Slide 1: Fourth Quarter 2012 Earnings Conference Call
EXHIBIT 99.4 Occidental Petroleum Corporation Fourth Quarter 2012 Earnings Conference Call January 31, 2013 1
Slide 2: Fourth Quarter 2012 Earnings - Highlights
Fourth Quarter 2012 Earnings - Highlights • Core Income - $1.5 billion in 4Q12 vs. $1.6 billion in 4Q11 or $1.4 billion in 3Q12. – EPS $1.83 (diluted) vs. $2.02 (diluted) in 4Q11 or $1.70 in 3Q12. – The improvement from 3Q12 reflected the effect of higher liquids production, higher realized NGL and
Slide 3: Fourth Quarter 2012 Earnings - Highlights (cont'd)
Fourth Quarter 2012 Earnings - Highlights • Pre-tax charges of $1.8 billion (cont’d): – While the performance of the properties was generally as expected, natural gas prices have declined by ~50% since the acquisitions. – Natural gas and NGL prices used for reserve calculations in 2012 were signific
Slide 4: Oil & Gas Segment Variance Analysis - 4Q12 vs. 3Q12
Fourth Quarter 2012 Earnings - Oil & Gas Segment Variance Analysis - 4Q12 vs. 3Q12 • Core Results for 4Q12 of $2.3 B vs. $2.0 B in 3Q12 or $2.5 B in 4Q11 – We delivered a quarter-over-quarter improvement, despite the decline in WTI prices, as a result of higher liquids production, higher realized NG
Slide 5: Oil & Gas Segment Production Costs
Fourth Quarter 2012 Earnings - Oil & Gas Segment Production Costs • 4Q12 production costs were $14.95 per barrel, which was $1.04 per barrel lower than 3Q12. – These reductions occurred during the course of the quarter and our year-end exit rate on a per barrel basis was lower than the 4Q11 average
Slide 6: Oil & Gas Segment Production Volumes
Fourth Quarter 2012 Earnings - Oil & Gas Segment Production Volumes 4Q12 4Q11 3Q12 • Oil and Gas Production (mboe/d) 779 748 766 • 4Q12 production of 779 mboe/d increased 4% from 4Q11, and a new company record; • ~6 mboe/d, or almost half of the total sequential increase in quarterly production came
Slide 7: Oil & Gas Segment Production Volumes
Fourth Quarter 2012 Earnings - Oil & Gas Segment Production Volumes • Latin America volumes were 32 mboe/d, which was flat compared to 3Q12 and the same period in 2011. • In the Middle East, volumes were 272 mboe/d, an increase of 7 mboe/d from 3Q12. – Higher spending levels in Iraq and Oman resulte
Slide 8: Oil & Gas Segment
Fourth Quarter 2012 Earnings - Oil & Gas Segment 4Q12 4Q11 Reported Segment Income ($mm) $522 $2,537 WTI Oil Price ($/bbl) $88.18 $94.06 Brent Oil Price ($/bbl) $110.08 $109.07 NYMEX Gas Price ($/mcf) $3.37 $3.68 Oxy’s Realized Prices Worldwide Oil ($/bbl) $96.19 $99.62 -3% year-over-year Worldwide
Slide 9: Oil & Gas Segment Realized Prices
Fourth Quarter 2012 Earnings - Oil & Gas Segment Realized Prices • Realized oil prices for 4Q12 represented 109% of the average WTI price and 87% of the average Brent price. • Realized NGL prices were 51% of the average WTI price and realized domestic gas prices were 92% of the average NYMEX price.
Slide 10: Oil & Gas Segment Taxes, Exploration Expense and DD&A
Fourth Quarter 2012 Earnings - Oil & Gas Segment Taxes, Exploration Expense and DD&A • Taxes other than on income, which are generally related to product prices, were $2.39 per boe for the full year of 2012, compared with $2.21 per boe for the full year of 2011. • 4Q12 exploration expense was $82 mm
Slide 11: Chemical Segment Variance Analysis - 4Q12 vs. 3Q12
Fourth Quarter 2012 Earnings - Chemical Segment Variance Analysis - 4Q12 vs. 3Q12 • Core Results in 4Q12 of $180 mm vs. $162 mm in 3Q12 and $144 mm in 4Q11 – The sequential quarterly improvement reflected higher caustic soda and PVC prices, partially offset by higher energy and feedstock costs. The
Slide 12: Chemical Segment
Fourth Quarter 2012 Earnings - Chemical Segment • Chemical segment 1Q13 earnings are expected to be ~$150 mm. – Typical weak seasonal demand, particularly in the construction and agricultural market segments combined with the recent increases in ethylene and natural gas costs may, however, tighten m
Slide 13: Midstream Segment Variance Analysis - 4Q12 vs. 3Q12
Fourth Quarter 2012 Earnings - Midstream Segment Variance Analysis - 4Q12 vs. 3Q12 • Core Results for 4Q12 were $75 mm vs. $156 mm in 3Q12 and $70 mm in 4Q11 – The 2012 sequential quarterly decrease in earnings was caused by lower marketing and trading, foreign pipeline and power generation earnings
Slide 14: Income Taxes
Fourth Quarter 2012 Earnings - Income Taxes • The worldwide effective tax rate on core income was 37% for the 4Q12. • The rate was lower than the prior quarter and our guidance, largely due to a higher proportion of domestic income in 4Q12 than foreign income. • Our 4Q12 U.S. and foreign tax rates a
Slide 15: 2012 Cash Flow
Fourth Quarter 2012 Earnings - 2012 Cash Flow • In 2012, we generated $12.1 billion of cash flow from continuing operations before changes in working capital. Working capital changes reduced our full year cash flow from operations by ~$800 mm to $11.3 billion. ($ in millions) $15,100 Cash Flow From
Slide 16: 2012 Cash Flow
Fourth Quarter 2012 Earnings - 2012 Cash Flow • Capital expenditures for 2012 were $10.2 billion, of which $2.5 billion was spent in 4Q12. – 4Q12 capital spend was ~$100 million lower than 3Q12 driven by an ~12% reduction in oil and gas spending, partially offset by increases in the chemical and mid
Slide 17: Shares Outstanding, Debt/Capital, ROE & ROCE
Fourth Quarter 2012 Earnings - Shares Outstanding, Debt/Capital, ROE & ROCE • During the year, we bought ~7.5 million of our own shares at a cost of about $580 million. Approximately 5 million of the shares were purchased in 4Q12 at an average price of $76.15. Shares Outstanding (mm) FY2012 12/31/12
Slide 18: Key Performance Metrics - Production
Fourth Quarter 2012 Earnings - Key Performance Metrics - Production • Occidental’s domestic oil and gas segment produced record volumes for the ninth consecutive quarter and continued to execute on our oil production growth strategy. • 4Q12 domestic production of 475 mboe/d, consisting of 342 mboe/d
Slide 19: Key Performance Metrics - Production
Fourth Quarter 2012 Earnings - Key Performance Metrics - Production Total Company Total Domestic Total Domestic Oil +33 mboe/d +36 mboe/d +25 mb/d production production production growth growth growth 19 19
Slide 20: Capital Efficiency & Operating Cost Reduction Program
Fourth Quarter 2012 Earnings - Capital Efficiency & Operating Cost Reduction Program • We have embarked on an aggressive plan to improve our operational efficiencies over all cost categories, including capital - with a view toward achieving an appreciable reduction in our operating expenses and dril
Slide 21: Capital Efficiency & Operating Cost Reduction Program
Fourth Quarter 2012 Earnings - Capital Efficiency & Operating Cost Reduction Program • In 4Q12, total company production costs were $1.04 p/bbl lower than 3Q12. − Improvements were realized across most business units, most notably in the Permian and Elk Hills. − The reductions resulted from efficien
Slide 22: Capital Efficiency & Operating Cost Reduction Program
Fourth Quarter 2012 Earnings - Capital Efficiency & Operating Cost Reduction Program • We are seeing strong early results from our efforts toward improving drilling efficiency and cutting our well costs through the simplification of our well design, focusing our activities on fewer geologic play typ
Slide 23: Dividends
Fourth Quarter 2012 Earnings - Dividends • We have increased our dividends at a compounded annual rate of 15.8% over the last 10 years through 11 dividend increases. • We expect to announce a further dividend increase after the meeting of the Board of Directors in the second week of February. • As a
Slide 24: Oil & Gas Reserves
Fourth Quarter 2012 Earnings - Oil & Gas Reserves • Based on our preliminary estimates of our year-end 2012 reserve levels: • We produced ~280 mmboe in 2012. • Our total company reserve replacement ratio from all categories, including revisions, was about 143%, or ~400 mm boe. − Depressed domestic g
Slide 25: Oil & Gas Reserves
Fourth Quarter 2012 Earnings - Oil & Gas Reserves • Our 2012 development program, excluding acquisitions and revisions, replaced ~175% of our production with ~490 mmboe of reserve additions. • Our 2012 program, including acquisitions but excluding revisions of prior year estimates, replaced 209% of
Slide 26: 2013 Production Outlook
Fourth Quarter 2012 Earnings - 2013 Production Outlook • Domestically, we expect oil production for all of 2013 to grow by about 8% to 10% from the 2012 average. − With lower drilling on gas properties, we expect gas and NGL production to decline somewhat. − Planned plant turnarounds in the Permian
Slide 27: 2013 Capital Outlook
Fourth Quarter 2012 Earnings - 2013 Capital Outlook • We are currently in an investing phase • Capital for future growth projects: in many of our businesses where a higher than normal portion of our − The Al Hosn gas project. capital is spent on longer-term projects. − Construction has begun on the
Slide 28: Capital Spending 2012 Actual & 2013 Estimate
Fourth Quarter Earnings - Capital Spending 2012 Actual & 2013 Estimate • Capital spending is expected to decline by ~6% in 2013 to $9.6 billion from the $10.2 billion we spent in 2012. 28 28
Slide 29: 2013 Capital Outlook
Fourth Quarter 2012 Earnings - 2013 Capital Outlook • Our overall capital spending is expected to decline by ~6% in 2013 to $9.6 billion from the $10.2 billion we spent in 2012. • The reduction in capital will come entirely from the oil and gas business where the 4Q12 spend rate was already close to
Slide 30: 2013 Capital Outlook - Domestic Oil & Gas
Fourth Quarter 2012 Earnings - 2013 Capital Outlook - Domestic Oil & Gas • In domestic oil and gas, 64 development capital will be about 46% of our total capital 55 program. – We expect our average operated rig count in the United States to be about 55 rigs during 2013 compared to 64 rigs in 2012. –
Slide 31: 2013 Capital Outlook - Domestic Oil & Gas
Fourth Quarter 2012 Earnings - 2013 Capital Outlook - Domestic Oil & Gas • Permian capital should remain flat. • We expect to reduce California capital about $500 million from 2012, which represents ongoing well cost reductions and efficiencies, a modest shift toward more conventional drilling oppor
Slide 32: 2013 Capital Outlook - Domestic Oil & Gas
Fourth Quarter 2012 Earnings - 2013 Capital Outlook - Domestic Oil & Gas • In the Midcontinent, we expect to reduce spending about $400 million from 2012. • We have reduced our activity in higher cost unconventional oil plays, specifically in the Williston and in lower return gas properties, mainly
Slide 33: 2013 Capital Outlook - International & Exploration
Fourth Quarter 2012 Earnings - 2013 Capital Outlook - International & Exploration • Our total Al Hosn gas project capital will decline modestly from the 2012 levels, and will make up about 11% of our total capital program for the year. • While Iraq’s spending levels continue to be difficult to predi
Slide 34: 2013 Capital Outlook - Chemical & Midstream
Fourth Quarter 2012 Earnings - 2013 Capital Outlook - Chemical & Midstream • The U.S. Midstream capital will increase by about $400 million due to the BridgeTex pipeline project. • Chemical segment capital will be about $425 million, which includes the construction of a new 182,500 ton per year memb
Slide 35: Summary
Fourth Quarter 2012 Earnings - Summary • Assuming similar realized oil and gas prices to 2012 and our expectation of comparable chemical and midstream segment earnings, we expect that our 2013 program will: − Generate cash flow from operations of about $12.7 billion; and − Invest about $9.6 billion
Slide 36: Conference Call Q&A
Fourth Quarter 2012 Earnings Conference Call Q&A 36