Occidental Petroleum Corporation · NYSE:OXY
Occidental Petroleum — Q4 2010 Earnings Presentation
23 slides from Occidental Petroleum's earnings presentation, Jan 26, 2011
Slide 1: Occidental Petroleum Corporation Fourth Quarter 2010 Earnings Conference Call
Occidental Petroleum Corporation Fourth Quarter 2010 Earnings Conference Call January 26, 2011
Slide 2: Fourth Quarter 2010 Earnings - Highlights
Fourth Quarter 2010 Earnings - Highlights Fourth Quarter 2010 Earnings - Highlights • Core Results - $1.3 Billion vs. $1.1 Billion in 4Q09 – Core EPS $1.58 (diluted) vs. $1.35 in 4Q09. • Net Income - $1.2 Billion vs. $938 Million in 4Q09 – EPS $1.49 (diluted) vs. $1.15 in 4Q09.
Slide 3: Fourth Quarter 2010 Earnings - Highlights
Fourth Quarter 2010 Earnings - Highlights Fourth Quarter 2010 Earnings - Highlights • Argentina has been classified as a discontinued operation; therefore, its results have been excluded from continuing operations, net of tax, for all periods. • Argentina has not been profitable for the last four ye
Slide 4: Oil & Gas Segment Variance Analysis - 4Q10 vs. 4Q09
($ in millions) • Core Results for 4Q10 of $1.941 B vs. $1.869 B in 4Q09 – Realized crude oil prices increased 11½ percent in 2010 but domestic natural gas prices declined 5½ percent from the fourth quarter of 2009. Fourth Quarter 2010 Earnings - Oil & Gas Segment Variance Analysis - 4Q10 vs. 4Q09
Slide 5: Oil & Gas Segment
Fourth Quarter 2010 Earnings - Oil & Gas Segment 4Q10 4Q09 Oil and Gas Production Volumes (mboe/d) 753 717 – Year-over-year increase of 5%. • 4Q10 production of 753 mboe/d was slightly higher than 3Q10 of 751 mboe/d. • 4Q10 volumes, compared to 3Q10, were negatively impacted by 10 mboe/d from the ef
Slide 6: Oil & Gas Segment
Fourth Quarter 2010 Earnings - Oil & Gas Segment 4Q10 4Q09 Oil and Gas Sales Volumes (mboe/d) 751 722 • Sales volumes differ from production volumes above due mainly to a 4Q10 lifting in Argentina, which slipped from 3Q10, partially offset by Iraq production, which will be sold in 2011 and a lifting
Slide 7: Oil & Gas Segment
4Q10 4Q09 Reported Segment Earnings ($ mm) $1,666 $1,869 WTI Oil Price ($/bbl) $85.17 $76.19 NYMEX Gas Price ($/mcf) $3.85 $4.29 Oxy’s Realized Prices Worldwide Oil ($/bbl) $79.96 $71.74 US Natural Gas ($/mcf) $4.13 $4.37 Fourth Quarter 2010 Earnings - Oil & Gas Segment
Slide 8: Chemical Segment Variance Analysis - 4Q10 vs. 4Q09
($ in millions) *Higher feedstock costs • Core Results for 4Q10 of $111 mm vs. $33 mm in 4Q09 – Chemical segment earnings for 4Q10 were $111 million and in line with our earlier guidance. Fourth Quarter 2010 Earnings - Chemical Segment Variance Analysis - 4Q10 vs. 4Q09
Slide 9: Midstream Segment Variance Analysis - 4Q10 vs. 4Q09
($ in millions) • Core Results for 4Q10 of $202 mm vs. $81 mm in 4Q09 – Midstream segment earnings for 4Q10 increased compared to $163 mm in 3Q10 and $81 mm in 4Q09. The increase in earnings was mainly due to higher trading and marketing income. Fourth Quarter 2010 Earnings - Midstream Segment Varia
Slide 10: Full Year 2010 Results & Capital Spending
Fourth Quarter 2010 Earnings - Full Year 2010 Results & Capital Spending Fourth Quarter 2010 Earnings - Full Year 2010 Results & Capital Spending FY2010 FY2009 • Net Income ($mm) $4,530 $2,915 • EPS (diluted) $5.56 $3.58 • Core Income ($mm) $4,664 $3,192 • EPS (diluted) $5.72 $3.92 • Income for the
Slide 11: Oil & Gas Segment - Cash Production Costs and Taxes
Fourth Quarter 2010 Earnings - Oil & Gas Segment - Cash Production Costs and Taxes Fourth Quarter 2010 Earnings - Oil & Gas Segment - Cash Production Costs and Taxes • Oil and gas cash production costs, which exclude production and property taxes, were $10.19 per boe for 2010, excluding Argentina. –
Slide 12: Full Year 2010 Cash Flow
Operating Cash Flow from Continuing Operations $9,100 (excluding Argentina) Beginning Cash $1,200 12/31/09 ($ in millions) – Free cash flow from continuing operations after capex and dividends but before acquisition activity and debt retirements was about $4.3 billion. Fourth Quarter 2010 Earnings -
Slide 13: Shares Outstanding, Debt and Returns
Fourth Quarter 2010 Earnings - Shares Outstanding, Debt and Returns Shares Outstanding (mm) 2010 12/31/10 Weighted Average Basic 812.5 Weighted Average Diluted 813.8 Basic Shares Outstanding 812.5 Diluted Shares Outstanding 813.9 Debt/Capital 14% ROE 14.7% ROCE 13.2%
Slide 14: Acquisitions & Reserve Replacement
Fourth Quarter 2010 Earnings - Acquisitions & Reserve Replacement Fourth Quarter 2010 Earnings - Acquisitions & Reserve Replacement • Our acquisition costs in 4Q10 were $3.1 billion, which included the previously announced purchases and oil and gas bolt-on properties, mainly in the Permian. – We exp
Slide 15: Oil and Gas Production - 1Q11 Outlook
Fourth Quarter 2010 Earnings - Oil and Gas Production - 1Q11 Outlook • Our 1Q11 production will be impacted by the following factors: – We will no longer report Argentina production; – The timing of the completion of the new acquisitions; • While the acquisition of the oil and gas properties in Nort
Slide 16: Oil and Gas Production - 1Q11 Outlook
Fourth Q\ Oil and Gas Production er 2010 Earnings Q11 look — Production for 1Q11 is expected to grow 4% to 5% ona sequential basis. (assumes $85 WTI) (thousand boe/d) 49 750 -_— =< 14 8 ee 740 4Q10 without Bk Hills Dolphin Partial Impact from 1Q11 Outlook Argentina Maintenance Maintenance recent Acq
Slide 17: Oil and Gas Production - 1Q11 Outlook
Fourth Quarter 2010 Earnings - Oil and Gas Production - 1Q11 Outlook • We expect 1Q11 oil and gas production volumes to be between 740 and 750 mboe/d at 4Q10 average oil prices of $85 WTI. • We expect sales volumes to be around 725 mboe/d. – A $5 increase in WTI would reduce our daily volumes by abo
Slide 18: 1Q11 Outlook
Fourth Quarter 2010 Earnings - 1Q11 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 $41 mm; – The average 4Q10 WTI oil price was $85.17 per barrel; – A swing of $0
Slide 19: 1Q11 Outlook
Fourth Quarter 2010 Earnings - 1Q11 Outlook Fourth Quarter 2010 Earnings - 1Q11 Outlook • The Chemical segment is expected to provide earnings for 1Q11 of about $125 million. – We expect margins and volumes to continue to improve as the economy strengthens. • We expect our combined worldwide tax rat
Slide 20: Capital Spending and DD&A - Full Year 2011 Outlook
Fourth Quarter 2010 Earnings - Capital Spending and DD&A - Full Year 2011 Outlook • We expect capital spending for the total year 2011 to be about $6.1 billion compared to the total 2010 capital of $3.9 billion. – Both amounts exclude Argentina and the Shah Field Development Project. – Occidental's
Slide 21: Capital Spending - 2010 Actual & 2011 Outlook
(excluding Argentina) 2011E Capital - $6.1 Billion Fourth Quarter 2010 Earnings - Capital Spending - 2010 Actual & 2011 Outlook
Slide 22: California Update
Fourth Quarter 2010 Earnings - California Update Fourth Quarter 2010 Earnings - California Update • We have about 520 geologically viable (so-called de-risked) shale drilling locations in California excluding traditional Elk Hills. – Of these locations, about 250 are both outside of Elk Hills proper
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