Occidental Petroleum Corporation · NYSE:OXY
Occidental Petroleum — Q2 2022 Earnings Presentation
36 slides from Occidental Petroleum's earnings presentation, Aug 3, 2022
Slide 1: Second Quarter Earnings Conference Call
08.03.22 Second Quarter Earnings Conference Call
Slide 2: Cautionary Statements
CAUTIONARY STATEMENTS 2 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 (“Oc
Slide 3: Outline
3 OUTLINE Second Quarter Highlights Financials Closing Remarks
Slide 4: Shareholder Return Framework
COMPLETE 4 SHAREHOLDER RETURN Increased quarterly common dividend to Repaid > $5 B of principal and reduced FRAMEWORK $0.13 per share net debt to < $20 B Shareholder return framework advancing 2022 – IN PROGRESS with near-term debt targets achieved Reduce gross debt to the Repurchase $3 B high-teens
Slide 5: Second Quarter 2022 Performance Highlights
HIGHLIGHTS 5 SECOND QUARTER 2022 PERFORMANCE $4.2 B $4.8 B $3.161 Free Cash Flow Debt Adjusted Generation Retired EPS OIL & GAS OXYCHEM $1.1 B2 Enhanced and Highest Earnings in Initiated Share Expanded Over 30 Years Repurchases Permian JV NOTE: FREE CASH FLOW EXCLUDES WORKING CAPITAL; SEE THE RECONC
Slide 6: Oil & Gas Update
HIGHLIGHTS 6 OIL & GAS UPDATE Enhanced and expanded Ecopetrol partnership ◦ Midland JV capital carry extended through 1Q25 with Ecopetrol earning additional working interest ◦ New Delaware Basin JV accelerates development of high- quality inventory on 20,000 net acres First oil from Horn Mountai
Slide 7: OxyChem Battleground Membrane Conversion
HIGHLIGHTS 77 OXYCHEM BATTLEGROUND MEMBRANE CONVERSION • Modernization and expansion of the Battleground plant expected to increase cash flow through improved margins and higher product volumes, while enhancing operational flexibility: • Conversion from diaphragm to membrane technology expected to i
Slide 8: Outline
8 OUTLINE Second Quarter Highlights Financials Closing Remarks
Slide 9: Second Quarter 2022 Results
FINANCIALS 9 SECOND QUARTER 2022 RESULTS Reported Production versus Guidance Mboed Reported Midpoint Reconciliation Adjusted diluted EPS1 $3.16 GULF OF MEXICO Higher uptime and less weather downtime +4 than expected Reported diluted EPS1 $3.47 INTERNATIONAL CFFO before working capital $5.1 B +1 High
Slide 10: Third Quarter and Full-Year 2022 Guidance
FINANCIALS 10 THIRD QUARTER AND FULL-YEAR 2022 GUIDANCE OIL & GAS OXYCHEM CORPORATE – FY 2022 3Q22 Production 3Q22 pre-tax income: ~$500 MM •Domestic tax rate: 22% • Total Company: 1,140 - 1,170 Mboed FY 2022 pre-tax income: $2.2 - $2.4 B •International tax rate: 45% • Permian: 523 - 533 Mboed •Over
Slide 11: Strong Cash Generation Enabled Rapid Debt Reduction
STRONG CASH GENERATION ENABLED RAPID DEBT REDUCTION AND DRIVES RETURN OF CAPITAL $B Primary Focus on Debt Reduction Increase Return of Capital $5 $16.3 B1 FCF generated Share Repurchases $3 $1 Dividend Growth $14.9 B1 Debt retired Targets Achieved $(1) Moderated Debt Reduction Near-Term Debt Moderat
Slide 12: Outline
12 OUTLINE Second Quarter Highlights Financials Closing Remarks
Slide 13: Zero In On Value
13 ZERO IN ON VALUE COMPLEMENTARY SHAREHOLDER STRENGTHENING PATHWAY TO BUSINESSES RETURNS FINANCIAL PROFILE NET ZERO • Oil & Gas • Sustainable Common Dividend • Prioritizing Debt Reduction • Direct Air Capture • OxyChem • Share Repurchase Program • Investment Grade Ambition • Carbon Sequestration •
Slide 14: Appendix
14 Appendix
Slide 15: Appendix Contents
15 APPENDIX Financial Information Oil & Gas Update Asset Overview Environment, Social & Governance
Slide 16: Cash Flow Priorities Continued
16 Maintain Production Base CONTINUED 2022 Preserve asset base integrity FOCUS and longevity CASH FLOW Debt Reduction PRIORITIES Lower expenses and enhance balance sheet flexibility Excess cash flow continues to be Sustainable & Growing Dividend CURRENT allocated to balance Through-the-cycle sustain
Slide 17: 2022 Capital Plan
FINANCIAL INFORMATION 17 2022 CAPITAL PLAN $3.9 B - $4.3 B CAPITAL PROGRAM BY ASSET CAPITAL PROGRAM BY TYPE Facilities 20% $0.2 Exploration & Corporate $0.3 - $0.5 D,C&E 58% Oil & Gas Base Maintenance 7% Midstream & Marketing $0.3 (includes LCV) Exploration 4% $0.5 OxyChem OBO & Other 11% $0.5 GoM C
Slide 18: Balance Sheet Improvement Drives Shareholder Value
FINANCIAL INFORMATION 18 BALANCE SHEET IMPROVEMENT DRIVES SHAREHOLDER VALUE $90 Enterprise Value ($ B) PRIORITIZING DEBT REDUCTION $80 Market capitalization becomes a 38% 38% larger percentage of Enterprise $70 Value as debt is reduced 18% 20% 17% $60 13% 7% Equity benefits from rising $50 16% 2
Slide 19: Cash Flow Sensitivities
FINANCIAL INFORMATION 19 CASH FLOW SENSITIVITIES OIL & GAS MIDSTREAM & MARKETING Annualized cash flow changes ~$225 MM per $1.00 / Annualized cash flow changes ~$65 MM per $0.25 / bbl bbl change in oil prices change in Midland to MEH spread ◦ ~$205 MM per $1.00 / bbl change in WTI price ◦ ~35-da
Slide 20: Appendix Contents
20 APPENDIX Financial Information Oil & Gas Update Asset Overview Environment, Social & Governance
Slide 21: Domestic Onshore Assets
OIL & GAS UPDATE 21 DOMESTIC ONSHORE ASSETS PERMIAN 2022 ACTIVITY ROCKIES 2022 ACTIVITY $1.9 B - $2.1 B ~18 Gross ~10 Net 310 - 330 $0.4 B ~2 Gross ~1 Net 75 - 85 Capex Rigs Rigs Wells Online Capex Rigs Rigs Wells Online 100% OBO EOR OBO 100% EOR OBO EOR OBO Powder Base Maint Midland River Basin Bas
Slide 22: Leading Delaware Basin Well Performance
OIL & GAS UPDATE 22 LEADING DELAWARE BASIN WELL PERFORMANCE AVERAGE 6-MONTH CUMULATIVE OIL BY OPERATOR1 AVERAGE 12-MONTH CUMULATIVE OIL BY OPERATOR2 Oxy is 32% above the 6-month basin average Oxy is 25% above the 12-month basin average 180 250 Average 12-month cum oil, Mbbl Average 6-month cum oil,
Slide 23: Appendix Contents
23 APPENDIX Financial Information Oil & Gas Update Asset Overview Environment, Social & Governance
Slide 24: Oxy's Combined Integrated Portfolio
OXY’S COMBINED INTEGRATED PORTFOLIO 24 Oil & Gas OxyChem Oxy Midstream Focused in world class Leading manufacturer of basic Integrated infrastructure and basins with a history of chemicals and significant cash marketing provide access to global maximizing recovery generator markets 53 1.15 MMboed Ro
Slide 25: One of the Largest U.S. Acreage Holders
ONE OF THE LARGEST U.S. ACREAGE HOLDERS 25 9.4 MM Net Total U.S. Acres Rockies Permian 1.2 MM Acres 2.8 MM Acres Powder River Basin – 0.4 MM Permian Unconventional – 1.4 MM DJ Basin – 0.8 MM Excludes acreage outside of active Permian Conventional – 1.4 MM operating areas Other Onshore Gulf of Mexico
Slide 26: U.S. Onshore Overview
U.S. ONSHORE OVERVIEW 26 Rockies Permian 1.2 MM Acres 2.8 MM Acres 2Q22 Net Production Oil NGLs Gas Total (Mbod) (Mbbld) (MMcfd) (Mboed) Permian 291 114 528 493 Rockies & Other Dmstc. 82 100 582 279 Total 373 214 1,110 772 NOTE: AS OF 06/30/2022; ACREAGE AMOUNTS REPRESENT NET ACRES
Slide 27: Gulf of Mexico Overview
GULF OF MEXICO OVERVIEW 27 Gulf of Mexico 0.8 MM Acres MARLIN 2Q22 Net Production HORN MOUNTAIN Oil (Mbod) 122 NANSEN HOLSTEIN NGLs (Mbbld) 11 CONSTITUTION BOOMVANG MARCO POLO CAESAR/TONGA Gas (MMcfd) 81 GUNNISON HEIDELBERG Total (Mboed) 147 LUCIUS NOTE: AS OF 06/30/2022; ACREAGE AMOUNTS REPRESENT N
Slide 28: International Overview
INTERNATIONAL OVERVIEW 28 U.A.E. 2.5 MM Acres 2Q22 Net Production Oil NGLs Gas Total (Mbod) (Mbbld) (MMcfd) (Mboed) Algeria & Other Intl. 47 4 13 53 Al Hosn 13 23 237 76 Dolphin 6 8 141 37 Oman 50 - 71 62 Total 116 35 462 228 Algeria Oman 0.5 MM Acres 6.0 MM Acres NOTE: AS OF 06/30/2022; ACREAGE AMO
Slide 29: OxyChem Market Leading Position
OXYCHEM 2,400 Pre-Tax Earnings (EBIT)1 29 MARKET LEADING POSITION 2,000 • 23 owned facilities worldwide 1,600 $ MM • Integrated assets capture benefits 1,200 of favorable market conditions 800 • Top tier global producer in every product 400 produced 0 ◦ Largest merchant caustic soda seller in 2010 2
Slide 30: Midstream & Marketing Guidance Reconciliation
MIDSTREAM & MARKETING 30 GUIDANCE RECONCILIATION PHYSICAL MIDSTREAM BUSINESS • 2Q22 income above guidance primarily driven 2Q22 Guide 2Q22 Actuals 3Q22 Guide by higher sulfur prices and volumes. 3Q22 $200 guidance lower than 2Q22 due to lower sulfur Quarterly Pre-Tax Income ($ MM) prices. $150 CRUDE
Slide 31: Appendix Contents
31 APPENDIX Financial Information Oil & Gas Update Asset Overview Environment, Social & Governance
Slide 32: Pathway to Net Zero
PATHWAY TO NET ZERO 32 Oxy has set the following goals, among others, to achieve net zero across our total emissions inventory in accordance with the Paris Agreement1: 2024 2032 2040 2050 BEYOND Reduce total operational Facilitate geologic storage Achieve net-zero Achieve net zero for our Capture an
Slide 33: Strategic Investment Approach
BUILDING A CCUS PLATFORM ACROSS THE CARBON CAPTURE VALUE CHAIN 33 STRATEGIC INVESTMENT APPROACH Oxy is leveraging its carbon management expertise, experience and infrastructure to accelerate the global development and commercialization of CCUS technologies, scale carbon markets and develop innovativ
Slide 34: OLCV Investment
BUILDING A CCUS PLATFORM ACROSS THE CARBON CAPTURE VALUE CHAIN 34 OLCV TECHNOLOGY, PROJECTS, AND PLATFORMS ZERO-EMISSION CO2 CAPTURE & PIPELINES & CO2 CARBON TRACKING CARBON UTILIZATION & POWER REMOVAL GAS PROCESSING SEQUESTRATION METHODOLOGIES AND PRODUCTS TOOLS OXY EXISTING OXYCHEM PERMIAN CO2 PIP
Slide 35: CO2 Storage Hub Development
CO2 STORAGE 35 HUB DEVELOPMENT CURRENT SUPPORT SCENARIO 3 DEDICATED SEQUESTRATION HUBS Project Tundra EXPECTED TO BE ONLINE BY 2025 Multiple land/pore space access agreements executed with expectation of more than 100,000 net acres by the end of 2022 Planning multiple sequestration sites on the
Slide 36: Oxy Zero In
VB OXY ZERO IN”