Occidental Petroleum Corporation · NYSE:OXY
Occidental Petroleum — Q1 2010 Earnings Presentation
18 slides from Occidental Petroleum's earnings presentation, Apr 29, 2010
Slide 1: First Quarter 2010 Earnings Conference Call
First Quarter 2010 Earnings Conference Call April 29, 2010 First Quarter 2010 Earnings Conference Call April 29, 2010
Slide 2: First Quarter 2010 Earnings - Highlights
2 • Net Income - $1.1 Billion vs. $368 Million in 1Q09 – EPS $1.31 (diluted) vs. $0.45 in 1Q09. – For comparability purposes, all prior period volumes, and volume based statistics, such as operating costs per barrel, are being stated on a pretax basis as we previously discussed. First Quarter 2010 E
Slide 3: Oil & Gas Segment Variance Analysis - 1Q10 vs. 1Q09
3 *All Others include: Lower FX gains and higher operating costs. 1Q 09 Sales Price Sales Volume Exploration Expense All Others* 1Q 10 $553 $1,819 $1,385 $85 $2 $132 ($ in millions) $74 Higher DD&A Rate – Results reflect significantly higher commodity prices and higher volumes, partially offset by f
Slide 4: Oil & Gas Segment Variance Analysis - 1Q10 vs. 4Q09
4 *All Others include: Lower operating and administrative costs, partially offset by higher CO 2 costs. 4Q 09 Sales Price Sales Volume Exploration Expense All Others* 1Q 10 $1,813 $1,819 $174 $179 $43 $37 ($ in millions) $69 Higher DD&A Rate – Similar sequential results reflect higher oil and natura
Slide 5: Oxy's Realized Prices and Oil & Gas Segment Earnings
5 1Q10 4Q09 Reported Segment Earnings ($ mm) $1,819 $1,643 WTI Oil Price ($/bbl) $78.71 $76.19 NYMEX Gas Price ($/mcf) $5.39 $4.29 1Q10 4Q09 Reported Segment Earnings ($ mm) $1,819 $1,643 WTI Oil Price ($/bbl) $78.71 $76.19 NYMEX Gas Price ($/mcf) $5.39 $4.29 Oxy’s Realized Prices Oxy’s Realized Pri
Slide 6: Oil and Gas Production Volumes - 1Q10 vs. 4Q09
6 1Q10 4Q09 • Oil and Gas Production Volumes (mboe/d) 743 717 • Sequential production volume increase includes: – In Bahrain, daily volume increases of 2,000 bbl of oil and 126 mmcf of gas; – Domestic operations + 5 mboe/d largely in the Kern County discovery area; – Partially offsetting these incre
Slide 7: Oil and Gas Sales Volumes and Costs - 1Q10 vs. 4Q09
7 1Q10 4Q09 • Oil and Gas Sales Volumes (mboe/d) 726 722 • Sales volumes were lower than the production volumes due to the timing of liftings of 13 mboe/d in the Middle East/North Africa and Latin America, of which 11 mboe/d were in Libya. • Exploration expense was $56 million in 1Q10. • Oil and gas
Slide 8: Oil & Gas Segment Variance Analysis - 1Q10 vs. 4Q09 Factors
8 • As a result of the factors discussed above, 1Q10, compared to 4Q09 benefitted by: – $174 million from higher prices; – $43 million lower exploration expense and, – $62 million of lower cash operating costs and G&A expense. • These gains were offset by: – the effect of lower liftings of $102 mill
Slide 9: First Quarter 2010 Earnings - Chemical
9 4Q 09 Sales Volume/Mix Operations/ Manufacturing* Sales Price All Others 1Q 10 $33 $30 $64 $53 $113 $7 ($ in millions) *Higher energy and feedstock costs. – – Reflects the continued weakness in domestic markets, particularly in the housing and construction sectors, and the significant margin erosi
Slide 10: First Quarter 2010 Earnings - Midstream
10 ($ in millions) 4Q 09 Marketing and Trading Dolphin Pipeline All Others 1Q 10 $81 $94 $21 $13 $5 – Increase in earnings was due to improved margins in the marketing and trading business, partially offset by lower pipeline income from Dolphin from the two-week partial shutdown of the gas plant for
Slide 11: First Quarter 2010 Earnings - Capital Spending
11 • • Capital spending for the first quarter of 2010 was about $850 million. – – Capital expenditures by segment were 80 percent in Oil and Gas, 15 percent in Midstream with the remainder in Chemicals. – – The spending run rate will increase through the year as we ramp up in California, Bahrain and
Slide 12: First Quarter 2010 Earnings - 2010 YTD Cash Flow
12 $3,400 $225 $270 $300 $1,900 Available Cash Capex Debt Reduction Dividends Acquisitions & Foreign Bonuses Ending Cash Balance 3/31/10 ($ in millions) $850 Other $145 Cash Flow From Operations $2,200 Beginning Cash $1,200 12/31/09 – Free Cash Flow for 1Q10 after capex and dividends but before acqu
Slide 13: Shares Outstanding and Debt
13 Shares Outstanding (mm) 1Q10 3/31/10 Weighted Average Basic 812.1 Weighted Average Diluted 813.5 Basic Shares Outstanding 812.2 Diluted Shares Outstanding 813.6 3/31/10 12/31/09 Debt/Capital 8% 9% First Quarter 2010 Earnings - Shares Outstanding and Debt
Slide 14: Oil and Gas Production - 2Q10 Outlook
14 • We expect oil and gas sales volumes to be in the range of 750 to 760 mboe/d at about current oil prices, with production slightly above these levels. • Production volume increases in 2Q10 are expected from the following sources: – Domestically, the Kern County discovery area is expected to show
Slide 15: Oil and Gas Production - 2Q10 Outlook (Middle East, Latin America)
15 • In the Middle East, increases are expected in the Oman Mukhaizna field and in Dolphin where the plant maintenance down-time in 1Q10 is not expected to repeat. • In Latin America, assuming no labor related stoppages, increases are expected in Argentina, where the current run rate is about 2 mboe
Slide 16: First Quarter 2010 Earnings - 2Q10 Outlook
16 • Commodity Price Sensitivity - Earnings – At current market prices, a $1.00 per barrel change in oil prices impacts oil and gas quarterly earnings before income taxes by about $36 mm; – A swing of $0.50 per mm BTU in domestic gas prices has a $31 mm impact on quarterly pretax income; the current
Slide 17: First Quarter 2010 Earnings - 2Q10 Outlook (Chemical, Tax Rate)
17 • For the Chemical segment: – Demand for caustic soda and vinyls is expected to continue to improve in both the US and the international markets. – Improving caustic soda pricing and low natural gas prices will contribute to margin improvement. – The Chemical segment is expected to provide about
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