Occidental Petroleum Corporation · NYSE:OXY
Occidental Petroleum — Q1 2011 Earnings Presentation
24 slides from Occidental Petroleum's earnings presentation, Apr 28, 2011
Slide 1: Occidental Petroleum Corporation First Quarter 2011 Earnings Conference Call
EXHIBIT 99.4 Occidental Petroleum Corporation First Quarter 2011 Earnings Conference Call April 28, 2011 1
Slide 2: First Quarter 2011 Earnings - Highlights
First Quarter 2011 Earnings - Highlights • Core Results - $1.6 Billion vs. $1.1 Billion in 1Q10 – Core EPS $1.96 (diluted) vs. $1.35 in 1Q10. • Non-core items amounted to a net after-tax charge of $44 mm, which included: – pre-tax gain of $225 mm from the sale of the Argentine operations; – pre-tax
Slide 3: Oil & Gas Operations
First Quarter 2011 Earnings - Oil & Gas Operations • We reorganized our Permian operations into two business units. – One unit will hold the CO2 flood assets and the other will operate the conventional production. – In connection with these, we moved the production from Southwest Texas, which was pr
Slide 4: Oil & Gas Segment Variance Analysis - 1Q11 vs. 1Q10
First Quarter 2011 Earnings - Oil & Gas Segment Variance Analysis - 1Q11 vs. 1Q10 • Core Results for 1Q11 of $2.5 Billion vs. $1.9 Billion in 1Q10 – Realized prices increased 24% for crude oil in 2011 and 11% for NGL prices on a year-over- year basis but domestic natural gas prices declined 25% from
Slide 5: Oil & Gas Segment - Production Volumes
First Quarter 2011 Earnings - Oil & Gas Segment 1Q11 4Q10 Oil and Gas Production Volumes (mboe/d) 730 714 • The production guidance we gave you in last quarter’s conference call of 740 to 750 mboe/d was at an $85 average oil price assumption. • The actual average 1Q11 oil price reduced our productio
Slide 6: 1Q11 Oil & Gas Production Guidance Reconciliation
First Quarter 2011 Earnings - Oil & Gas Segment 1Q11 Oil & Gas Production Guidance Reconciliation (thousand boe/d) Oil & Gas Production Earlier 1Q11 Guidance Range 740 750 Price Impact (10) (10) Guidance Adjusted for Price 730 740 Iraq Spending Impact (9) (9) 721 731 Weather Impact (7) (7) 714 724 A
Slide 7: Oil & Gas Segment - Sales Volumes
First Quarter 2011 Earnings - Oil & Gas Segment 1Q11 1Q10 • Oil and Gas Sales Volumes (mboe/d) 728 685 • + 6% year-over-year • Sales volumes of 728 mboe/d, which was higher than our guidance of 725 mboe/d, differ from production volumes due to the timing of liftings, principally caused by Iraq where
Slide 8: 1Q11 Oil & Gas Sales Guidance Reconciliation
First Quarter 2011 Earnings - Oil & Gas Segment 1Q11 Oil & Gas Sales Guidance Reconciliation (thousand boe/d) Oil & Gas Sales Earlier 1Q11 Guidance 725 Price Impact (10) Guidance Adjusted for Price 715 Weather Impact (7) 708 Lifting timing 14 722 Actual Sales Volume 728 8 8
Slide 9: Oil & Gas Segment - Earnings and Realized Prices
First Quarter 2011 Earnings - Oil & Gas Segment 1Q11 1Q10 Reported Segment Earnings ($mm) $2,468 $1,861 WTI Oil Price ($/bbl) $94.10 $78.71 NYMEX Gas Price ($/mcf) $4.27 $5.39 Oxy’s Realized Prices Worldwide Oil ($/bbl) $92.14 $74.09 Worldwide NGLs ($/bbl) $52.64 $47.48 US Natural Gas ($/mcf) $4.21
Slide 10: Oil & Gas Segment - Cash Production Costs and Taxes
First Quarter 2011 Earnings - Oil & Gas Segment - Cash Production Costs and Taxes • Oil and gas cash production costs were $11.30 a barrel for 1Q11, compared with last year's twelve-month costs of $10.19 a barrel. – The increase reflects increased workovers and maintenance activity and higher costs
Slide 11: Chemical Segment Variance Analysis - 1Q11 vs. 1Q10
First Quarter 2011 Earnings - Chemical Segment Variance Analysis - 1Q11 vs. 1Q10 • Core Results for 1Q11 were $219 mm vs. $30 mm in 1Q10, and greater than our earlier guidance. – These results are among the best ever reported for the Chemical segment’s first quarter operations, which is historically
Slide 12: Midstream Segment Variance Analysis - 1Q11 vs. 1Q10
First Quarter 2011 Earnings - Midstream Segment Variance Analysis - 1Q11 vs. 1Q10 • Core Results for 1Q11 of $114 mm vs. $94 mm in 1Q10 – The sequential decrease in Midstream segment earnings from $202 mm in 4Q10 was mainly due to lower marketing and trading income. ($ in millions) 12 12
Slide 13: Capital Spending and Rig Activity
First Quarter 2011 Earnings - Capital Spending and Rig Activity • Capital spending for 1Q11 was $1.3 billion. – Of this, about 88% was in Oil and Gas, 10% in Midstream and the remainder in Chemicals. • We are currently operating 16 rigs in the Permian and 24 rigs in California, compared to 5 and 11
Slide 14: 2011 YTD Cash Flow
First Quarter 2011 Earnings - 2011 YTD Cash Flow – Free cash flow from continuing operations after capex and dividends but before acquisition and debt activity was about $500 million. ($ in millions) Cash Flow From Operations $2,200 Beginning Cash $2,600 12/31/10 Note: See attached GAAP reconciliati
Slide 15: Acquisitions
First Quarter 2011 Earnings - Acquisitions • Our acquisition expenditures in 1Q11 were $3 billion. – The acquisitions included the previously announced South Texas purchase and properties in California and the Permian. – Excluding the South Texas purchase, the new properties did not materially impac
Slide 16: Shares Outstanding and Debt
First Quarter 2011 Earnings - Shares Outstanding and Debt Shares Outstanding (mm) 1Q11 3/31/11 Weighted Average Basic 812.6 Weighted Average Diluted 813.4 Basic Shares Outstanding 812.6 Diluted Shares Outstanding 813.4 3/31/11 12/31/10 Debt/Capital 12% 14% • Our remaining outstanding debt has an ave
Slide 17: Oil and Gas Production & Sales - 2Q11 Outlook
First Quarter 2011 Earnings - Oil and Gas Production & Sales - 2Q11 Outlook • At 1Q11 average oil prices of about $95 WTI, we expect 2Q11 oil and gas production volumes to be as follows: – Domestic volumes are expected to increase to about 425 mboe/d, compared with 1Q11 production of 404 mboe/d; – L
Slide 18: Oil and Gas Production & Sales - 2Q11 Outlook (cont'd)
First Quarter 2011 Earnings - Oil and Gas Production & Sales - 2Q11 Outlook – With regard to 2Q11 production from the Middle East region (cont’d): • In Yemen, almost all of our production comes from concessions operated by others. In addition, the Masila Field contract, which produces, net to us, ab
Slide 19: Capex Increase
First Quarter 2011 Earnings - Capex Increase • We are increasing our total year capital program to $6.8 billion, with about $500 million of the increase related to the Shah Field development program subsequent to the effective date of our participation and the remainder principally in California for
Slide 20: 2Q11 Outlook - Commodity Price Sensitivity
First Quarter 2011 Earnings - 2Q11 Outlook • 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 $34 mm; – The average 1Q11 WTI oil price was $94.10 per barrel; – A $1.00 per ba
Slide 21: 2Q11 Outlook
First Quarter 2011 Earnings - 2Q11 Outlook • The Chemical segment 2Q11 earnings are expected to be comparable to 1Q11. – We expect continuation of 1Q11 trends with sufficient gains from strong exports and seasonal demand improvement offsetting the reduced contributions from the calcium chloride busi
Slide 22: California Update
First Quarter 2011 Earnings - California Update • We are continuing the program as discussed in last quarter’s conference call, which is progressing with satisfactory results. • Permitting is still an issue but we have recently obtained some permits that make us optimistic about increasing our 2H11
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Slide 24: Free Cash Flow Reconciliation to GAAP
Occidental Petroleum Corporation Free Cash Flow Reconciliation to Generally Accepted Accounting Principles (GAAP) ($ Millions) Three Months 2011 Consolidated Statement of Cash Flows Cash flow from operating activities 2,222 Cash flow from investing activities (1,741) Cash flow from financing activit