
Appendix Contents Oxy / Anadarko Transaction Financial Information and Governance Oil and Gas Updates 27
Oxy and Anadarko Integration Integration Approach Progress APC shareholder vote on Build comprehensive August 8th 2019 with closing understanding of current anticipated shortly thereafter Today operating models and plan integration…
Key Day 1 Focus Areas Readiness to Operate Assets Financial IT Readiness and Critical Contractor Safely Reporting Connectivity Continuity Day 1 Employee Organizational Retention of Key Communication Delegation of Design…
Appendix Contents Oxy / Anadarko Transaction Financial Information and Governance Oil and Gas Updates 30
Cash Flow Sensitivities Pre APC Acquisition Oil & Gas Annualized cash flow changes 130 MM per 1.00 / bbl change in oil prices 100 MM per 1.00 / bbl change in WTI prices 30 MM per 1.00 / bbl change in Brent prices Annualized cash…
2019 Cash Flow and Cash Balance Reconciliation 3.6 (1.2) B (0.2) (2.5) 3.0 (0.9) 1.8 Beginning Cash CFFO Before Dividends Share Repurchases Capital Expenditures Working Capital / Ending Cash Balance 01/01/19 Working…
Highly Skilled and Diverse Board Provides Strategic Oversight Focused on Creating Shareholder Value Independence Recently added Robert Shearer to the board Over 35 years experience in securities and leading investment management…
Appendix Contents Oxy / Anadarko Transaction Financial Information and Governance Oil and Gas Updates 34
Delaware Basin Development Expertise Oxys Subsurface Expertise in the Delaware Basin Barilla Draw Type Log Greater Sand Dunes Provides Significant Value Opportunity Leading subsurface and development concepts that can be quickly…
Oxys Play Leading Delaware Basin Performance Average 6 Month Cumulative Oil by Operator Oxys Subsurface Knowledge, Data Analytics and 160 Execution Drive Basin Leading Results 140 Top Delaware Basin Operator 120 Highest 6 month…
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