Occidental Petroleum Corporation · NYSE:OXY

Occidental Petroleum — Q1 2014 Earnings Presentation

24 slides from Occidental Petroleum's earnings presentation, May 5, 2014

  1. Slide 1: First Quarter 2014 Earnings Conference Call

    Occidental Petroleum Corporation First Quarter 2014 Earnings Conference Call May 5, 2014

  2. Slide 2: First Quarter 2014 Earnings – Highlights

    First Quarter 2014 Earnings – Highlights Results • Domestic oil production (Bbl/d) 274,000 • Total production (boe/d) 745,000 • Core earnings* $1.4 billion • Core diluted EPS* $1.75 • 1Q14 CFFO before WC $2.9 billion • Cash balance @ 3/31/2014 $2.3 billion • 1Q14 Shares repurchased 10.5 million *See

  3. Slide 3: Oil & Gas Segment Earnings

    First Quarter 2014 Earnings – Oil & Gas Segment Earnings 1Q14 vs. 4Q13 ($ in millions) $82 ($155) $2,118 $56 ($39) $37 $2,104 $5 Core Results • 1Q14 $2.1 B • 4Q13 2.1 B • 1Q13 1.9 B 4Q13 Sales Price Sales Lower Higher DD&A Lower All Others 1Q14 Volumes Operating rate Exploration Costs Costs 3

  4. Slide 4: Oil and Gas Total Company Production

    First Quarter 2014 Earnings – Oil and Gas Total Company Production Company-wide Oil & Gas Production (mboe/d) 763 5 (1) (4) 750 (5) 745 1Q13 4Q13 Permian Other Dolphin Other MENA 1Q14 Domestic Maintenance effects 4

  5. Slide 5: Oil and Gas Domestic Production

    First Quarter 2014 Earnings – Oil and Gas Domestic Production Domestic Oil & Gas Production (mboe/d) 478 2 (2) 474 4 470 1Q13 4Q13 Oil NGLs Natural Gas 1Q14 5

  6. Slide 6: 2014 Cash Margin

    First Quarter 2014 Earnings – 2014 Cash Margin ($/boe) • 1Q14 exploration expense $69.92* $70.80* was $55 mm. $66.08* • We expect 2Q14 exploration expense to be ~$80 mm. $53.34 $53.53 Oil & Gas Cash Margin $49.52 Production Costs Taxes other than on Income Controllable production costs $13.93 $14.13

  7. Slide 7: Chemical Segment Core Earnings

    First Quarter 2014 Earnings – Chemical Segment Core Earnings 1Q14 vs. 4Q13 Guidance ($ in millions) 2Q14 expected $41 ($39) to be ~$130 mm. $11 ($5) $136 $128 Core Results • 1Q14 $ 136 mm • 4Q13 128 mm • 1Q13 159 mm 4Q13 Sales Price Sales Volume / Operations / All Others 1Q14 Mix Manufacturing * * H

  8. Slide 8: Midstream, Marketing & Other Segment Earnings

    First Quarter 2014 Earnings – Midstream, Marketing & Other Segment Earnings 1Q14 vs. 4Q13 ($ in millions) $53 ($52) $16 $170 $85 Core Results • 1Q14 $170 mm $68 • 4Q13 $68 mm • 1Q13 $215 mm 4Q13 Marketing & Power Gas Processing Pipelines 1Q14 Trading Generation 8

  9. Slide 9: 1Q 2014 Cash Flow

    First Quarter 2014 Earnings – 1Q 2014 Cash Flow 1Q 2014 ($ in millions) 1Q’14 $6,300 ($240) ($2,200) Debt / Capital 14% Return on Equity* 13% Return on Capital Employed* 11% CFFO before Working Capital changes ($515) $2,900 ($945) ($100) $2,300 Beginning Cash $3,400 12/31/13 Available Cash Working C

  10. Slide 10: 2Q14 & FY 2014 Guidance Summary

    First Quarter 2014 Earnings – 2Q14 & FY 2014 Guidance Summary Oil & Gas Segment * Pre-tax Income • Domestic 2Q 2014 Production* Price Sensitivity Impact − Oil – 7,000 - 9,000 bbls/d growth. (Quarter) Oil +/- $1/bbl = +/- $38 mm − NGLs – flat. – Natural gas – modest decline. NGL +/- $1/bbl = +/- $7 m

  11. Slide 11: Strategic Initiative Update

    First Quarter 2014 Earnings – Strategic Initiative Update • We closed the sale of our Hugoton asset for Strategic Initiatives pre-tax proceeds of $1.3 bn. • We sold ~25% of our interest in PAGP for pre-tax Hugoton Sale proceeds of $1.4 bn in 4Q13. Our remaining interest 18 Mboe/d is worth over $4 bn

  12. Slide 12: Capitalization

    First Quarter 2014 Earnings – Capitalization • We have repurchased more than 20 mm shares since the announcement of our strategic initiatives in 4Q13, of which 10.5 mm shares were purchased in 1Q14. • Remaining shares under the current repurchase program total 26.5 million shares, which we plan to c

  13. Slide 13: California Resources Corporation

    First Quarter 2014 Earnings – 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 cash flow to grow production, res

  14. Slide 14: Remaining Occidental Business

    First Quarter 2014 Earnings – 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 MENA • Al Hosn Project, marketing busin

  15. Slide 15: Permian Basin Overview

    First Quarter 2014 Earnings – 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 gradually shift our program toward hor

  16. Slide 16: Free Cash Flow from New Projects Offsets California Separation

    First Quarter 2014 Earnings – 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 California assets. ~$700 ~$1.1 bn A

  17. Slide 17: Improving ROCE

    First Quarter 2014 Earnings – 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 California business will provid

  18. Slide 18: Share Repurchases

    First Quarter 2014 Earnings – 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 the buyback of the 26.5 million s

  19. Slide 19: 1Q14 Results – Permian Resources

    First Quarter 2014 Earnings – Permian 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 strategies • Drilled 67 wells (25 horizont

  20. Slide 20: Midland Basin

    First Quarter 2014 Earnings – Midland Basin Focus Areas – S. Curtis Ranch & Dora Roberts 18 Horizontal Wells on Production, Mabee – 9,060 acres 12 drilled this year. ~750 boepd IP average ~500 boepd 30 day average ~91% liquids SCR – 10,777 acres • Average lateral length ~6,000 feet. • Piloting incre

  21. Slide 21: Texas Delaware Basin

    First Quarter 2014 Earnings – 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 intervals. NM • Drilling & completion costs averaging $8.5 mm

  22. Slide 22: SE New Mexico

    First Quarter 2014 Earnings – 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 time of 30 days. • Total drilling & completion costs of New Mex

  23. Slide 23: Permian Resources

    First Quarter 2014 Earnings – Permian Resources • Identified several key ways to improve well performance and completion techniques. − Transition from gel to slick water fracs. − Reviewing cluster spacing. − Evaluating optimal lateral lengths. • Expect to average 26 rigs during 2Q14. • For FY 2014,

  24. Slide 24: Conference Call Q&A

    First Quarter 2014 Earnings Conference Call Q&A

Occidental Petroleum — Q1 2014 Earnings Presentation on 6ix