Occidental Petroleum Corporation · NYSE:OXY
Occidental Petroleum — Merger or Acquisition (April 2019)
29 slides from Occidental Petroleum's merger presentation, Apr 24, 2019
Slide 1: Occidental Proposal to Acquire Anadarko
Occidental Proposal to Acquire Anadarko April 24, 2019
Slide 2: Cautionary Statements: Forward-Looking Statements
Cautionary Statements Forward-Looking Statements Any statements in this presentation about Occidental Petroleum Corporation’s (“Occidental”) expectations, beliefs, plans or forecasts, including statements regarding the proposed transaction between Occidental and Anadarko Petroleum Corporation (“Anad
Slide 3: Cautionary Statements: No Offer or Solicitation
Cautionary Statements No Offer or Solicitation This presentation does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sa
Slide 4: Cautionary Statements: Non-GAAP and U.S. Investors
Cautionary Statements Use of non-GAAP Financial Information This presentation includes non-GAAP financial measures. Where available, reconciliations to comparable GAAP financial measures can be found on Occidental's website at www.oxy.com. Occidental is unable to provide a reconciliation of non-GAAP
Slide 5: Compelling Strategic & Financial Merits
Compelling Strategic & Financial 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 deleveraging • Oxy’s shale, Enhanced Oil Recover
Slide 6: Proposal Details
Proposal Details Oxy proposal to acquire Anadarko for $76.00 per share –$38.00 cash and 0.6094 Oxy shares per Anadarko share –Equity purchase price of $38 B Structure and –Total transaction value of $57 B (including Western Midstream debt and Consideration non-controlling interest) Offer price i
Slide 7: Oxy & Anadarko: Creating A High Return Cash Generating Energy Company
Substantial Scale Industry-Leading Returns Disciplined Growth Oxy & Anadarko: >$100 B 20%+ 2021 PF $3.12/share Growing Dividend and CROCE Enterprise Value (1) Creating A High Attractive mix of U.S. unconventional, global Strong mix of stable free cash 5% flow, world-class growth, Full-cycle producti
Slide 8: Premier, Complementary Global Asset Portfolio
Premier, Complementary Global Asset Portfolio #1 Producer in the Permian #4 Producer in Gulf of Mexico #1 in CO2 EOR Projects Leading Positions in Algeria and Colombia #1 Producer in the DJ Basin Top 3 Producer of PVC, Chlorine, and Caustic Soda #1 Producer in the Uinta Bas
Slide 9: Well Positioned, Balanced Global Asset Portfolio
Well Positioned, Balanced Global Asset Portfolio Q4 2018A Production (Mboe/d) Oman Qatar UAE Colombia 1% 7 8 9 10 30 year production 2nd Largest Oil Producer 30 Year Joint Venture Llanos Norte Basin and history in Oman in Offshore Qatar with ADNOC Magdalena Basin 41% Oxy 700 58% 4 5 3 2 1 6 14 8 9 1
Slide 10: Enhances Oxy as The Leading Operator in the Permian
Enhances Oxy as The Leading Operator in the Permian Combined Permian Position Current Permian Net Production (Mboe/d) 600 500 24% 400 Midland Basin 300 76% 200 100 0 EOG(3) (3) FANG(2) RDS CVX LPI PF OXY PXD APA XEC APC DVN OXY CXO XOM CBP • Adds thousands of drilling locations in “Core of the Core”
Slide 11: Significant Identified Synergies with Potential Upside
Significant Identified Synergies with Potential Upside Expected Pre-Tax Annual Synergies and Capital Reduction ($ B) $1.5 $3.5 Capital Synergies: $0.9 B $0.9 Opex/G&A Synergies: $0.6 $1.1 B $0.5 Capital Reduction: $1.5 B Permian Capital and Opex Savings Procurement & Supply Chain General Overhead &
Slide 12: Oxy Has 23% of the Best Wells While Drilling 4%
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 Competitors use 27% more Proppant: >$500 M Drilling 4% of Total Permian Wells Incremental Cost per Well and Increased 25 3,500 Parent/Child Risk Competito
Slide 13: Permian Expertise Applied Worldwide
Permian Expertise Applied Worldwide Oman Example: Increased from 5 productive horizons to ~17 producing and appraisal horizons ARUMA NATIH A NATIH A Subsurface Characterization Expertise NATIH B UNC NATIH C • Apply learnings from U.S. Permian NATIH C NATIH D unconventional business NATIH D NATIH E S
Slide 14: Delivering Value: Pro Forma Per Share Accretion
Delivering Value Pro Forma Per Share Accretion(1) • Continued commitment to 2020 +25% 2021 +15% return of capital through growing dividend and share >10X >4X repurchases • Debt reduction via CFPS (2) Capex (2) Dividend FCF Free CFPS CFPS (2) Capex (2) Dividend Free CFPS FCF portfolio optimization an
Slide 15: Appendix – World Class Upstream, Midstream, Chemicals, and Low Carbon Businesses
Appendix – World Class Upstream, Midstream, Chemicals, and Low Carbon Businesses 15
Slide 16: Oxy Consistently Returns Capital to Shareholders
Oxy Consistently Returns Capital to Shareholders 5,000 Dividend Sustainable at $40 WTI $3.50 4,500 Consecutive Dividend Growth Since 2002 - 12% CAGR $3.00 $ MM Returned to Shareholders 4,000 $33 B of Total Capital Returned Since 2002 Over 70% of Market Capitalization Returned to Shareholders
Slide 17: Oxy's Recent Major Projects Delivered On-time and On-budget
Oxy’s Recent Major Projects Delivered On-time and On-budget Complex, Major Project Capability Domestic Projects • Ingleside, TX – Ethylene Cracker • Ingleside, TX – Oil Terminal Industry-leading execution • Geismar, LA – 4CPe Plant performance Compared to industry average of >20% capital overruns an
Slide 18: Leading Position in the DJ Basin
Leading Position in the DJ Basin DJ Basin – Free Cash DJ DEVELOPMENT AREA Flow and 400,000+ net acres • 250+ Mboepd of production Growth Oil Treating Online • Additional NPV uplift from mineral interest ownership Potential ~155 MBOPD Latham I Plant • 10+ years of remaining undrilled Online by Mid-Ye
Slide 19: Gulf of Mexico Position
Gulf of Mexico Position Gulf of • Significant cash flow generation Mexico – • Infrastructure in place Stable Free allows for ample tie- Cash Flow back opportunities • Three year outlook for production 140 Mboe/d • Rate of Return and breakeven competitive with best U.S. onshore wells Source: Anadarko
Slide 20: International Portfolio
International Portfolio Middle East Colombia • Strong performance record and technical • High margin opportunities expertise • Acquired six blocks totaling 2 MM gross • Recently awarded onshore Blocks 72, 51 acres and 700 MMboe of resources in and 65 in Oman (3.7 MM gross acres) November 2018 • Rece
Slide 21: Mozambique LNG Progressing Towards FID
Mozambique LNG Progressing Towards FID Large Scale LNG Project: Mozambique • Total Five-Year Net Investment(1) is ~$2.0 – $2.5 B • Net Recoverable Resource 750 MMboe • Liquification Capacity of 12.88 MTPA • Competitive Onshore Costs of $600/tonne Source: Anadarko April 2019 Investor Book (1) Total f
Slide 22: OxyChem: Market Leading Position
OxyChem: Market Leading Position OxyChem at a Glance Earnings Highlights • Major global exporter of all core products • Positive cash flow generation throughout cycle • Top tier global producer in every product produced • Integrated assets capture > Largest merchant caustic soda seller in the world
Slide 23: Leading Midstream Assets and MLP
Leading Midstream Assets and MLP NM Selected Domestic Asset Overview Oxy Midstream & Marketing Western Midstream DJ Basin • Domestic: • ~$600 MM of distributions from owned • Permian EOR infrastructure MLP units including 13 processing plants • Texas/New Mexico: • Electric power co-generation plants
Slide 24: Scale and Expertise to Lead Energy into a Low Carbon Future
Original Low Carbon Ventures Strategy Transaction Expands Mission Scale and Expertise to • Leverage Oxy's CO2 enhanced EOR • Apply Oxy’s Low Carbon Strategy to Lead Energy infrastructure and expertise for economic and social benefit Anadarko’s asset base into a Low • Sequestration of anthropogenic C
Slide 25: Appendix – Permian Performance
Appendix – Permian Performance Enhancement Potential not Captured in Synergies 25
Slide 26: Continuous Improvement in Oxy Permian Resources Well Performance
Continuous Improvement in Oxy Permian Resources Hz Unconventional Well Performance Permian Resources Well Performance 250 147% Improvement since 2015 • Subsurface 25% Improvement from 2017 to 2018 Characterization 200 2018 Cumulative Mboe • Data Analytics 150 2017 2016 • Innovative Well Designs
Slide 27: Oxy's Play Leading Delaware Basin Performance
Oxy’s Play Leading Delaware Basin Performance Average 6 Month Cumulative Oil by Operator 160 140 Oxy’s Subsurface Knowledge, Data 120 Analytics and Execution Drive Basin 100 Leading Results Cumulative Mbo 80 60 Top Delaware Basin Operator 40 • 74% better 6 month production than APC 20 0 MRO PE D
Slide 28: Appendix – Other
Appendix – Other 28
Slide 29: Unique Scale and Industry Leading Returns
Unique Scale and Industry Leading Returns Current Production (Mboe/d) Current Dividend Yield 4.9% 38.0% 58.0% 30.3% 3,277 % Permian of Current Production 5% 5% 5% 1,401 700 2% 579 Major Average PF Oxy Oxy Top 10 Independent PF Oxy Oxy Major Average Top 10 Independent Average Average 2021E Free Cash
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