Occidental Petroleum Corporation · NYSE:OXY
Occidental Petroleum — Q1 2008 Earnings Presentation
15 slides from Occidental Petroleum's earnings presentation, Apr 24, 2008
Slide 1: First Quarter 2008 Earnings Conference Call
First Quarter 2008 Earnings Conference Call April 24, 2008
Slide 2: First Quarter 2008 Earnings – Highlights
Net Income - $1.846 B vs. $1.212 B in 1Q-07 Reported EPS $2.23 (diluted) vs. $1.43 in 1Q-07 +56% year-over-year Core Results - $1.819 B vs. $788 mm in 1Q-07 Core EPS $2.20 (diluted) vs. $0.93 in 1Q-07 +137% year-over-year Record first quarter net income driven by: 8.4% year-over-year increase in oil
Slide 3: First Quarter 2008 Earnings – Summary
($ in millions, except EPS data) 1Q2008 1Q2007 Net Income $1,846 $1,212 Reported EPS (diluted) $2.23 $1.43 Core Results $1,819 $788 Core EPS (diluted) $2.20 $0.93 +137% year-over-year Oil and Gas production (mboe/day) 607 560 +8.4% year-over-year Capital Spending $868 $780 Cash Flow from Operations
Slide 4: Oil & Gas Segment Variance Analysis – 1Q08 vs. 1Q07
Core Results for 1Q08 of $2.888 Billion + 112% year-over-year ($ in millions) 1Q 07 Sales Price Sales Volume/Mix Exploration Expense *All Others 1Q 08 $1,362 $2,888 $1,574 $100 $28 $176 *All Others include: DD&A increase ($31 mm), and higher operating expenses First Quarter 2008 Earnings - Oil & Gas
Slide 5: Oil & Gas Segment
1Q08 1Q07 Reported Segment Earnings ($ mm) $2,888 $1,883 WTI Oil Price ($/bbl) $97.90 $58.16 NYMEX Gas Price ($/mcf) $7.94 $7.17 Oxy’s Realized Prices Worldwide Oil ($/bbl) $86.75 $51.67 US Natural Gas ($/mcf) $8.15 $6.38 First Quarter 2008 Earnings – Oil & Gas Segment
Slide 6: Oil & Gas Segment
1Q08 1Q07 Oil and Gas Production (mboe/day) 607 560 + 8.4% year-over-year Improvement was largely due to the Dolphin Project, partially offset by lower PSC volumes due to higher prices. Actual production was in the middle of our earlier guidance of 600 to 615 mboe/day, and based on $90 WTI. Dolphin
Slide 7: Chemical Segment Variance Analysis – 1Q08 vs. 1Q07
Core Results for 1Q08 of $179 Million +31% year-over-year, and higher than guidance of $100 to $125 mm; Improvement due to higher prices and margins in caustic soda, and higher PVC and VCM volumes exported to non-US$ denominated economies. ($ in millions) 1Q 07 Sales Price Sales Volume/Mix *Operatio
Slide 8: Midstream assets reclassified out of the Oil and Gas segment
Midstream assets reclassified out of the Oil and Gas segment The assets are comprised of the following businesses: • Marketing – Oxy’s marketing group markets our equity production and manages third party transactions. The primary drivers of these earnings are marketing and trading margins in oil an
Slide 9: Midstream, Marketing and Other
($ in millions) Midstream Data ($ mm) 1Q08 1Q07 Core Results $123 $119 2007 Net Book Value (at year end) $1,800 Capex & Acquisition costs $430 Similar amount expected in 2008 Funds will be spent enhancing our CO 2 production and expanding our pipeline capacity. First Quarter 2008 Earnings – Midstrea
Slide 10: Cash Flow
$4,700 $870 $435 $210 $1,500 Available Cash Acquisitions Capex Share Repurchase Dividends Ending Cash Balance 3/31/08 ($ in millions) $1,600 $85 Other First Quarter 2008 Earnings – Cash Flow Cash Flow From Operations $2,700 Beginning Cash $2,000
Slide 11: First Quarter 2008 Earnings – Share Repurchase
Spent $435 million to repurchase 6.3 million shares in 1Q08 at an average price of $69.68 per share. 20.2 million shares remained under the current 75 million share repurchase authorization. Shares Outstanding (mm) 1Q08 3/31/08 Weighted Average Basic 823.6 Weighted Average Diluted 828.2 Basic Shares
Slide 12: First Quarter 2008 Earnings – 2Q08 Outlook
We expect 2Q08 oil and gas production in the range of 610 to 620 mboe/day, at $100 oil prices. Production increases expected in Argentina, Colombia, Rocky Mountains, Permian and Oman; Partially offset by decreases due to high cost recovery levels in 1Q08. We currently expect total capital spending f
Slide 13: Commodity Price Sensitivity – Earnings
Commodity Price Sensitivity — Earnings A $1.00 per barrel change in oil prices impacts oil and gas quarterly earnings before income taxes by about $39 mm; Includes the impact of Dolphin; Includes production sharing contract price impact of approximately 500 barrels per day. A change of $0.50 per mil
Slide 14: 2Q08 Chemical earnings outlook
We expect 2Q08 Chemical earnings to be in the range of $120 to $140 mm, compared to $179 mm in 1Q08. Higher feedstock costs are the primary driver of the reduced forecast. Outlook is also below 2Q07 earnings of $158 mm due to weakness in domestic construction which impacts industry demand. Cash tax
Slide 15: Non-GAAP reconciliation and forward-looking statements
See the investor relations supplemental schedules for the reconciliation of non- GAAP items. 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 materially af