Occidental Petroleum Corporation · NYSE:OXY
Occidental Petroleum — Q4 2008 Earnings Presentation
16 slides from Occidental Petroleum's earnings presentation, Jan 29, 2009
Slide 1: Fourth Quarter 2008 Earnings Conference Call
Fourth Quarter 2008 Earnings Conference Call January 29, 2009
Slide 2: Fourth Quarter 2008 Earnings – Highlights
2 Fourth Quarter 2008 Earnings – Highlights • Core Results - $957 Million vs. $1.5 Billion in 4Q07 – Core EPS $1.18 (diluted) vs. $1.76 in 4Q07. • Net Income - $443 Million vs. $1.5 Billion in 4Q07 – EPS $0.55 (diluted) vs. $1.74 in 4Q07. • Net Income includes after-tax non-core charges as follows:
Slide 3: Oil & Gas Segment Variance Analysis - 4Q08 vs. 4Q07
3 Fourth Quarter 2008 Earnings - Oil & Gas Segment Variance Analysis - 4Q08 vs. 4Q07 • Core Results for 4Q08 of $996 Million ($ in millions) $2,461 $1,415 $61 $34 $77 $996 Sales Price Sales Exploration *All Others 4Q08 4Q07 Volume/Mix Expense *All Others include: DD&A rate increase and higher operat
Slide 4: Oil & Gas Segment
4 Fourth Quarter 2008 Earnings – Oil & Gas Segment 4Q08 4Q07 Reported Segment Earnings ($ mm) $339 $2,461 WTI Oil Price ($/bbl) $58.73 $90.68 NYMEX Gas Price ($/mcf) $6.97 $7.06 Oxy’s Realized Prices Worldwide Oil ($/bbl) $53.52 $80.30 US Natural Gas ($/mcf) $4.67 $6.77
Slide 5: Oil & Gas Segment
5 Fourth Quarter 2008 Earnings – Oil & Gas Segment 4Q08 4Q07 Oil and Gas Sales Volumes (mboe/d) 620 590 • + 5.1% year-over-year • Year-over-year sales volume increase includes: – Dolphin project (+22 mboe/d); – Domestic operations (+14 mboe/d); – Oman (+6 mboe/d); – Libya, due to the new contract te
Slide 6: Chemical Segment Variance Analysis - 4Q08 vs. 4Q07
6 Fourth Quarter 2008 Earnings – Chemical Segment Variance Analysis - 4Q08 vs. 4Q07 • Core Results for 4Q08 of $217 Million – Excludes $90 mm pre-tax loss related to plant closure and impairments; – Improved results attributable primarily to higher caustic soda margins. ($ in millions) $156 $86 $65
Slide 7: Midstream Segment Variance Analysis - 4Q08 vs. 4Q07
7 Fourth Quarter 2008 Earnings – Midstream Segment Variance Analysis - 4Q08 vs. 4Q07 • Core Results for 4Q08 of $170 Million – Improvement due to higher crude oil marketing margins, higher Dolphin pipeline income, partly offset by lower NGL/gas processing margins. ($ in millions) $21 $43 $65 $11 $17
Slide 8: Full Year 2008 Results
8 Fourth Quarter 2008 Earnings – Full Year 2008 Results • Core Results FY2008 - $7.3 Billion vs. $4.4 Billion in FY2007 – Core EPS $8.95 (diluted) vs. $5.25 in FY2007 • Net Income FY2008 - $6.9 Billion vs. $5.4 Billion in FY2007 – EPS $8.35 (diluted) vs. $6.44 in FY2007 • 2008 Net Income includes af
Slide 9: 2008 Oil & Gas Reserves
9 Fourth Quarter 2008 Earnings – 2008 Oil & Gas Reserves • We currently estimate that we replaced approximately 200% of our oil and gas production in 2008. – This excludes the effect of price changes from 2007 to 2008. • Including the effect of price changes, we estimate that we replaced around 150%
Slide 10: Capital Spending
10 Fourth Quarter 2008 Earnings – Capital Spending • Last year’s capital program was about $4.7 billion, and we spent another $4.7 billion for acquisitions. – As a result, we have accumulated a sizeable inventory of projects which can be delayed until the industry cost structure is in line with prod
Slide 11: Capital Spending
11 Fourth Quarter 2008 Earnings – Capital Spending • Gas drilling with less than $5 per mcf gas is unattractive. • We will continue to fully fund much of our Middle East operations, successful exploration programs in California, Utah, and exploration in Argentina. • Formerly "quick payout" wells in
Slide 12: Capital Spending
12 Fourth Quarter 2008 Earnings – Capital Spending • We are also focusing on internal costs. – Some reductions in overhead will be made this year which should improve our overhead levels by at least $1/boe. • We are renegotiating our supplier contracts to further reduce costs and are laying down rig
Slide 13: Full Year 2008 Cash Flow
13 Fourth Quarter 2008 Earnings – Full Year 2008 Cash Flow $12,700 $4,700 ($ in millions) Cash Flow From Operations $4,700 $10,700 $950 $940 $1,500 $10 $1,800 Beginning Cash $2,000 Available Capex Acquisitions Debt Dividends Share Other Ending Cash Cash Repurchase Balance 12/31/08
Slide 14: Shares Outstanding, Debt and Returns
14 Fourth Quarter 2008 Earnings – Shares Outstanding, Debt and Returns Shares Outstanding (mm) 2008 12/31/08 Weighted Average Basic 817.6 Weighted Average Diluted 820.8 Basic Shares Outstanding 810.4 Diluted Shares Outstanding 813.5 2008 2007 Debt/Capital 9% 7% ROE 27% 26% ROCE* 25% 24% *See *See th
Slide 15: Outlook
15 Fourth Quarter 2008 Earnings - Outlook • We expect 1Q09 exploration expense to be about $60 mm. • We expect 1Q09 Chemical earnings to be $100 mm. – High caustic soda margins are expected to continue through the period, offset by continued weakness in the construction and housing markets impacting
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