Occidental Petroleum Corporation · NYSE:OXY
Occidental Petroleum — Q4 2020 Earnings Presentation
46 slides from Occidental Petroleum's earnings presentation, Feb 23, 2021
Slide 1: Fourth Quarter Earnings Conference Call
Fourth Quarter Earnings Conference Call Occidental Petroleum Corporation February 23, 2021
Slide 2: Cautionary Statements
Cautionary Statements Forward-Looking Statements This presentation contains “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to statements about Occidental Petroleum Corporation’s (“Occi
Slide 3: Fourth Quarter Highlights
Occidental • • Fourth Quarter Highlights Financial Results and Guidance 3
Slide 4: Fourth Quarter 2020 Highlights
Fourth Quarter 2020 Highlights $0.8 B $2.4 B $2.0 B Free Cash Flow Divestitures Refinancing Generation Closed Completed Strong Operational Land Grant Near-Term Excellence and Colombia Onshore Maturities Moved Efficiency Non-Core Acreage to Later Years Note: See the reconciliations to comparable GAAP
Slide 5: 2020 Success Supports 2021 Financial Position
Transitioned into 2021 with Improved Financial Position 2020 Success Supports 2021 Financial Position $ $2.4 B $ $7.0 B Debt reduced in 2020 Near-term debt extended through 2025+ $1.8 B 22% 1 Reduced overhead budget 2021 Base declined lowered continues into 2021 $2.9 B $2-3 B 2 2021 Capital budget R
Slide 6: Best-in-Class Sustaining Capital
Best-in-Class Sustaining Capital $2.9 B of Capital Stabilizes Full Year Production at ~1,140 Mboed Leading Capital Intensity: Capital intensity continues to improve • World-class assets with low breakevens and subsurface expertise to maximize value • Efficient execution accelerates time to market an
Slide 7: Divestiture Progress Continues
Divestiture Progress Continues 12 11 10 $8.2 B Divestitures Cumulative Asset Sales ($ B) 9 $2-3 B $350 MM $700 MM 8 $1.3 B 7 $2.4 B 6 $565 MM $90 MM $70 MM $260 MM 5 $750 MM $200 MM $3.3 B 4 Remaining Divestiture Target 3 $5.5 B 2 2020 Divestitures 1 $650 MM 2019 Divestitures 0 Plains Mozambique Mid
Slide 8: Fourth Quarter Oil & Gas Highlights
Fourth Quarter Oil & Gas Highlights Record-Setting Efficiency: Continued to lower drilling and completion times improving time to market • GoM – Record cycle time of 68 days from spud to first production on Lucius platform • Permian – Record 296 stages pumped in one month by one completion crew in N
Slide 9: Cash Flow Priorities
Cash Flow Maintain Production Base Current Focus Priorities Debt Reduction Near-term, excess cash flow and divestiture proceeds Sustainable Dividend Medium to be allocated to Term debt reduction Dividend increases Growth Capital and growth capital to follow substantial reduction in debt Repurchase S
Slide 10: Financial Results and Guidance
Occidental • Fourth Quarter Highlights • Financial Results and Guidance 10
Slide 11: Fourth Quarter 2020 Results
Fourth Quarter 2020 Results Reported Adjusted EPS ($0.78) 4Q20 Reported versus Guidance Midpoint Mboed Reconciliation Reported diluted EPS ($1.41) Permian Resources: improved new well performance, better uptime and ethane recovery +12 rates, and high OBO volumes 4Q20 CFFO before working capital $1.4
Slide 12: 1Q and Full-Year 2021 Guidance Estimates
1Q and Full-Year 2021 Guidance Estimates Oil & Gas OxyChem Corporate 1Q21 Production 1Q21 Pre-tax income: ~$225 MM FY 2021 Domestic tax rate: 22% • Total Company: 1,085 – 1,115 Mboed FY 2021 pre-tax income: $775 - $825 MM FY 2021 International tax rate: 45% • Permian: 450 – 460 Mboed1 Midstream & Ma
Slide 13: 2021 Capital Plan
2021 Capital Plan $2.9 B Capital Program by Asset Capital Program by Type Facilities 23% $0.1 Midstream & Marketing $0.2 Exploration & Corporate D,C&E 56% $0.3 Oil & Gas $0.3 OxyChem Base Maintenance 10% $0.4 GoM Exploration 6% OBO & Other 5% International $0.4 Rockies & Other Capital Program Highli
Slide 14: Appendix
Appendix • 2021 Activity • Financial Information • Oil and Gas Update • Asset Overview • Environmental, Social, and Governance • WES 14
Slide 15: 2021 Activity – Domestic Onshore Assets
2021 Activity – Domestic Onshore Assets Permian Rockies $1.2 B ~11 Gross ~5 Net 175 – 205 $0.4 B ~2 Gross ~2 Net 145 – 175 Capex Rigs Rigs Wells Online Appraisal Capex Rigs Rigs Wells Online 100% 100% Powder OBO Base Maint River Basin Base Maint OBO Powder OBO Powder Facilities River OBO Growth Midl
Slide 16: Int'l + GOM Milestones - 2021
Int’l + GOM Milestones - 2021 2020 2021 2022 2023 • Lucius, N Hadrian, Holstein • HMW (3 wells), Lucius • Caesar-Tonga (CTE), Lucius • Holstein, Blind Faith (OBO) • Yellowfin, Fiesta, Cactus • Exploration wells • SS pumping online • Lucius OBN • HMW umbilical, riser, platform GOM • Horn Mountain Wes
Slide 17: Appendix
Appendix • 2021 Activity • Financial Information • Oil and Gas Update • Asset Overview • Environmental, Social, and Governance • WES 17
Slide 18: Midstream & Marketing Guidance Reconciliation
Midstream & Marketing Guidance Reconciliation $100 4Q20 Guide 4Q20 Actual 1Q21 Guide Physical Midstream Business • 4Q20 above guidance due to improved commodity pricing and lower operating $50 costs. 1Q21 guidance reflects Dolphin turn-around Crude Exports from Gulf Coast Quarterly Pre-Tax Income ($
Slide 19: Cash Flow Sensitivities
Cash Flow Sensitivities Oil & Gas Midstream & Marketing OxyChem • Annualized cash flow changes • Annualized cash flow changes • Annualized cash flow changes ~$215 MM per $1.00 / bbl ~$65 MM per $0.25 / bbl ~$30 MM per $10 / ton change change in oil prices change in Midland to MEH in realized caustic
Slide 20: 2021 Natural Gas Hedges
2021 Natural Gas Hedges Two-Way Costless Collar Secures Natural Gas Price Floor of Short Call $2.50 For 530 MMcfd $4.00 $3.64 530 MMcfd Hedge Details $3.50 Long Put Summary 2021 $2.50 2021 Settlement Realized Price ($/Mcf) $3.00 Natural Gas collar (millions of MMBtu) 177.0 Average price per MMBtu (N
Slide 21: Appendix
Appendix • 2021 Activity • Financial Information • Oil and Gas Update • Asset Overview • Environmental, Social, and Governance • WES 21
Slide 22: Leading Delaware Basin Well Performance
Leading Delaware Basin Well Performance 6 Month Cumulative Oil Top 100 Wells1 12 Month Cumulative Oil Top 100 Wells2 Oxy’s subsurface expertise delivers Basin leading wells for less cost: Oxy has 39% of the best wells, while completing less than 9% of Competitors use 18% more proppant: ~$500 M total
Slide 23: Appendix
Appendix • 2021 Activity • Financial Information • Oil and Gas Update • Asset Overview • Environmental, Social, and Governance • WES 23
Slide 24: Oxy's Combined Integrated Portfolio
Oxy’s Combined Integrated Portfolio Oil & Gas OxyChem Oxy Midstream and WES Focused in world class Leading manufacturer of Integrated infrastructure and basins with a history of basic chemicals and marketing provides access to maximizing recovery significant cash generator global markets 28 1.2 MMbo
Slide 25: One of the Largest U.S. Acreage Holders
One of the Largest U.S. Acreage Holders 9.5 MM Net Total U.S. Acres Rockies Permian 1.1 MM Acres 3.0 MM Acres Powder River Basin – 0.4 MM Permian Unconventional – 1.6 MM DJ Basin – 0.7 MM Excludes acreage outside of active operating Permian Conventional – 1.4 MM areas Other Onshore Gulf of Mexico 4.
Slide 26: U.S. Onshore Overview
U.S. Onshore Overview Rockies Permian 1.1 MM Acres 3.0 MM Acres 4Q20 Net Production Oil NGLs Gas Total (Mbod) (Mbbld) (MMcfd) (Mboed) Permian Resources 201 89 550 382 Permian EOR 102 28 29 135 DJ Basin 75 82 618 260 Other Domestic 10 2 38 18 Total 388 201 1,235 795 Note: Acreage amounts presented on
Slide 27: Gulf of Mexico Overview
Gulf of Mexico Overview Gulf of Mexico 0.8 MM Acres MARLIN HORN MOUNTAIN 4Q20 Net Production NANSEN HOLSTEIN BOOMVANG CONSTITUTION Total CAESAR/TONGA MARCO POLO GUNNISON Oil (Mbod) 89 HEIDELBERG LUCIUS NGLs (Mbbld) 7 Gas (MMcfd) 54 Total (Mboed) 105 Note: Acreage amounts presented on this slide are
Slide 28: International Overview
International Overview U.A.E. 4Q20 Net Production1 2.5 MM Acres Oil NGLs Gas Total (Mbod) (Mbbld) (MMcfd) (Mboed) Latin America 27 - 7 28 Algeria 37 1 - 38 Al Hosn 14 25 240 79 Dolphin 7 8 167 43 Oman 66 - 98 82 Total 151 34 512 270 Algeria Oman 0.5 MM Acres 6.0 MM Acres 1Excludes production from di
Slide 29: Abu Dhabi Block ON-3 & ON-5
Abu Dhabi United Arab Emirates BLOCK 9 Block ON-3 ON-5 BLOCK 27 AL HOSN BLOCK 30 & ON-5 ON-3 • 2.5 million gross acres BLOCK 65 BLOCK 51 BLOCK 62 • Multi-reservoir discovery in Block ON-3 • High potential location > Prolific fields nearby > ON-3 adjacent to Oxy’s Al Hosn Field > Leverage Oxy’s regio
Slide 30: OxyChem: Market Leading Position
OxyChem: Market Leading Position OxyChem at a Glance Earnings Highlights • Major global exporter of all core products • Positive cash flow generation • Top tier global producer in every product produced throughout cycle > Largest merchant caustic soda seller in the world • Integrated assets capture
Slide 31: Appendix
Appendix • 2021 Activity • Financial Information • Oil and Gas Update • Asset Overview • Environmental, Social, and Governance • WES 31
Slide 32: Leader in Lower Permian Emissions Intensity
Leader in Lower Permian Emissions Intensity Strategically Focused on Greenhouse Gas Emissions Reduction Low Emission Intensity with Leading Basin Production Low Emission Intensity with More Producing Wells 60 800 60 Size by Gross Permian Production (Mboed) Permian Greenhouse Gas Intensity (mt CO2e p
Slide 33: New Mexico Water Recycling Program
New Mexico Water Recycling Program Water infrastructure drives value and New Mexico Recycled Water Usage1 environmental benefits 100% • Continue to increase the percentage of 90% recycled water used in operations 80% Demonstrating water environmental 70% stewardship 60% • Partnership support with Ne
Slide 34: Continued Focus on Employee Safety
Continued Focus on Employee Safety Employee + Contractor IIR1 ✓ Safety remains top priority during the pandemic 2017 2018 2019 20202 .39 .39 .29 .193 ✓ Safety improved in 2020 despite historically active GoM storm season and the pandemic Best safety performance ever in 20204✓ Expanding process safet
Slide 35: TCFD-Aligned Climate Report Highlights
TCFD-Aligned Climate Report Highlights 35
Slide 36: Decarbonizing Operations and Reducing GHG Emissions
Decarbonizing Operations and Reducing GHG Emissions 36
Slide 37: Reducing Operational Emissions
Reducing Operational Emissions 37
Slide 38: Pathway to Achieve Net-Zero
Pathway to Achieve Net-Zero 38
Slide 39: Oxy Low Carbon Ventures
Oxy Low Carbon Ventures MAJOR INITATIVES Oxy is using our long-standing, industry-leading 01 expertise in carbon management to lower our own CCUS Project Development emissions and accelerate a global low-carbon economy Commercializing new capture and use technologies, providing CCUS through: advisor
Slide 40: Occidental Carbon Management Timeline
Occidental Carbon Management Timeline 1972 1983 2000 2008 2010 2015 2017 CO2-EOR initiated in Denver Unit begins CO2- Acquired Altura Original 45Q tax credit CO2 Century Plant came Denver Unit CO2 field Hobbs CO2 field Crane/Upton Counties, EOR operations Energy, a leading for carbon storage and onl
Slide 41: Producing a Lower Carbon Barrel of Oil
Producing a Lower Carbon Barrel of Oil First look at the world’s largest Direct Air Capture plant Oxy Low Carbon Ventures and the management team from Rusheen Capital formed development company 1PointFive 1PointFive licensed technology from Carbon Engineering to develop the DAC facilities Announced
Slide 42: Climate-Related Commitments and Targets
Climate-Related Commitments and Targets Net-zero for our operational and energy use emissions (Scope 1 and 2) before 2040, with ambition to achieve before 2035 Net-zero for our total emissions inventory including product use (Scope 1, 2, and 3), with ambition to achieve before 2050 Total carbon impa
Slide 43: Diversity, Inclusion, and Belonging
Diversity, Inclusion, and Belonging Occidental’s culture of Diversity, Inclusion, and Belonging creates an environment where differences are appreciated, all employees are included and everyone feels that they belong. As part of our commitment to support this culture, we conducted a robust survey ac
Slide 44: Appendix
Appendix • 2021 Activity • Financial Information • Oil and Gas Update • Asset Overview • Environmental, Social, and Governance • WES 44
Slide 45: WES Operating as an Independent Company
WES Operating as an Independent Company Relationship at a Glance • Effective Dec. 2019, WES’s management team transferred from Oxy to WES; the remaining WES employees transferred in 2020 • Rights of WES unitholders to replace WES’s general partner were significantly expanded in 2020 • Oxy accounts f
Slide 46: Occidental
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