Occidental Petroleum Corporation · NYSE:OXY
Occidental Petroleum — Q3 2010 Earnings Presentation
21 slides from Occidental Petroleum's earnings presentation, Oct 19, 2010
Slide 1: Occidental Petroleum Corporation Third Quarter 2010 Earnings Conference Call
EXHIBIT 99.4 Occidental Petroleum Corporation Third Quarter 2010 Earnings Conference Call October 19, 2010 1
Slide 2: Third Quarter 2010 Earnings - Highlights
Third Quarter 2010 Earnings - Highlights • Core Results - $1.2 Billion vs. $929 Million in 3Q09 – Core EPS $1.47 (diluted) vs. $1.14 in 3Q09. • Net Income - $1.2 Billion vs. $927 Million in 3Q09 – EPS $1.46 (diluted) vs. $1.14 in 3Q09. 2 2
Slide 3: Oil & Gas Segment Variance Analysis - 3Q10 vs. 3Q09
Third Quarter 2010 Earnings - Oil & Gas Segment Variance Analysis - 3Q10 vs. 3Q09 • Core Results for 3Q10 of $1.745 B vs. $1.464 B in 3Q09 – Improvement in 2010 driven mostly by higher commodity prices with additional contributions from higher volumes. Partially offsetting these gains were higher DD
Slide 4: Oil & Gas Segment
Third Quarter 2010 Earnings - Oil & Gas Segment 3Q10 3Q09 Reported Segment Earnings ($ mm) $1,745 $1,464 WTI Oil Price ($/bbl) $76.20 $68.30 NYMEX Gas Price ($/mcf) $4.53 $3.60 Oxy’s Realized Prices Worldwide Oil ($/bbl) $70.71 $62.79 US Natural Gas ($/mcf) $4.20 $3.04 4 4
Slide 5: Oil & Gas Segment
Third Quarter 2010 Earnings - Oil & Gas Segment 3Q10 3Q09 Oil and Gas Production Volumes (mboe/d) 751 705 Oil and Gas Sales Volumes (mboe/d) 749 702 – Year-over-year increases of over 6.5%. • Most of the year-over-year production increases came from the Middle East / North Africa region, with smalle
Slide 6: Oil & Gas Segment - Cash Production Costs and Taxes
Third Quarter 2010 Earnings - Oil & Gas Segment - Cash Production Costs and Taxes • Oil and gas cash production costs, excluding production and property taxes, were $10.25 per boe for YTD 2010. – Full-year 2009 costs were $9.37 a boe. – The nine-month increase reflects $0.35 a barrel higher CO2 cost
Slide 7: Chemical Segment Variance Analysis - 3Q10 vs. 2Q10
Third Quarter 2010 Earnings - Chemical Segment Variance Analysis - 3Q10 vs. 2Q10 • Core Results for 3Q10 of $189 mm vs. $108 mm in 2Q10 – Results reflect improvement from 2Q10 in both volumes and margins across most product lines. Export markets have improved more rapidly than domestic markets due i
Slide 8: Midstream Segment Variance Analysis - 3Q10 vs. 3Q09
Third Quarter 2010 Earnings - Midstream Segment Variance Analysis - 3Q10 vs. 3Q09 • Core Results for 3Q10 of $163 mm vs. $77 mm in 3Q09 – The increase in earnings was mainly due to trading and marketing income and higher margins in the pipeline businesses. ($ in millions) 8 8
Slide 9: Nine Months Results & Capital Spending
Third Quarter 2010 Earnings - Nine Months Results & Capital Spending YTD2010 YTD2009 • Net Income ($ mm) $3,318 $1,977 • EPS (diluted) $4.07 $2.43 • Core Income ($ mm) $3,336 $2,025 • EPS (diluted) $4.09 $2.48 • Capital spending for 3Q10 was about $1.1 billion and $2.8 billion for YTD 2010. – Year t
Slide 10: Shares Outstanding and Debt
Third Quarter 2010 Earnings - Shares Outstanding and Debt Shares Outstanding (mm) YTD10 9/30/10 Weighted Average Basic 812.4 Weighted Average Diluted 813.8 Basic Shares Outstanding 812.6 Diluted Shares Outstanding 814.0 9/30/10 12/31/09 Debt/Capital 7% 9% 10 10
Slide 11: Cash Flow 2010 YTD
Third Quarter 2010 Earnings - Cash Flow 2010 YTD – 2010 YTD free cash flow after capex and dividends but before acquisition activity and debt retirements was about $3.1 billion. ($ in millions) Cash Flow From Operations $6,600 Beginning Cash $1,200 12/31/09 11 11
Slide 12: Acquisitions
Third Quarter 2010 Earnings - Acquisitions • Our acquisition costs in 3Q10 were $1.1 billion and we expect to spend about $300 million in the first part of 4Q10. – Through these acquisitions we expect to add about 10 mboe/d average production in 4Q10. – These acquisitions have a run rate of about 12
Slide 13: Rig Activity
Third Quarter 2010 Earnings - Rig Activity • Drilling rigs – At the beginning of 2010 we were running 11 development rigs in California and 5 rigs in the Permian. – We are currently running 16 drilling rigs in California and 9 in the Permian and expect our year-end exit rate rig count to reach 19 ri
Slide 14: Rig Activity
Third Quarter 2010 Earnings - Rig Activity • Workover rigs – In the Permian, we are currently running 94 workover rigs, compared with the 57 rigs we had at the beginning of the year. – We currently expect to be operating 110 rigs at the end of 2010. – A portion of workover expenditures are expensed
Slide 15: Oil and Gas Production - 4Q10 Outlook
Third Quarter 2010 Earnings - Oil and Gas Production - 4Q10 Outlook • We expect oil and gas production and sales volumes to be in the range of 760 to 770 mboe/d at 3Q10 average oil prices. – Volume increases in 4Q10 are expected to come from California, Oman's Mukhaizna field and the acquisitions. –
Slide 16: 4Q10 Outlook
Third Quarter 2010 Earnings - 4Q10 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 $39 mm; – A swing of $0.50 per mm BTU in domestic gas prices has a $27 mm impact
Slide 17: 4Q10 Outlook
Third Quarter 2010 Earnings - 4Q10 Outlook • The Chemical segment is expected to provide earnings for 4Q10 of $100 to $120 million. – The fourth quarter is usually the weakest quarter for the business. – We expect that continued margin improvements will be offset by the typical seasonal slowdown in
Slide 18: Century Plant
Third Quarter 2010 Earnings - Century Plant • The Century Plant has just started operations and will be providing additional CO2 to support growth in our Permian operations. – We expect that the plant will yield about 180 mmcf/d of CO2 next year to support our Permian EOR operations. – We are in the
Slide 19: California Update
Third Quarter 2010 Earnings - California Update • Exploration Activity: – During the first nine months of 2010, we drilled 7 conventional exploration and extension wells in California. – Of these, 5 were outside of the Kern County Discovery area. – Two of these wells are currently being tested. – We
Slide 20: California Update
Third Quarter 2010 Earnings - California Update • We are continuing to have problems with our gas processing and gathering infrastructure at Elk Hills. • As a result, we expect our gas and related NGL production to be about flat in 4Q10. • We have ordered and commenced construction of the first new
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