Occidental Petroleum Corporation · NYSE:OXY
Occidental Petroleum — Q2 2012 Earnings Presentation
30 slides from Occidental Petroleum's earnings presentation, Jul 26, 2012
Slide 1: Occidental Petroleum Corporation Second Quarter 2012 Earnings Conference Call
EXHIBIT 99.4 Occidental Petroleum Corporation Second Quarter 2012 Earnings Conference Call July 26, 2012 1
Slide 2: Second Quarter 2012 Earnings - Highlights
Second Quarter 2012 Earnings - Highlights • Net Income - $1.3 Billion in 2Q12 vs. $1.8 Billion in 2Q11 and $1.6 Billion in 1Q12. – EPS $1.64 (diluted) vs. $2.23 (diluted) in 2Q11 and $1.92 (diluted) in 1Q12. • All of the drop in 2Q12 earnings compared to 1Q12 was attributable to the decline in commo
Slide 3: Oil & Gas Segment Variance Analysis - 2Q12 vs. 1Q12
Second Quarter 2012 Earnings - Oil & Gas Segment Variance Analysis - 2Q12 vs. 1Q12 • Core Results for 2Q12 of $2.0 B vs. $2.5 B in 1Q12 – All of the drop in 2Q12 earnings compared to 1Q12 was attributable to the decline in commodity prices. Worldwide oil and domestic gas and NGL prices were signific
Slide 4: Oil & Gas Segment Variance Analysis - 2Q12 vs. 2Q11
Second Quarter 2012 Earnings - Oil & Gas Segment Variance Analysis - 2Q12 vs. 2Q11 • Core Results for 2Q12 of $2.0 B vs. $2.6 B in 2Q11 ($ in millions) 4
Slide 5: Oil & Gas Production
Second Quarter 2012 Earnings - Oil & Gas Production 2Q12 2Q11 Oil and Gas Production Volumes (mboe/d) 766 715 – The highest volume in the Company's history for the second consecutive quarter, +7% year-over-year. • Our total domestic production was 462 mboe/d, the seventh consecutive domestic quarter
Slide 6: Oil & Gas Production
Second Quarter 2012 Earnings - Oil & Gas Production • In the Middle East region, volumes were 271 mboe/d: – In Oman, 2Q12 production was 72 mboe/d, 2 mboe/d lower than 1Q12 volumes. – In Qatar, 2Q12 production was 74 mb/d, 2 mb/d higher than 1Q12 volumes. – For Dolphin and Bahrain combined, daily pr
Slide 7: Oil & Gas Segment - Realized Prices
Second Quarter 2012 Earnings - Oil & Gas Segment - Realized Prices • 2Q12 realized prices were lower for our products compared to 1Q12. – Our worldwide crude oil realized price was $99.34 per barrel, a decrease of about 8%; – worldwide NGLs were $42.06 per barrel, a decrease of about 20%, and; – dom
Slide 8: Oil & Gas Segment - Realized Prices
Second Quarter 2012 Earnings - Oil & Gas Segment - Realized Prices • Realized oil prices for the quarter represented 106% of the average WTI and 91% of the average Brent price. • Realized NGL prices were 45% of WTI and realized domestic gas prices were 92% of the average NYMEX price. • Price changes
Slide 9: Oil & Gas Segment
Second Quarter 2012 Earnings - Oil & Gas Segment 2Q12 2Q11 Reported Segment Earnings ($mm) $2,043 $2,624 WTI Oil Price ($/bbl) $93.49 $102.56 Brent Oil Price ($/bbl) $108.90 $117.36 NYMEX Gas Price ($/mcf) $2.28 $4.23 Oxy’s Realized Prices Worldwide Oil ($/bbl) $99.34 $103.12 - 4% year-over-year Wor
Slide 10: Oil & Gas Segment - Production Costs and Taxes
Second Quarter 2012 Earnings - Oil & Gas Segment - Production Costs and Taxes • Oil and gas cash production costs were $14.50 a boe for the first six months of 2012, compared with last year's twelve-month costs of $12.84 a boe. – The cost increase reflects higher well maintenance activity, in part r
Slide 11: Chemical Segment Variance Analysis - 2Q12 vs. 1Q12
Second Quarter 2012 Earnings - Chemical Segment Variance Analysis - 2Q12 vs. 1Q12 • Core Results for 2Q12 were $194 mm vs. $184 mm in 1Q12. – The sequential quarterly improvement was due to improved polyvinyl chloride (PVC) and vinyl chloride monomer (VCM) margins driven primarily by lower ethylene
Slide 12: Chemical Segment Variance Analysis - 2Q12 vs. 2Q11
Second Quarter 2012 Earnings - Chemical Segment Variance Analysis - 2Q12 vs. 2Q11 • Core Results for 2Q12 were $194 mm vs. $253 mm in 2Q11. – The year-over-year decrease was the result of lower domestic and export caustic volumes, lower VCM export demand, and lower PVC and VCM export prices, partial
Slide 13: Midstream Segment Variance Analysis - 2Q12 vs. 1Q12
Second Quarter 2012 Earnings - Midstream Segment Variance Analysis - 2Q12 vs. 1Q12 • Core Results for 2Q12 were $77 mm vs. $131 mm in 1Q12. – The decline in earnings was mostly in the marketing and trading businesses and to a lesser degree in the gas plants, reflecting lower NGL prices, partially of
Slide 14: Midstream Segment Variance Analysis - 2Q12 vs. 2Q11
Second Quarter 2012 Earnings - Midstream Segment Variance Analysis - 2Q12 vs. 2Q11 • Core Results for 2Q12 were $77 mm vs. $187 mm in 2Q11. ($ in millions) 14
Slide 15: Taxes
Second Quarter 2012 Earnings - Taxes • The worldwide effective tax rate was 40% for 2Q12. • Our 2Q12 U.S. and foreign tax rates are included in the “Investor Relations Supplemental Schedules.” 15 15
Slide 16: 2012 YTD Cash Flow
Second Quarter 2012 Earnings - 2012 YTD Cash Flow – Cash flow from operations for the first six months of 2012 was $6 billion. We used $5.1 billion of the company’s total cash flow to fund capital expenditures and $1 billion for acquisitions. Financial activities, which included dividends paid, stoc
Slide 17: Capital Expenditures & Acquisitions
Second Quarter 2012 Earnings - Capital Expenditures & Acquisitions • Capital expenditures for the first six months of 2012 were $5.1 billion, of which $2.7 billion was spent in 2Q12. • Year-to-date capital expenditures by segment were 82% in oil and gas, 15% in midstream and the remainder in chemica
Slide 18: Shares Outstanding & Debt/Capital
Second Quarter 2012 Earnings - Shares Outstanding & Debt/Capital Shares Outstanding (mm) 2H12 6/30/12 Weighted Average Basic 810.4 Weighted Average Diluted 811.2 Basic Shares Outstanding 809.4 Diluted Shares Outstanding 810.0 6/30/12 12/31/11 Debt/Capital 16% 13% • At the end of 2Q12, we issued $1.7
Slide 19: Key Performance Metrics
Second Quarter 2012 Earnings - Key Performance Metrics • Occidental’s 2Q12 production set an all-time record for the Company for the second consecutive quarter and the domestic oil and gas segment produced record volumes for the seventh consecutive quarter. • 2Q12 domestic production of 462 mboe/d,
Slide 20: Capital Program
Second Quarter 2012 Earnings - Capital Program • We are raising our estimate of the total year capital program to $9.2 billion, from our previously announced level of $8.3 billion. • Of the increase, about $600 million is for the Al Hosn Shah gas project, with the remainder of the increase going to
Slide 21: 2012 Updated Capital Expenditure Program
Second Quarter 2012 Earnings - 2012 Updated Capital Expenditure Program ($ in millions) 21 21
Slide 22: 2012 vs. 2011 Capital Program
Second Quarter 2012 Earnings - 2012 vs. 2011 Capital Program ($ in millions) (a) Excludes the $500 million development costs, incurred by the project prior to the effective date of our participation, which was paid at the date of the signing of the Al Hosn Shah Field Development Project. 22 22
Slide 23: Capital Program - Al Hosn
Second Quarter 2012 Earnings - Capital Program - Al Hosn 23
Slide 24: Capital Program - Domestic Operations
Second Quarter 2012 Earnings - Capital Program - Domestic Operations 24
Slide 25: Capital Program - Domestic Operations
Second Quarter 2012 Earnings - Capital Program - Domestic Operations 25 25
Slide 26: Oil and Gas - 2H12 Outlook
Second Quarter 2012 Earnings - Oil and Gas - 2H12 Outlook • As we look ahead to production expectations in 2H12: – Over the past year, we have generally achieved our 6 to 8 mboe/d quarter-over-quarter domestic production increase. – We expect that we will achieve the high end of this range of increa
Slide 27: Oil and Gas - 2H12 Outlook
Second Quarter 2012 Earnings - Oil and Gas - 2H12 Outlook • A $5.00 change in global oil prices would impact our daily volumes by about 3 mboe/d. The financial impact of this volume change is incorporated into the product price sensitivities we have provided. • We expect exploration expense to be ab
Slide 28: 3Q12 Outlook - Chemicals & Taxes
Second Quarter 2012 Earnings - 3Q12 Outlook - Chemicals & Taxes • The chemical segment 3Q12 earnings are estimated to be about $175 million. – Weakness in export demand, conditions in Europe and China, slowdown in U.S. demand and rising US natural gas costs will keep pressure on margins. • We expect
Slide 29: Summary
Second Quarter 2012 Earnings - Summary • To summarize: We closed the quarter with a second consecutive all-time record total Company production and the seventh consecutive record domestic oil and gas production. – We increased our total domestic production by 7 mboe/d over 1Q12 and by 38 mboe/d from
Slide 30: Q&A
Second Quarter 2012 Earnings - Q&A 30 30