Occidental Petroleum Corporation · NYSE:OXY
Occidental Petroleum — Lehman Brothers Twentieth Annual CEO Energy/Power Conference (September 2006)
30 slides from Occidental Petroleum's conference presentation, Sep 5, 2006
Slide 1: Lehman Brothers Twentieth Annual CEO Energy/Power Conference
September 5, 2006 Dr. Ray R. Irani Chairman, President & Chief Executive Officer Lehman Brothers Twentieth Annual CEO Energy/Power Conference
Slide 2: Core Area Growth Projects
Large pipeline of growth projects U.S. California & Permian Latin America Argentina Colombia Middle East & North Africa Libya Oman Qatar United Arab Emirates 2 Core Area Growth Projects
Slide 3: Production Growth Profile
Grow oil & gas production Minimum volume growth of 5 percent per year More likely growth of 7 – 10 percent Maintain top quartile financial returns 3 Production Growth Profile
Slide 4: Oil & Gas ROCE
2005 2004 2003 2002 2001 International Returns (%) 56.56 41.40 31.03 26.08 25.97 WTI ($/Barrel) 36 33 29 37 24 Domestic Returns (%) 26 20 16 10 17 * Net income from continuing operations divided by average capital employed. 4 Oil & Gas ROCE*
Slide 5: Return Targets
New Projects & Acquisitions Domestic .......................... International ..................... 15+% 20+% * Assumes moderate product prices 5 Return Targets*
Slide 6: U.S. – California & West Texas
Principal Properties California (San Joaquin Basin) West Texas (Permian Basin) Reserves & Production Estimated Proved Reserves 56 million BOE Current Production 8,900 BOE/Day 50-50 split between oil & gas Light oil makes up 85% of oil reserves & production Expect significant production growth – prim
Slide 7: Argentina
2005 production – 37,000 BOE/Day 2006 annualized production – 41,000 BOE/Day Inventory of 700 drilling locations 2006: 145 wells Ramp up in future years Increase production to 70,000 BOE/Day by 2011 San Jorge Basin 7 Argentina
Slide 8: UAE / Qatar – Dolphin Project
$4 billion gross capital Oxy’s share 24.5% Project status Pipeline nearly complete Platforms, wells & receiving facilities on schedule Gas processing plant may – or may not – be complete at year-end Production ramp up in 2007 Phase I 8 UAE / Qatar – Dolphin Project
Slide 9: Oman – Overview
Mukhaizna Overview Discovered in 1975 2+ billion barrels of heavy oil Previous peak production - 15,000 barrels/day Transfer of operatorship to Oxy & partners 3-4 years of technical work & negotiation 9 Oman – Overview
Slide 10: Oman – Mukhaizna Project
Project Overview Gross Capital – $3.5 Billion 1800+ wells Central processing facility Water treatment plant Steam generation facilities Pipelines 2006 Work Program $450 – $500 MM (Gross) Drill 65 wells Initial steam injection 10 Oman – Mukhaizna Project
Slide 11: Oxy Libya Holdings
11 Oxy Libya Holdings
Slide 12: Oxy 2006 Exploration Program
12 Oxy 2006 Exploration Program
Slide 13: 2010 Worldwide Production Outlook
Does not depend on exploration success Does not include future acquisitions Does not include new EOR/development projects Does not include swap/sale of mature non-operated properties Range reflects timing differences 13 2010 Worldwide Production Outlook
Slide 14: Additional Growth Opportunities
Base Production ...................... New EOR/development projects Middle East/North Africa ..... Latin America ..................... Exploration .............................. Domestic acquisitions .............. Mature non-operated ............... Total ........................................ 66
Slide 15: Competitive Advantages
Economies of scale Infrastructure Operating experience Large technical data base Strong regional relations 15 Competitive Advantages
Slide 16: Top 10 Permian Oil Producers
2005 Gross Operated Production (Thousand Barrels/Day) 195 74 56 30 26 25 30 24 19 17 OXY CVX KMI APA HES COP XTO PXD XOM DVN Source: 2005 IHS Energy Data 16 Top 10 Permian Oil Producers
Slide 17: 1st Half 2006 ROCE & ROE
Annualized returns ROCE -------------------------------------------- ROE ----------------------------------------------- 22% 25% 17 1 st Half 2006 ROCE & ROE
Slide 18: Enhancing Stockholder Value
Implemented a 2 for 1 common stock split Increased post-split quarterly dividend by 22 percent per common share Post-split dividend rate = $0.22 per share Repurchased 20 million shares on post-split basis for $986 million (February thru June) Authorized repurchase of an additional 20 million post-sp
Slide 19: Financial Plan
Continue to increase the dividend regularly Repurchase shares Reduce outstanding post-split shares to 800 million Keep debt levels low & maintain “A” credit ratings 19 Financial Plan
Slide 20: Conclusion - Focus on Key Metrics
Focus on key performance metrics that drive top quartile financial returns Continue to improve quality of assets Grow reserves at a rate exceeding production Keep finding & development costs low Optimize profit/BOE Optimize free cash flow/BOE Maintain financial discipline Maintain “A” credit rating
Slide 21: Slide 21
Slide 22: Forward-looking statements
Statements in this presentation that contain words such as "will," "expect" or "estimate," or otherwise relate to the future, are forward-looking and involve risks and uncertainties that could significantly affect expected results. Factors that could cause results to differ materially include, but a
Slide 23: Appendix
23 Appendix
Slide 24: Worldwide Oil & Gas Operations
Long Beach Permian Basin Horn Mountain Hugoton Elk Hills Colombia Libya Russia Pakistan Oman U.A.E . Yemen Qatar Argentina 24 Worldwide Oil & Gas Operations . . .
Slide 25: Return on Equity
Percentage 2001 2002 2003 2004 5-Year Average 22 17 21 28 41 2005 28 25 Return on Equity
Slide 26: Return on Capital Employed
Percentage 2001 2002 2003 2004 5 Year Average 13 11 15 20 33 2005 19 See Appendix for GAAP reconciliation. 26 Return on Capital Employed
Slide 27: Reserves Replacement
228 240 357 253 382 168 183 191 190 191 Worldwide Reserve Additions (Million BOE) Worldwide Production (Million BOE) 2001 2002 2003 2004 2005 See Appendix for GAAP reconciliation. 27 Reserves Replacement 3-Year Average 5-Year Average
Slide 28: Finding & Development Costs
1,116 1,122 1,507 1,662 4,283 228 240 357 253 382 Costs Incurred ($ Millions) Reserve Additions (Million BOE) 2001 2002 2003 2004 2005 See Appendix for GAAP reconciliation. 28 Finding & Development Costs 2,484 1,938 3-Year Average 5-Year Average
Slide 29: Finding & Development Costs
2005 2004 2003 2002 2001 2,103 1,508 1,139 930 1,034 2,180 154 368 192 82 4,283 1,662 1,507 1,122 1,116 49 91 76 83 93 Organic Growth Acquisitions Total Organic (% Total) Costs Incurred ($ Million) 382 253 357 240 228 Total Reserve Additions (Million BOE) 29 Finding & Development Costs 3-Year Averag
Slide 30: Chemical Companies Comparisons
OxyChem – 16.7 OxyChem – 22.2 8.0 11.6 2.9 14.0 7.6 7.2 8.2 13.9 11.8 13.0 13.4 11.2 EBIT Percent of Sales EBITDA 12.0 8.1 11.9 10.6 9.9 20.7 19.4 19.4 15.7 15.5 17.3 18.4 Excludes special items. 30 Chemical Companies Comparisons Capitalized Costs and Results of Operations Reconciliation to Generall