Occidental Petroleum Corporation · NYSE:OXY
Occidental Petroleum — Q3 2009 Earnings Presentation
20 slides from Occidental Petroleum's earnings presentation, Oct 22, 2009
Slide 1: Third Quarter 2009 Earnings Conference Call
Third Quarter 2009 Earnings Conference Call October 22, 2009
Slide 2: Third Quarter 2009 Earnings – Highlights
2 Third Quarter 2009 Earnings – Highlights • Core Results - $929 Million vs. $2.3 Billion in 3Q08 – Core EPS $1.14 (diluted) vs. $2.77 in 3Q08. • Net Income - $927 Million vs. $2.3 Billion in 3Q08 – EPS $1.14 (diluted) vs. $2.77 in 3Q08.
Slide 3: Oil & Gas Segment Variance Analysis – 3Q09 vs. 3Q08
3 Third Quarter 2009 Earnings – Oil & Gas Segment Variance Analysis – 3Q09 vs. 3Q08 • Core Results for 3Q09 of $1.5 B vs. $3.6 B in 3Q08 – Decrease due to lower crude oil and natural gas prices, partially offset by higher sales volumes and lower operating expenses. $3,618 $2,358 ($ in millions) $62
Slide 4: Oil & Gas Segment
4 Third Quarter 2009 Earnings – Oil & Gas Segment 3Q09 3Q08 Reported Segment Earnings ($ mm) $1,464 $3,618 WTI Oil Price ($/bbl) $68.30 $117.98 NYMEX Gas Price ($/mcf) $3.60 $10.72 Oxy’s Realized Prices Worldwide Oil ($/bbl) $62.79 $104.15 US Natural Gas ($/mcf) $3.04 $9.35
Slide 5: Oil & Gas Segment – Production (year-over-year)
5 Third Quarter 2009 Earnings – Oil & Gas Segment – Production 3Q09 3Q08 • Oil and Gas Sales Volumes (mboe/d) 628 588 – + 6.8% year-over-year • Year-over-year sales volume increase includes: – + 22 mboe/d from domestic operations; – + 16 mboe/d from Oman, and; – + 10 mboe/d from Dolphin, partially o
Slide 6: Oil & Gas Segment – Production (sequential)
6 Third Quarter 2009 Earnings – Oil & Gas Segment – Production 3Q09 2Q09 • Oil and Gas Sales Volumes (mboe/d) 628 649 – - 21 mboe/d or - 3.2% quarter-over-quarter • Sequential sales volume decrease includes: – Dolphin volumes were lower by 10 mboe/d resulting mainly from higher catch-up cost-recover
Slide 7: Oil & Gas Segment – Cash Production Costs and Taxes
7 Third Quarter 2009 Earnings – Oil & Gas Segment – Cash Production Costs and Taxes • Oil and gas cash production costs, excluding production and property taxes, were $10.27 per boe for YTD09. – This represents a 15% decline from 2008 full-year costs of $12.13 per boe. • Oil and gas cash production
Slide 8: Chemical Segment Variance Analysis – 3Q09 vs. 3Q08
8 Third Quarter 2009 Earnings – Chemical Segment Variance Analysis – 3Q09 vs. 3Q08 • Core Results for 3Q09 of $72 mm vs. $219 mm in 3Q08 – Reflects the continued weakness in the U.S. housing, automotive and durable goods sectors resulting in lower margins for caustic soda and PVC and lower volumes f
Slide 9: Midstream Segment Variance Analysis – 3Q09 vs. 3Q08
9 Third Quarter 2009 Earnings – Midstream Segment Variance Analysis – 3Q09 vs. 3Q08 • Core Results for 3Q09 of $77 mm vs. $66 mm in 3Q08 – Increase due to higher margins in the marketing business, partially offset by lower NGL realized prices in the gas processing business. ($ in millions) $63 $9 $4
Slide 10: Effective Tax Rate
10 Third Quarter 2009 Earnings – Effective Tax Rate • Worldwide effective tax rate was 37% in 3Q09 vs. our guidance of 40% - 42%; – Decrease in rate reflects tax benefits resulting from the relinquishment of international exploration contracts and a higher proportion of expected total year domestic
Slide 11: Nine Months Results
11 Third Quarter 2009 Earnings – Nine Months Results YTD2009 YTD2008 • Net Income ($ mm) $1,977 $6,414 • EPS (diluted) $2.43 $7.77 • Oil and Gas Sales Volumes (mboe/d) 643 594 – +8% year-over-year • Capex was $746 mm in 3Q09 and $2.6 billion for YTD09. – We currently anticipate total year 2009 capex
Slide 12: Cash Flow 2009 YTD
12 Third Quarter 2009 Earnings – Cash Flow 2009 YTD $5,600 $2,600 ($ in millions) Cash Flow From Operations $3,800 $600 $794 $59 $65 $1,600 Debt Beginning Issuance Cash $750 $1,800 Debt 12/31/08 Reduction $691 Available Capex Acquisitions Dividends Net Debt Other Ending Cash Cash & Foreign Issuance
Slide 13: Shares Outstanding
13 Third Quarter 2009 Earnings – Shares Outstanding Shares Outstanding (mm) YTD09 9/30/09 Weighted Average Basic 811.1 Weighted Average Diluted 813.9 Basic Shares Outstanding 811.7 Diluted Shares Outstanding 814.5
Slide 14: 4Q09 Outlook
14 Third Quarter 2009 Earnings – 4Q09 Outlook • We expect oil and gas sales volumes in 4Q09 to increase to about 650 to 660 mboe/d at about current oil prices. – The fourth quarter production is expected to reflect increases from California, Argentina and the Middle East/North Africa. • Commodity Pr
Slide 15: 4Q09 Outlook
15 Third Quarter 2009 Earnings – 4Q09 Outlook • For the Chemical segment, we expect continued weakness in the U.S. housing, automotive and durable goods sectors in 4Q09, which is the weakest quarter for this business. – Chemical earnings for 4Q09 are expected to be between $20 mm to $40 mm as oppose
Slide 16: Acquisition Activity
16 Third Quarter 2009 Earnings – Acquisition Activity • Last month we announced the acquisition of Phibro from Citigroup for a price that approximates the liquidation value of its assets. – As of the most recent information, the vast majority of Phibro's assets consist of cash and marketable securit
Slide 17: California Exploration
17 Third Quarter 2009 Earnings – California Exploration • Excluding the Kern County discovery: – Over the course of little over a year, we have drilled 36 exploration wells seeking non-traditional hydrocarbon bearing zones in California. – Of these wells, 11 are commercial and 10 are currently being
Slide 18: California Exploration – Kern County Discovery
18 Third Quarter 2009 Earnings – California Exploration – Kern County Discovery KERN COUNTY DISCOVERY AREA The discovery, which is near Elk Hills, is not below any producing zones. 3Q09 2Q09 1Q09 Gross Production* – Natural Gas (mmcf/d) 105 74 28 – Liquids (mb/d) 8.5 5 3 – Total mboe/d 26.0 17.3 7.7
Slide 19: California Exploration – Kern County Discovery
19 Third Quarter 2009 Earnings – California Exploration – Kern County Discovery Sacramento • Cumulative gross production Valley Sacramento since the start of production through 9/30/09 has been 8.5 bcf of gas and 765,000 barrels of San liquids; Francisco San Joaquin • All of this production comes fr
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