Occidental Petroleum Corporation · NYSE:OXY
Occidental Petroleum — Merger or Acquisition (May 2019)
24 slides from Occidental Petroleum's merger presentation, May 6, 2019
Slide 1: Revised Occidental Proposal to Acquire Anadarko
Revised Occidental Proposal to Acquire Anadarko Occidental Petroleum Corporation May 6, 2019
Slide 2: Cautionary 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: Transaction Merits Unchanged
Transaction Merits Unchanged • 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 Recovery (EOR), an
Slide 4: 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 5: World Class Global Asset Portfolio With Focus
World Class Global Asset Portfolio With Focus Q4 2018A Production (Mboe/d) 7 Oman 8 Qatar 9 UAE 10 Colombia 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% Status Oxy 700 58% Quo 4 5 1% 3 2 1 6
Slide 6: 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 Position in Colombia #1 Producer in the DJ Basin Top 3 Producer of PVC, Chlorine, and Caustic Soda #1 Producer in the Uinta Basin Leadin
Slide 7: Transaction Updates
Enhanced Offer Transaction Delivered improved proposal to acquire Anadarko $76.00 per share as of May 3, 2019 Updates $59.00 cash and 0.2934 Oxy shares per Anadarko share Planned Sale of Non-Core Assets Binding agreement with Total to divest Anadarko assets in Algeria, Ghana, Mozambique, and Sou
Slide 8: Revised Proposal Details
Revised Proposal Details Oxy proposal to acquire Anadarko for $76.00 per share as of May 3, 2019 –$59.00 cash and 0.2934 Oxy shares per Anadarko share Structure and –Equity purchase price of $38 B Consideration –Total transaction value of $57 B (including Western Midstream debt and non-controlling
Slide 9: Berkshire Hathaway Financing Commitment
Berkshire Hathaway Financing Commitment Flexible, balance sheet friendly acquisition financing Financial support from, and affiliation with, the world’s most renowned Rationale investor Enhances competitive ability to pursue attractive acquisition Capital available at closing $10 B, 8% Cum
Slide 10: Oxy's Leading Delaware Basin Performance
Oxy’s Play Leading Delaware Basin Performance Average 6 Month Cumulative Oil by Operator Oxy’s Subsurface Knowledge, Data 160 Analytics and Execution Drive Basin 140 Leading Results 120 Top Delaware Basin Operator 100 • 74% better 6 month production than APC Cumulative Mbo 80 60 • Oxy pumps less
Slide 11: Delaware Basin – Synergistic Assets
Delaware Basin – Synergistic Assets Oxy is competitively advantaged with experience in Delaware Basin geology and regional supply logistics Oxy Aventine - Maintenance and Logistics Hub • APC’s acreage is located in the middle of Oxy’s core development areas and on trend with Delaware Greater Sand Du
Slide 12: Significant Identified Synergies with Potential Upside
Significant Identified Synergies with Potential Upside Expected Pre-Tax Annual Synergies and Capital Reduction ($ 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 13: Delivering Value
Delivering Value Pro Forma Per Common Share Accretion(1) • Continued commitment to return +30% 2020 +40% 2021 of capital through growing dividend and share repurchases >4X >10X over time • Debt reduction via CFPS (2) Capex (2) Dividend Preferred Free CFPS CFPS (2) Capex (2) Dividend Preferred Free C
Slide 14: Unique Scale and Industry Leading Returns
Unique Scale and Industry Leading Returns Q4 2018 Production (Mboe/d) (1) Current Dividend Yield 4.9% 41.0% 58.0% 30.3% 5% 5% 3,277 5% % Permian of Current Production 2% 1,299 700 579 PF Oxy Oxy Major Average Top 10 Independent Average Major Average PF Oxy Oxy Top 10 Independent Average 2021E Free C
Slide 15: Appendix
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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: 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 18: Basin Leading Wells with Less Proppant
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 19: 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 20: Gulf of Mexico – Stable Free Cash Flow
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 21: 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 22: 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 23: 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
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