Occidental Petroleum Corporation · NYSE:OXY

Occidental Petroleum — Investor Presentation (December 2023)

59 slides from Occidental Petroleum's investor presentation, December 2023

  1. Slide 1: Occidental Investor Presentation

    Occidental Investor Presentation Winter 2023/2024

  2. 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

  3. Slide 3: Outline

    3 OUTLINE CrownRock Acquisition Third Quarter Highlights Third Quarter Financials and Guidance DAC Development and Market Update

  4. Slide 4: Oxy to Acquire CrownRock

    DAWSON BORDEN 4 OXY TO ACQUIRE HOWARD CROWNROCK MARTIN NM TX Transaction Summary STERLING Purchase Price: $12.0 B MIDLAND 2024E Production: 170 Mboed1 GLASSCOCK Undeveloped Locations: ~1,700 UPTON REAGAN Valuation Drivers Oxy CrownRock Emphasis Placed on FCF Generation High-Margin Current Production

  5. Slide 5: Free Cash Flow Accretive Permian Acquisition

    CROWNROCK ACQUISITION 5 FREE CASH FLOW ACCRETIVE PERMIAN ACQUISITION Acquiring privately-owned CrownRock for $12.0 B Quality Midland Basin High-Performing Immediate Assets Scale Team FCF Accretion Top-tier, Permian ~170 Mboed1; Peer-leading ~$1.0 B FCF2 Basin asset high- >94,000 acres; results with

  6. Slide 6: CrownRock's Empowered, Results-Driven Organization

    CROWNROCK ACQUISITION 6 CROWNROCK'S EMPOWERED, RESULTS-DRIVEN ORGANIZATION Exceptional Safety Performance Safety-first culture with superior safety record CrownRock's operating team has a High Performing Technical and Operational Teams strong track record of running safe, Highly skilled, cross-disci

  7. Slide 7: High-Margin, Low Decline Midland Basin Acquisition

    CROWNROCK ACQUISITION 7 HIGH-MARGIN, LOW DECLINE Will improve near-term Permian unconventional production and development balance MIDLAND BASIN ACQUISITION Future upside resource recovery and lower cost opportunities ACQUISITION ASSET SUMMARY ~170 Mboed1, ~80% liquids, ~35% base decline • >94,000 ne

  8. Slide 8: Quality Stacked Horizons for Low-Risk Development and Future Upside

    CROWNROCK ACQUISITION 8 QUALITY STACKED HORIZONS FOR LOW-RISK DEVELOPMENT AND FUTURE UPSIDE Productivity (6-Month Cumulative Oil - bo/ft)1 Clearfork U. Spraberry M. Spraberry Inventory in core of Leveraging Oxy’s Leading the Midland Basin Subsurface Characterization Jo Mill and Data in the Midland B

  9. Slide 9: Expected to Enhance Inventory and Operating Efficiencies in the Midland Basin

    CROWNROCK ACQUISITION CREATING A MORE BALANCED 9 EXPECTED TO ENHANCE INVENTORY DEVELOPMENT PORTFOLIO AND OPERATING EFFICIENCIES IN Based on 2023 activity level Pre-Acquisition Post-Acquisition THE MIDLAND BASIN New Wells/Yr New Wells/Yr Will increase Permian unconventional sub-$40 breakeven inventor

  10. Slide 10: Financial Actions

    CROWNROCK ACQUISITION 10 FINANCIAL ACTIONS Quarterly Dividend Increase Increasing dividend $0.04 to $0.22 per share1 Maintain Investment Grade Accretive financial metrics; expect to retain IG ratings >$4.5 B Near-Term Debt Reduction Expect to complete within 12 months of closing $4.5 - $6.0 B Divest

  11. Slide 11: Transaction Financial Summary

    CROWNROCK ACQUISITION 11 TRANSACTION FINANCIAL SUMMARY Transaction Timing Signed agreement to acquire • Targeting first quarter 2024 close CrownRock for ~$12.0 B • Effective date January 1, 2024 Sources and Uses • New debt incurrence of $10.0 B to fund $9.1 B cash consideration and Transaction Value

  12. Slide 12: Premier Assets Drive FCF Accretion

    CROWNROCK ACQUISITION 12 PREMIER ASSETS DRIVE FCF ACCRETION Acquisition is Accretive to FCF per Diluted Share at a Range of Commodity Prices Illustrative Example: Free Cash Flow per Diluted Share Inclusive of Dividends1 $6.00 Resulting Accretion 25% Oxy Status Quo FCFPS $5.27  >25% accretion expect

  13. Slide 13: Shareholder Return Priorities

    CROWNROCK AQUISITION 13 SHAREHOLDER RETURN PRIORITIES Divesture proceeds and ECF after common Retire debt Sustainable and dividend allocated to debt reduction until opportunistically growing dividend principal debt <$15.0 B and at maturity >$4.5 B debt repayments within ECF after common dividend 12

  14. Slide 14: Transaction Deliverables

    CROWNROCK ACQUISITION TRANSACTION DELIVERABLES 14  Highly accretive to free cash flow per diluted share Financially Accretive  Immediately accretive without synergies although significant return enhancements identified  Supports increase in dividend and greater future dividend growth  Industry l

  15. Slide 15: Outline

    15 OUTLINE CrownRock Acquisition Third Quarter Highlights Third Quarter Financials and Guidance DAC Development and Market Update

  16. Slide 16: Third Quarter 2023 Performance

    HIGHLIGHTS 16 THIRD QUARTER 2023 PERFORMANCE $1.7 B OIL & GAS OXYCHEM Free Cash Flow 1,220 Mboed; Pre-Tax Income Generation Full Year Guidance of $373 MM Increased 11 Mboed DAC $600 MM $342 MM PARTNERSHIPS Common Shares Preferred Equity Secured STRATOS Repurchased Redemption Triggered JV Partner (~6

  17. Slide 17: Oil & Gas Update

    HIGHLIGHTS 17 OIL & GAS UPDATE MULTI-BASIN LEADING WELL PERFORMANCE  TX Delaware well (Meridian State) delivered a 30-day IP of 8,250 boed and 90-day cumulative production of 553 Mboe, an industry record for the Wolfcamp B  DJ Basin 2023 wells performing 36% better than record 2022 program INNOVAT

  18. Slide 18: Outline

    18 OUTLINE CrownRock Acquisition Third Quarter Highlights Third Quarter Financials and Guidance DAC Development and Market Update

  19. Slide 19: Third Quarter 2023 Results

    FINANCIALS 19 THIRD QUARTER 2023 RESULTS Reported Production versus Mboed Reported Guidance Midpoint Reconciliation Adjusted diluted EPS1 $1.18 ROCKIES Strong base and new well performance, +18 Reported diluted EPS1 $1.20 higher OBO volumes GULF OF MEXICO CFFO before working capital $3.3 B Higher up

  20. Slide 20: Fourth Quarter 2023 Guidance

    FINANCIALS 20 FOURTH QUARTER 2023 GUIDANCE OIL & GAS 4Q23 MIDSTREAM2 4Q23 Total Company Production (Mboed) 1,206 - 1,246 Pre-tax Income $(190) - $(90) MM Permian Production (Mboed) 571 - 591 Midland - MEH Spread $ / bbl. $0.10 - $0.20 Rockies & Other Production (Mboed) 263 - 269 DD&A 4Q23 Gulf of Me

  21. Slide 21: Outline

    21 OUTLINE CrownRock Acquisition Third Quarter Highlights Third Quarter Financials and Guidance DAC Development and Market Update

  22. Slide 22: DAC Development Drivers

    DAC DEVELOPMENT AND MARKET UPDATE 22 DAC DEVELOPMENT DRIVERS • Carbon Engineering (CE) DAC technology offers revolutionary scalability Technology • CE Innovation Centre identifying improvements for DAC 1+ • Synergies across Carbon Engineering, Oxy Major Projects, and OxyChem • U.S. passed Bipartisan

  23. Slide 23: Advancement of DAC+S Technology, Partnerships, and Market

    DAC DEVELOPMENT AND MARKET UPDATE 23 ADVANCEMENT OF DAC+S TECHNOLOGY, PARTNERSHIPS, AND MARKET Identified technology Early engineering showed Scalability and cost down potential Market demand and policy supports potential promise recognized DAC development  Identified as strategic fit  Formed LCV

  24. Slide 24: Innovation and Partnerships Expected to Reduce Cost of Capture

    DAC DEVELOPMENT AND MARKET UPDATE 24 INNOVATION AND PARTNERSHIPS EXPECTED TO REDUCE COST OF CAPTURE Cost of Capture1 Illustrative DAC Cost Reduction ($/t) Cost down innovation examples Key technology innovations, $500 manufacturing and supply • Improved air contactor geometry resulting in fewer chai

  25. Slide 25: DAC CDR Voluntary Market Demand Scenarios

    DAC DEVELOPMENT AND MARKET UPDATE 25 DAC CDR VOLUNTARY MARKET DEMAND SCENARIOS As DAC costs reduce, CDR market demand and partnership opportunities expected to increase DAC CDR demand (Mtpa) OXY OXY OWNERSHIP % RETURNS • Accelerated cost reduction DAC CDR: $300/t expected to drive CDR market 50 Mtpa

  26. Slide 26: DAC CDRs Expected to Be Economic Alternative to SAF

    DAC DEVELOPMENT AND MARKET UPDATE 26 DAC CDRs EXPECTED TO BE ECONOMIC ALTERNATIVE TO SAF CO2 abatement using SAF costs ~$750/t2 Beginning in 2027, CORSIA DAC CDRs expected to cost less than abatement using SAF requires airlines to offset their emissions1 Reduction in aviation CO2 emissions by 2050,

  27. Slide 27: DAC 1 & 2 Development Update

    DAC 1 & 2 27 DEVELOPMENT UPDATE STRATOS (DAC 1) • JV partner1 secured • Project ~30% complete • Expected commercially operational mid-2025 • Class VI well permit applications filed with U.S. EPA SOUTH TEXAS DAC HUB (DAC 2) • Selected to receive U.S. DOE grant, funding to be announced 2024 • DAC 2 FE

  28. Slide 28: DAC Investment Principles

    DAC DEVELOPMENT AND MARKET UPDATE DAC INVESTMENT PRINCIPLES 28 • Developing competitive-returns business with cash flow stability Returns Focused • DAC 2+ to meet return threshold for FID Demand-Driven • Market demand to drive development pace Development • Low-carbon program net capital expected to

  29. Slide 29: Appendix

    29 Appendix

  30. Slide 30: Appendix Contents

    30 APPENDIX CrownRock Transaction Financial Information LCV Overview Asset Overview Abbreviations and Definitions

  31. Slide 31: Illustrative Accretion Detail

    CROWNROCK TRANSACTION 31 ILLUSTRATIVE ACCRETION DETAIL Oxy SQ annualized CF sensitivity of ~$225 MM per $1.00 / bbl change in oil prices adjusted to an after-tax basis of ~$180 MM per $1.00 / bbl change assuming a corporate domestic tax rate of 22%. NOTE: SEE ABBREVIATIONS AND DEFINITIONS SLIDE FOR

  32. Slide 32: Pro Forma Balance Sheet and Deleveraging

    CROWNROCK TRANSACTION 32 PRO FORMA BALANCE SHEET AND DELEVERAGING Deleveraging Commitment Maintain Strong Liquidity  >$4.5 B principal repayments within 12 months of transaction close  $4.0 B Revolving Credit Facility  Divest $4.5 – $6.0 B of assets within 18 months of transaction close  $0.6 B

  33. Slide 33: High-Graded U.S. Onshore Portfolio

    HIGH-GRADED U.S. Onshore Unconventional Gross Operated Inventory 33 U.S. ONSHORE 12,000 CrownRock 10,800 PORTFOLIO 10,000 Oxy Permian Unconventional 7,600 8,000 Rockies 6,000 6,000 Acquisition of CrownRock 4,000 3,700 will increase Oxy’s sub- $40 breakeven inventory 2,000 by >25% - Breakeven <$40 Br

  34. Slide 34: Emissions Management

    CROWNROCK TRANSACTION 34 EMISSIONS MANAGEMENT • CrownRock shares Oxy's focus on emissions reduction • U.S. Onshore emissions reduction strategy and actions and has seen continuous improvement in emissions will continue in the Midland Basin and apply to the reduction since 2019 new CrownRock assets S

  35. Slide 35: Appendix Contents

    35 APPENDIX CrownRock Transaction Financial Information LCV Overview Asset Overview Abbreviations and Definitions

  36. Slide 36: Cash Flow Sensitivities

    FINANCIAL INFORMATION 36 CASH FLOW SENSITIVITIES OIL & GAS MIDSTREAM & MARKETING  Annualized cash flow changes ~$260 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 ◦ ~$240 MM per $1.00 / bbl change in WTI price ◦ ~35-da

  37. Slide 37: Preferred Equity Redemption

    FINANCIAL INFORMATION 37 PREFERRED EQUITY REDEMPTION 2Q23 $0.68 Year-To-Date >$4/Share Shareholder Distributions 3Q23 1Q23 and Preferred Equity Redemption1 $0.66 $0.95 $3.121 4Q22 $1,661 MM excess distributions to common shareholders2 Distribution added to rolling 12-month calculation 4Q23 through T

  38. Slide 38: Appendix Contents

    38 APPENDIX CrownRock Transaction Financial Information LCV Overview Asset Overview Abbreviations and Definitions

  39. Slide 39: DAC Commercial Development Assumptions

    LCV OVERVIEW 39 DAC COMMERCIAL DEVELOPMENT ASSUMPTIONS DAC 1 DAC 2 Nth Voluntary and Compliance REVENUE Policy CDR PRICE1 $400 – 630/t $400 – 630/t Value Based IRA 45Q Enhancements DAC to EOR: $130/t 45Q CREDIT2 $180/t $180/t Policy/Scope Driven DAC to Sequestration: $180/t Co-Captured CO2 to Seques

  40. Slide 40: Illustrative DAC Economic Modeling

    LCV OVERVIEW 40 ILLUSTRATIVE DAC ECONOMIC MODELING CASH FLOW PROFILE REVENUE COSTS  DAC 1 capital cost1 estimated at ~$1.3 B for first Carbon removal credit volumes DAC 1 & 2 cost of capture expected to be in the range 500k tonne per annum train, scaling capital by 1.7x  Approximately 90% of captu

  41. Slide 41: Cost of CO2 Reduction Using SAF

    LCV OVERVIEW 41 COST OF CO2 REDUCTION USING SAF DAC CDRs expected to be more economic than SAF Value Units Calculation Sources / Notes Assumption: January 2022 through September 2023 SAF price premium over conventional jet fuel 2,300 $ / tonne A estimated average. (Argus Whitepaper). Calculation: Em

  42. Slide 42: Appendix Contents

    42 APPENDIX CrownRock Transaction Financial Information LCV Overview Asset Overview Abbreviations and Definitions

  43. Slide 43: Differentiated Portfolio

    DIFFERENTIATED PORTFOLIO 43 Oxy’s premier diversified assets and distinguished operational capabilities create a runway for sustainable shareholder value accretion OIL & GAS OXYCHEM • Diversified portfolio with deep, improving inventory • Sector earnings leader with resilient free cash flow • Operat

  44. Slide 44: Oxy's Combined Integrated Portfolio

    OXY’S COMBINED INTEGRATED PORTFOLIO 44 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 30 Rockies • A le

  45. Slide 45: OxyChem Market Leading Position

    OXYCHEM 2,500 Pre-Tax Earnings (EBIT)1 45 MARKET LEADING POSITION 2,000 • 23 owned facilities worldwide 1,500 $ MM • Integrated assets capture benefits of favorable market conditions 1,000 • Top-tier global producer in every product 500 produced 0 ◦ Largest merchant caustic soda seller in 2010 2011

  46. Slide 46: Midstream & Marketing Guidance Reconciliation

    MIDSTREAM & MARKETING 46 GUIDANCE RECONCILIATION 3Q23 Guide 3Q23 Actuals 4Q23 Guide PHYSICAL MIDSTREAM BUSINESS $200 • 3Q23 income below guidance due to Quarterly Pre-Tax Income ($ MM) losses on equity investments; 4Q includes $150 seasonal decline in power prices $100 CRUDE EXPORTS FROM GULF COAST

  47. Slide 47: One of the Largest U.S. Acreage Holders

    ONE OF THE LARGEST U.S. ACREAGE HOLDERS 47 9.5 MM Net Total U.S. Acres ROCKIES 1.1 MM ACRES PERMIAN 2.9 MM ACRES POWDER RIVER UNCONVENTIONAL 0.3 MM POWDER RIVER 1.5 MM DJ BASIN CONVENTIONAL 0.8 MM 1.4 MM Excludes acreage outside of active DJ BASIN operating areas OTHER ONSHORE GULF OF MEXICO TOTAL A

  48. Slide 48: U.S. Onshore Overview

    U.S. ONSHORE OVERVIEW 48 3Q23 NET PRODUCTION ROCKIES Oil NGLs Gas Total 1.1 MM ACRES (Mbod) (Mbbld) (MMcfd) (Mboed) Permian 339 145 625 588 Rockies & Other Dmstc. 72 97 565 263 Total 411 242 1,190 851 OPTI MI ZED ADVANCED DEPLOY STRATEGIC PERMIAN D EV ELOPMENT SUBSURFACE + POWERFUL + INFRASTRUCTURE

  49. Slide 49: Gulf of Mexico Overview

    GULF OF MEXICO OVERVIEW 49 ALABAMA GULF OF MEXICO MISSISSIPPI TOTAL ACREAGE 0.9 MM TEXAS LOUISIANA 3Q23 NET PRODUCTION MARLIN Oil (Mbod) 123 HORN MOUNTAIN NGLs (Mbbld) 10 HOLSTEIN NANSEN CONSTITUTION Gas (MMcfd) 77 CAESAR/TONGA BOOMVANG MARCO POLO Total (Mboed) 146 GUNNISON HEIDELBERG LUCIUS NOTE: A

  50. Slide 50: International Overview

    INTERNATIONAL OVERVIEW 50 U.A.E. 3Q23 NET PRODUCTION 2.5 MM ACRES Oil NGLs Gas Total (Mbod) (Mbbld) (MMcfd) (Mboed) Algeria & Other Intl. 25 2 15 30 Al Hosn 15 26 284 88 Dolphin 6 8 149 39 Oman 57 - 53 66 ALGERIA OMAN Total 103 36 501 223 0.5 MM ACRES 6.0 MM ACRES MENA NOTE: AS OF 09/30/2023; ACREAG

  51. Slide 51: Technical and Operational Excellence

    TECHNICAL AND OPERATIONAL EXCELLENCE 51 CREATING VALUE THROUGH OPERATING INGENUITY WORLD-CLASS RESERVOIR INNOVATIVE WELL DESIGNS AND CHARACTERIZATION AND DATA APPLICATION TECHNOLOGY-DRIVEN EXECUTION • Oxy-developed proprietary workflows and • Long laterals, complex trajectories, and models combined

  52. Slide 52: Domestic Onshore Assets

    OIL & GAS UPDATE 52 DOMESTIC ONSHORE ASSETS PERMIAN 2023 ACTIVITY ROCKIES 2023 ACTIVITY ~$2.7 B ~24 Gross ~11 Net 380 - 410 ~$0.8 B ~3 Gross ~2 Net 100 – 110 Capex Rigs Rigs Wells Online Capex Rigs Rigs Wells Online 100% OBO OBO 100% EOR Base Maint Powder Powder Base Maint EOR EOR Powder River Basin

  53. Slide 53: Delaware Basin Well Productivity

    TOP-TIER WELL PERFORMANCE DELAWARE CONTINUES TO IMPROVE 53 BASIN WELL 450 PRODUCTIVITY 400 Superior-quality 350 inventory combined with subsurface expertise Cumulative Mboe 300 drives continuous improvement and value 250 200 1 Year Cumulative Improvement 150 2015 to 2022: +205% 100 2018 to 2022: +25

  54. Slide 54: Leading Delaware Basin Well Performance

    OIL & GAS UPDATE 54 LEADING DELAWARE BASIN WELL PERFORMANCE AVERAGE 6-MONTH CUMULATIVE OIL BY OPERATOR1 AVERAGE 12-MONTH CUMULATIVE OIL BY OPERATOR2 Oxy is 31% above the 6-month basin average Oxy is 21% above the 12-month basin average 180 250 Average 12-month cum. oil, Mbbl 150 Average 6-month cum.

  55. Slide 55: DJ Basin Well Productivity

    WELL DESIGN DRIVING MAJOR DJ BASIN WELL PRODUCTIVITY GAINS 55 PRODUCTIVITY 200 180 Data-driven well design and operational expertise 160 drive continuous 140 Cumulative Mboe improvement and value 120 1 Year Cumulative 100 Improvement 80 2015-2016 to 2022: +56% 60 2017-2021 to 2022: +25% 40 2022 to 2

  56. Slide 56: DJ Basin – Well Design Changes Driving Capital Efficiency

    DJ BASIN – WELL DESIGN CHANGES DRIVING CAPITAL EFFICIENCY 56 Subsurface Design Execution Performance Previous 18 WPS Driving Innovation and Efficiency Development Optimization Niobrara • Oxy’s ingenuity in well design and execution • Smaller surface impacts and accelerated time-to-market Benches ena

  57. Slide 57: Appendix Contents

    57 APPENDIX CrownRock Transaction Financial Information LCV Overview Asset Overview Abbreviations and Definitions

  58. Slide 58: Abbreviations and Definitions

    ABBREVIATIONS AND DEFINITIONS 58 Abbreviations B – Billion FCFPS – Free Cash Flow Per Share MMBTU – One Million British Thermal Units BE – Breakeven FCF – Free Cash Flow NPV 10 – Net Present Value at 10% Discount Rate BPD – Barrels Per Day FY – Full Year NRI – Net Revenue Interest BO – Barrel of Oil

  59. Slide 59: OXY ZERO IN”

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