Occidental Petroleum Corporation Sanford C. Bernstein 30th Annual Strategic Decisions Conference 2014 Stephen I. Chazen President and Chief Executive Officer May 29 30, 2014
Key Messages Generate shareholder value by employing our current strategy: Stronger financial returns Continued improvement in our capital and drilling efficiency with the goal of generating higher earnings from our oil and gas…
Why own Oxy Large Integrated Majors Independent E&Ps Company Market Cap (B) Company Market Cap (B) XOM 444 COP 94 RDS 251 Oxy EOG 54 CVX 240 Uniquely APC 51 TOT 161 Positioned APA 34 BP 156 PXD 28 ENI 93 MRO 25 Characteristics…
What Is Our Philosophy & Strategy Overriding Goal is to Maximize Total Shareholder Return We believe this can be achieved through a combination of: Growing our oil and gas production by 5% to 8% per year on average over the long…
Cash Flow Priorities 1. Base/Maintenance Capital 2. Dividends 3. Growth Capital 4. Share Repurchase 5. Acquisitions 5
Oxy Is Primarily A Domestic Oil Producer Oil & Gas Production First Quarter 2014 (Million barrels of oil equivalent) 17 26% 26 39% 42 41 7 63% 61% 11% Oil NGLs Gas Domestic International 7
Improvement in Capital Efficiency & Operating Costs Domestic Operating Costs Improved capital efficiency in the U.S. by 24% last year vs. 2012, saving 900 mm of capital. 17.43 Permian 50% of improvement 14.43 (/boe) California…
Strong 2013 Oil & Gas Reserves Replacement 2013 Overall Reserve (in millions of BOE) 142 3,483 Replacement Ratio of 169% 32 3,296 (278) 291 Over 90% of reserves added through our organic development program. FY12 Reserves…
Capital Spending Program 2014 Capital Program expected to be 10.2 billion* Capital increase includes 400 mm Capital Investment ( bn) allocated to each of our CA and Permian operations largely for additional drilling 10.2 to…
Capital Spending Program Long-term investment 25% + Long-term investment 20% + Exploration Exploration 5% 6% Chemicals & Permian Chemicals & Permian U.S. Midstream 20% U.S. Midstream 22% 12% 13% Americas Oil &Gas Americas Oil…
Permian Basin Overview Permian Resources is the cornerstone growth operation of the domestic business. Substantial acreage position with significant resource development potential. We have used our knowledge and experience to…
Permian Basin Capital Spending Permian Basin Capital Two business units: ( in mm) Permian EOR: CO2 and water 2,190 floods. Permian Resources: growth 1,722 oriented unconventional. 1,530 The entire 450 mm increase in 1,107 capital…
Permian Basin Production and Expenses Production We expect the Permian EOR business 212 222 to offset its decline in 2014 and grow 1.4%. The Permian Resources business is expected to grow oil production faster, mboe/d by 20% -…
Permian Resources Permian Basin Plays We see the largest near-term growth in the Midland Basin, which represents 2/3 of Matador Arch our currently assessed resource potential. Northwest Shelf Our Delaware Basin prospective acreage…
Permian Resources Acreage in Select Permian Plays (Thousands of Acres) Believe we have one of the most promising and Delaware Basin Gross Net under-exploited unconventional portfolio in the Avalon 365 130 basin. Bone Spring 1 Sand 540…
Permian Resources Shift to Horizontal Drilling Drilled 49 horizontal wells in 2013. Improvements in our well costs, Development Wells our own results as well as those of neighboring operators have Horizontal 345 given us the…
Permian Resources 1Q14 Results Permian Resources Permian Resources Goals 5% production growth Q / Q Continue evaluating potential 328 million CapEx across acreage position. Averaged 22 rigs (15 horizontal) Pilot development…
Permian Resources Midland Basin Focus Areas S. Curtis Ranch & Dora Roberts 800 drilling locations in S. Curtis & DR. 12 horizontal wells on production during 1Q14, focused on Wolfcamp B; production 91% liquids. Avg. drilling time of…
Permian Resources Texas Delaware Basin Focus Area - Barilla Draw 5 Wolfcamp Horizontals 1A, 2B, 2C A & B benches averaged: IP 1,150 boepd 30 Day Rate 760 boepd 88% Liquids 5 Wolfcamp wells brought on production in A, B and C…
Permian Resources SE New Mexico New Mexico Permian 26 Hz wells drilled (since end of 2012) 17 Bone Spring IP 700 boepd 30 Day Rate of 400 boepd 90% Liquids 9 Brushy Canyon IP 1,100 boepd with ESP (3 wells) Average drilling…
Transition to Horizontal Drilling Should Accelerate Permian Resources Production Growth in 2H14 Permian Resources Q4E 2014 Production 76 - 82 mboed 13%- 16% Growth Q3E Q2E 72 - 76 mboed 57 Q1A 68 - 72 mboed 50 Texas Delaware 67…
Permian Resources Summary Expect to average 26 rigs during 2Q14. Identified several key ways to improve well performance and completion techniques. Transition from gel to slick water fracs. Reviewing cluster spacing. Evaluating…
Oxys Permian EOR Operations Current EOR operations 68% of Oxys Permian production 2 billion per year of free cash flow Vertically integrated infrastructure CO2 source fields with development potential Long term CO2 purchase…
Permian Summary Significant Position with Key Competitive Advantages Large and diverse portfolio creates a variety of growth options. More than 2.5 billion BOE in reserves and potential resources with 15+ years of development and…
California Resources Corporation California Resources Corporation will be a growth oriented business with a large resource base and self-sufficient cash flow. Pure play California resources company able to spend virtually all of its…
California Production Production Outlook We expect production to grow from 154 mboe/d to 190 mboe/d in 2016, a 7.5% CAGR. 190 Water & steam floods will contribute 80% of production growth. 160 154 138 148 90% of growth from…
Middle East / North Africa Overview Oman, Qatar & United Arab Emirates 70% of MENA Production 85% of Income from Operations 65% of Capital Nearly all free cash flow 28
Middle East / North Africa Overview Over 20 bn free cash flow in last 15 years. Expect to generate over 2.0 bn annual free cash flow after Al Hosn Gas Project start-up. Invested 9 bn of capital since 2010, 75% in Oman, Abu Dhabi…
Long-term Growth Investments Some of the longer lead time investments we have been making over the past couple of years will start contributing to our results this year. Specifically: The Al Hosn Gas Project is expected to start…
Future Growth Al Hosn Gas Project Al Hosn Gas Project Plant will be able to process 1 Bcfd of field gas and separate it into sales gas, condensate, NGLs and sulfur. Oxys net production expected to be 200+ MMSCFD of sales gas and 20+…
Future Growth The BridgeTex Pipeline Project Goal is to maximize our oil price Oxy spending 400 mm to develop the BridgeTex pipeline as a JV with realizations, particularly for the oil Magellan Midstream Partners; produced in our…
Future Growth Chemicals OxyChem Ingleside Ethylene Cracker We have formed a 50/50 JV with Mexichem to build a world scale ethylene cracker at the OxyChem plant in Ingleside, TX. Construction on the Ingleside cracker project is…
Remaining Occidental Business Q: What does Oxy look like after the separation of California Resources Corporation into an independent and separately traded company A: Very similar to the current Oxy, although somewhat smaller.…
Remaining Occidental Business Oil and Gas Focus Areas OxyChem United States Leading position High FCF, moderate in the Permian Basin. growth business. Permian Resources is a growth driver. Oxy Midstream Integrated pipeline and…
Improving ROCE Return on Capital Employed Improved capital efficiency and operating cost structure. 15% Long-lead-time project start-ups: Al Hosn Sour Gas, BridgeTex Pipeline and the New Johnsonville Plant. 12% Separation of our…
Free Cash Flow from New Projects Offsets California Separation We expect that new operating cash flow from long lead-time projects combined with significant reductions in spending will more than offset the cash flow generated by the…
Share Repurchases We expect that we will be able to reduce our share count by 40 - 50 mm through the dividends from the California separation and by 25 mm shares from the monetization of our remaining interest in PAGP. Coupled with…
Illustrative 2015 Capital Program Separation of California and the start-up of Al Hosn and BridgeTex should reduce 2015 Capital by 3 billion, partly offset by capital for growth projects. 10,200 2,100 750 900 - 1,400 8,000 -…
Earnings from Production Growth and Projects Domestic production growth and start-up of the BridgeTex and Al Hosn projects are expected to offset earnings from the California separation. After-tax earnings ( in bln) 5.6 1.1* 0.5…
Illustrative EPS Improvement from Production Growth, New Projects & Share Repurchases EPS improvement driven by Domestic production growth, start-up of BridgeTex and Al Hosn projects and, share repurchases. After-tax earnings ( in…
Loading...
