Occidental Petroleum Corporation · NYSE:OXY
Occidental Petroleum — Q2 2011 Earnings Presentation
21 slides from Occidental Petroleum's earnings presentation, Jul 26, 2011
Slide 1: Occidental Petroleum Corporation Second Quarter 2011 Earnings Conference Call
Occidental Petroleum Corporation Second Quarter 2011 Earnings Conference Call July 26, 2011
Slide 2: Second Quarter 2011 Earnings - Highlights
Second Quarter 2011 Earnings - Highlights Second Quarter 2011 Earnings - Highlights • Core Results - $1.8 Billion vs. $1.1 Billion in 2Q10 – Core EPS $2.23 (diluted) vs. $1.32 in 2Q10. • Net Income - $1.8 Billion vs. $1.1 Billion in 2Q10 – EPS $2.23 (diluted) vs. $1.31 in 2Q10.
Slide 3: Oil & Gas Segment Variance Analysis - 2Q11 vs. 2Q10
($ in millions) • Core Results for 2Q11 of $2.6 Billion vs. $1.9 Billion in 2Q10 – The improvement in 2011 was driven mainly by higher commodity prices. Sales volumes for 2Q11 and 2Q10 were flat at 705 mboe p/d. Production volumes were 715 mboe p/d in 2Q11, compared to 701 mboe p/d in 2Q10. Second Q
Slide 4: Oil & Gas Segment
2Q11 2Q10 Reported Segment Earnings ($mm) $2,624 $1,867 WTI Oil Price ($/bbl) $102.56 $78.03 NYMEX Gas Price ($/mcf) $4.23 $4.18 Oxy’s Realized Prices Worldwide Oil ($/bbl) $103.12 $74.39 + 39% year-over-year Worldwide NGLs ($/bbl) $57.67 $44.08 + 31% year-over-year US Natural Gas ($/mcf) $4.27 $4.1
Slide 5: Oil & Gas Production
Second Quarter 2011 Earnings - Oil & Gas Production Second Quarter 2011 Earnings - Oil & Gas Production • Production guidance assumptions we gave in the 1Q11 conference call assumed a $95 WTI average oil price. • Actual average 2Q11 oil price of $102.56 reduced our production volumes by about 5 mboe
Slide 6: Oil & Gas Sales
Second Quarter 2011 Earnings - Oil & Gas Sales • Our 2Q11 sales volume guidance, which assumed a $95 WTI oil price, was 725 mboe p/d, which translates to about 720 mboe p/d at the higher actual prices for the quarter. • Our actual volumes were 705 mboe p/d. • The lower volumes resulted mainly from t
Slide 7: Oil & Gas Segment - Cash Production Costs and Taxes
Second Quarter 2011 Earnings - Oil & Gas Segment - Cash Production Costs and Taxes Second Quarter 2011 Earnings - Oil & Gas Segment - Cash Production Costs and Taxes • Oil and gas cash production costs were $11.88 a barrel for the first six months of 2011, compared with last year's twelve-month cost
Slide 8: Chemical Segment Variance Analysis - 2Q11 vs. 1Q11
($ in millions) *Higher feedstock costs • Core Results for 2Q11 were $253 mm vs. $219 mm in 1Q11. – The second quarter results, one of the highest ever reported for the Chemical segment, reflect higher margins and volumes across most product lines. Second Quarter 2011 Earnings - Chemical Segment Var
Slide 9: Midstream Segment Variance Analysis - 2Q11 vs. 1Q11
($ in millions) • Core Results for 2Q11 were $187 mm vs. $114 mm in 1Q11, and $13 mm in 2Q10. – The increase from 1Q11 earnings was mainly due to higher marketing income and improved margins in the gas processing business. Second Quarter 2011 Earnings - Midstream Segment Variance Analysis - 2Q11 vs.
Slide 10: Taxes
Second Quarter 2011 Earnings - Taxes • The worldwide effective tax rate was 38% for 2Q11. – Our higher proportionate domestic income brought us closer to the US statutory rates. • Our 2Q11 US and foreign tax rates are included in the “Investor Relations Supplemental Schedules.”
Slide 11: Six Months Results & Capital Spending
Second Quarter 2011 Earnings - Six Months Results & Capital Spending Second Quarter 2011 Earnings - Six Months Results & Capital Spending YTD2011 YTD2010 • Core Income ($mm) $3,412 $2,174 • Core EPS (diluted) $4.19 $2.67 • Net Income ($mm) $3,366 $2,127 • EPS (diluted) $4.13 $2.61 • Cash flow from o
Slide 12: Cash Flow
Cash Flow From Operations $5,600 Beginning Cash $2,600 12/31/10 ($ in millions) Shah - $500 Note: See attached GAAP reconciliation. – Free cash flow from continuing operations after capex and dividends but before acquisition and debt activity was about $1.8 billion. Second Quarter 2011 Earnings - 20
Slide 13: Net Acquisition Expenditures
Second Quarter 2011 Earnings - Net Acquisition Expenditures Second Quarter 2011 Earnings - Net Acquisition Expenditures • Our net acquisition expenditures in 1H11 were $1.2 billion, which are net of proceeds from the sale of our Argentina operations. • The acquisitions included the South Texas purch
Slide 14: Shares Outstanding, Debt and ROE
Second Quarter 2011 Earnings - Shares Outstanding, Debt and ROE Shares Outstanding (mm) YTD11 6/30/11 Weighted Average Basic 812.5 Weighted Average Diluted 813.3 Basic Shares Outstanding 812.5 Diluted Shares Outstanding 813.3 6/30/11 12/31/10 Debt/Capital 11% 14% • Our annualized ROE for 1H11 was 20
Slide 15: Oil and Gas Production & Sales - 2H11 Outlook
Second Quarter 2011 Earnings - Oil and Gas Production & Sales - 2H11 Outlook • At average oil prices of about $95 WTI, we expect the back half of the year oil and gas production to be as follows: – Domestic volumes are expected to increase by about 3 - 4 mboe/d each month compared to the previous mo
Slide 16: Oil and Gas Production & Sales - 2H11 Outlook
Second Quarter 2011 Earnings - Oil and Gas Production & Sales - 2H11 Outlook – The Middle East region production is expected as follows (cont’d): • In Qatar, we expect to gradually regain the production rate lost due to planned maintenance and mechanical issues resulting in about 3 mboe p/d growth r
Slide 17: 2H11 Outlook
Second Quarter 2011 Earnings - 2H11 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 $37 mm; – The average 2Q11 WTI oil price was $102.56 per barrel; – A $1.00 per
Slide 18: 2H11 Outlook
Second Quarter 2011 Earnings - 2H11 Outlook Second Quarter 2011 Earnings - 2H11 Outlook • The Chemical segment 3Q11 earnings are expected to moderate to about $225 mm, mostly due to seasonal factors. – 3Q11 Chemical segment results are expected to reflect continued strong export demand and overall g
Slide 19: Activity
Second Quarter 2011 Earnings - Activity Second Quarter 2011 Earnings - Activity • In California, we expect our current drilling program should result in more predictable production growth going forward. – The status of permitting is generally unchanged from the prior quarter. – We have obtained enou
Slide 20: US Operated Rig Count
Second Quarter 2011 Earnings - US Operated Rig Count Second Quarter 2011 Earnings - US Operated Rig Count
Slide 21: Slide 21