Occidental Petroleum Corporation · NYSE:OXY
Occidental Petroleum — Q4 2009 Earnings Presentation
21 slides from Occidental Petroleum's earnings presentation, Jan 28, 2010
Slide 1: Fourth Quarter 2009 Earnings Conference Call
Fourth Quarter 2009 Earnings Conference Call January 28, 2010 Quarter 2009 Earnings Conference Call January 28, 2010
Slide 2: Quarter 2009 Earnings - Highlights
2 • Net Income - $938 Million vs. $443 Million in 4Q08 – EPS $1.15 (diluted) vs. $0.55 in 4Q08. – 4Q09 net income includes after-tax non-core charges mostly consisting of a $115 mm impairment of certain Argentine producing properties. Quarter 2009 Earnings - Highlights • Core Results - $1.1 Billion
Slide 3: Oil & Gas Segment Variance Analysis - 4Q09 vs. 4Q08
3 ($ in millions) 4Q 08 Sales Price Sales Volume Exploration Expense All Others* 4Q 09 $996 $1,813 $746 $83 $35 $47 *All Others include: Lower FX gains and higher DD&A rate partially offset by lower operating costs. – The increase was due to higher crude oil prices and sales volumes and lower operat
Slide 4: Oil & Gas Segment
4 4Q09 4Q08 Reported Segment Earnings ($ mm) $1,643 $339 WTI Oil Price ($/bbl) $76.19 $58.73 NYMEX Gas Price ($/mcf) $4.29 $6.97 4Q09 4Q08 Reported Segment Earnings ($ mm) $1,643 $339 WTI Oil Price ($/bbl) $76.19 $58.73 NYMEX Gas Price ($/mcf) $4.29 $6.97 Oxy’s Realized Prices Oxy’s Realized Prices
Slide 5: Oil & Gas Segment - Production (year-over-year)
5 4Q09 ; 4Q08 • Oil and Gas Sales Volumes (mboe/d) 650 620 • Year-over-year sales volume increase includes: – + 23 mboe/d from Oman and Bahrain; – + 6 mboe/d from Argentina, and; – + 13 mboe/d from California operations, excluding Long Beach; – partially offset by - - 7 mboe/d of volumes in the Midd
Slide 6: Oil & Gas Segment - Production (sequential)
6 4Q09 ; 3Q09 • Oil and Gas Sales Volumes (mboe/d) 650 628 • Sequential sales volume increase includes: – Bahrain production and development activities began on 12/1/09; – Argentina volumes increased by 8 mboe/d. 3Q09 included a 9 mboe/d loss due to the Santa Cruz strike; – California volumes, exclu
Slide 7: Chemical Segment Variance Analysis - 4Q09 vs. 4Q08
7 4Q 08 Sales Volume / Mix All Others Operations/ Manufacturing* Sales Price 4Q 09 $217 $33 $27 $42 $35 $288 ($ in millions) *Lower energy costs. – – Reflects the continued weakness in most domestic markets, but in particular U.S. housing, durable goods and agricultural sectors. Quarter 2009 Earning
Slide 8: Midstream Segment Variance Analysis - 4Q09 vs. 4Q08
8 4Q 08 Marketing Gas Processing Power Generation All Others 4Q 09 $170 $81 $132 $18 $6 $1 ($ in millions) $18 Dolphin Pipeline – – The decrease was due to lower year-over-year margins in the marketing business, partially offset by improved NGL margins resulting from lower maintenance expenses, ener
Slide 9: Full Year 2009 Results
9 YTD2009 YTD2008 • Net Income ($ mm) $2,915 $6,857 EPS (diluted) $3.58 $8.34 • Core Results ($ mm) $3,083 $7,348 • Oil and Gas Sales Volumes (mboe/d) 645 601 • Oil and gas cash production costs, excluding production and property taxes, were $10.37 p/boe for 2009, a 15% decline from 2008 full year c
Slide 10: Full Year 2009 Cash Flow
10 $7,600 $40 $1,065 $1,750 $1,230 Available Cash Capex Net Debt Issuance Dividends Acquisitions & Foreign Bonuses Ending Cash Balance 12/31/09 ($ in millions) $3,600 Other $5 Cash Flow From Operations $5,800 Beginning Cash $1,800 12/31/08 Debt Issuance $740 Debt Reduction $700 Full Year 2009 Cash F
Slide 11: Shares Outstanding, Debt and Returns
11 Shares Outstanding (mm) 2009 12/31/09 Weighted Average Basic 811.3 Weighted Average Diluted 813.8 Basic Shares Outstanding 812.0 Diluted Shares Outstanding 814.4 2009 Debt/Capital 9% ROE 10.3% ROCE 9.6% Shares Outstanding, Debt and Returns
Slide 12: 2010 Reporting Changes
12 – – Difference is caused by our PSCs in the Middle East and North Africa where production is immediately taken and sold to pay the local income tax. – – We have treated this as additional revenues but not additional production. – – To simplify our reporting and to conform with industry practice,
Slide 13: 2010 Reporting Changes: Midcontinent Gas
13 – – This was done in order to take advantage of common development methods and production optimization opportunities. – – This business unit will include: • • the Hugoton field; • • the Piceance basin; • • and the bulk of the Permian basin non-associated gas assets, which had been reported as par
Slide 14: 2010 Reporting Changes: Capitalized CO2
14 – – Oxy's policy regarding tertiary recovery is to capitalize costs, such as CO 2 , when they support development of proved reserves and generally expense these costs when they support current production. – – In 2009, we capitalized approximately 50% of the CO 2 injected in the Permian basin. – –
Slide 15: Quarter 2009 Earnings - 1Q10 Outlook
15 • We expect oil and gas sales volumes to increase from the reformatted 4Q09 amount of 722 mboe/d to about 730 to 740 mboe/d in 1Q10 at about current oil prices. – Production increases will come from California, Bahrain and Oman. • Commodity Price Sensitivity - Earnings – At current market prices,
Slide 16: Quarter 2009 Earnings - 1Q10 Outlook (Chemical and tax)
16 • For the Chemical segment: – The international markets remain solid; – In the U.S., we have a competitive advantage against foreign products; however, the housing and construction markets remain weak, which will limit improvement in sales volumes and margins. – Chemical earnings for 1Q10 are exp
Slide 17: 2010 Capital Spending and DD&A
17 • • We expect capital spending for the total year of 2010 to be about $4.3 billion. – – Our capital program will continue to focus on ensuring that our returns remain well above our cost of capital. – – The additional capital from 2009's $3.6 billion level will be allocated to the Oil and Gas seg
Slide 18: California Exploration
18 – – Over the course of a couple of years, we have drilled 39 exploration wells seeking non-traditional hydrocarbon bearing zones in California. – – Of these wells, 12 are commercial and 10 are currently being evaluated; – – Oxy holds 1.3 mm acres of net fee minerals and leasehold in CA, which hav
Slide 19: California Exploration - Kern County Discovery
19 *Production and producing wells as of each of the quarterly earnings disclosure dates. The discovery, which is near Elk Hills, is not below any producing zones. 4Q09 3Q09 2Q09 1Q09 Gross Production* – – Natural Gas (mmcf/d) 145 105 74 28 – – Liquids (mb/d) 7.5 8.5 5 3 – – Total mboe/d 31.7 26.0 1
Slide 20: California Exploration - Kern County Discovery
20 • • Cumulative gross production since the start of production through 12/31/09 has been 19.4 bcf of gas and 1.5 mm barrels of liquids; • • We expect to drill 8 wells in the first half of 2010 focusing on oil drilling and exploring the limits of the field; • • We also expect to add skid mounted ga
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