Occidental Petroleum Corporation · NYSE:OXY
Occidental Petroleum — Vintage Petroleum — Merger or Acquisition (October 2005)
20 slides from Occidental Petroleum's merger presentation, Oct 14, 2005
Slide 1: Acquisition of Vintage Petroleum, Inc.
Occidental Petroleum Corporation October 14, 2005 Acquisition of Vintage Petroleum, Inc. 1
Slide 2: Why Vintage?
Why Vintage? Strategic fit Growth opportunities Free cash flow generation Asset rationalization Cost savings 2
Slide 3: Transaction Summary
Transaction Summary Consideration 0.42 Oxy shares per Vintage share (~28.7 Mm Oxy shares) $20.00 cash per Vintage share (~$1,366 Mm) Strategic Overlap Financially Accretive Annual Synergies - $40-60 Mm cost savings and exploration capital savings of ~$100 Mm Growth Opportunities Argentina and Califo
Slide 4: Transaction Summary Consideration
Transaction Summary Consideration $Mm 0.42 x 68.3 Mm shares x $74.98/share $2,151 $20/share x 68.3 Mm shares 1,366 Debt assumed 550 Cash at closing (225) Total consideration $3,842 Proved Reserves – 437 Mmboe (12/31/04) Probable and Possible Reserves – 421 Mmboe (12/31/04) 2nd Qtr 2005 Production of
Slide 5: VPI Pro- OxY
VPI Pro- OxY Forma VPI fc?) Cost Savings _ Exploration Capital Savings @ Hedging @ Free Cash Flow
Slide 6: Strategic Overlap Argentina
Strategic Overlap Argentina Significantly enhances Latin America core area 22 concessions, mostly in the San Jorge Basin As of 12/31/04, ~217 Mmboe of proved reserves, ~500 drilling locations (97% historical drilling success rate) Strong current production and expected 10-15% production growth over
Slide 7: Argentina – Historical and Forecast Production Growth
Strategic Overlap Argentina – Historical and Forecast Production Growth 7
Slide 8: Vintage Growth Opportunities
Vintage Growth Opportunities 8
Slide 9: Strategic Overlap California
Strategic Overlap California Good strategic fit with existing Oxy operations ~70 Mmboe of proved reserves as of 12/31/04 Oxy sees significant opportunity to increase recovery on existing properties (~20% over the next few years) ~11,000+ Boepd of production Key fields are high quality crude oil Bake
Slide 10: Strategic Overlap Yemen
Strategic Overlap Yemen S-1 block is adjacent to Occidental blocks ~6 Mmboe of proved reserves as of 12/31/04 Capacity for 6,000+ Bopd of net production Gulf of Aden Red Sea Bir Ali Sana’a Salif Aden Masila Ash Shihr East Shabwa Yemen OXY EXPLORATION OXY PRODUCTION OIL FIELD VINTAGE BLOCK PIPELINE 1
Slide 11: Vintage – Other Properties
Vintage – Other Properties Bolivia – Intriguing potential, needs long term market development Candidates for portfolio rationalization East Texas, Gulf Coast, Mid-Continent Unconventional North American gas ~71 Mmboe of proved reserves as of 12/31/04 ~19,000 Boepd of production Divestitures expected
Slide 12: Transaction Value
Transaction Value Note: This slide is taken from VPI’s analyst presentation at the UBS conference in Las Vegas in May 2005. $4,642 $3,849 Total $64.10 $52.91 Net Asset Value Per Share 67.7 67.7 Fully Diluted Shares $4,339 $3,582 Net Asset Value (378) (342) Other balance sheet items 45 45 Gathering/M
Slide 13: Contribution Analysis
Contribution Analysis VPI OXY % of Enterprise Value 9% 91% % of Market Value 5% 95% LTM EBITDA 7% 93% LTM Cash from Operations 6% 94% Production (per Day) Oil 11% 89% Gas 16% 84% Boe 12% 88% Proved Reserves (Mmboe) 15% 85% PDP Reserves (Mmboe) 13% 87% Note: VPI numbers have been adjusted to take out
Slide 14: Occidental Pro-Forma Financials
Occidental Pro-Forma Financials 2005 14.51 14.86 Cash Flow Per Share $9.76 $9.79 Earnings per Share Occidental Stand-alone Pro-Forma Pro-forma: Consensus First Call Oxy 2005 estimate, including 9 Mm share buyback 14
Slide 15: Pro-Forma Reserves by Country
Pro-Forma Reserves by Country Million BOE 1,982 348 58 63 49 47 24 US Qatar Yemen Russia Pakistan Oman Colombia 104 Ecuador Proved reserves as of 12/31/04 217 Argentina Bolivia 77 OXY Vintage Reserve Life of 12.7; Total proved reserves of 2,969 Mmboe 15
Slide 16: Worldwide Production
Worldwide Production Note: Occidental + Vintage - No effects of rationalization Occidental Pro-Forma 16
Slide 17: Focused Value Creation Strategy
Focused Value Creation Strategy Maintain Strong Balance Sheet Disciplined Capital Expenditure Program Selective Acquisitions Moderate Predictable Reserve/Production Growth Review Dividend Policy Annually 17
Slide 18: Additional Information and Where to Find It
Occidental Petroleum Corporation Additional Information and Where to Find It Oxy will file a Form S-4, Vintage will file a proxy statement and both companies will file other relevant documents concerning the proposed merger transaction with the Securities and Exchange Commission (SEC). INVESTORS ARE
Slide 19: Forward-Looking Statements
Occidental Petroleum Corporation Forward-Looking Statements The matters set forth in this presentation, including statements as to the expected benefits of the acquisition such as efficiencies, cost savings, financial strength, and the competitive ability and position of the combined company, and ot
Slide 20: 20
20
Vintage Petroleum — Merger or Acquisition (October 2005) on 6ix