Occidental Petroleum Corporation · NYSE:OXY
Occidental Petroleum — Q1 2023 Earnings Presentation
40 slides from Occidental Petroleum's earnings presentation, May 10, 2023
Slide 1: First Quarter Earnings Conference Call
05.10.23 First 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 First Quarter Highlights Cash Flow Priorities Financials Closing Remarks
Slide 4: First Quarter 2023 Performance Highlights
HIGHLIGHTS 4 FIRST QUARTER 2023 PERFORMANCE $1.7 B $750 MM $650 MM Free Cash Flow Shares Preferred Equity Generation Repurchased Redemption Triggered OIL & GAS OXYCHEM INVESTMENT Production of 1,220 Mboed Pre-Tax Income of $472 MM GRADE Moody’s IG Rating, Positive Outlook NOTE: FREE CASH FLOW EXCLUD
Slide 5: Oil & Gas Update
HIGHLIGHTS 5 OIL & GAS UPDATE Al Hosn expansion ahead of schedule; production ramp-up initiated New Oxy single-well initial production record in the DJ Basin driven by well design optimization Drilled longest well by any operator in the DJ basin at 25,499 ft. This well also broke Oxy's lateral
Slide 6: Outline
6 OUTLINE First Quarter Highlights Cash Flow Priorities Financials Closing Remarks
Slide 7: Cash Flow Priorities
ONGOING FOCUS 2023 7 Maintain Production Base CASH FLOW Preserve asset base integrity PRIORITIES and longevity Sustainable & Growing Dividend Apply technical and Through-the-cycle sustainability with long-term growth potential operational excellence to preserve and enhance CURRENT FOCUS premier asse
Slide 8: Enterprise Value Rebalancing
NEXT PHASE COMMENCED – PREFERRED EQUITY REDEMPTION 8 ENTERPRISE VALUE REBALANCING Enterprise Value Reallocation Delivers Value for Shareholders 9/30/2020 3/31/2023 • Allocation of Excess Cash Flow for deleveraging a key driver of EV rebalancing and equity appreciation 16% 22% • Next phase of shareho
Slide 9: Outline
9 OUTLINE First Quarter Highlights Cash Flow Priorities Financials Closing Remarks
Slide 10: Preferred Equity Redemption
FINANCIALS 10 PREFERRED EQUITY REDEMPTION 4Q22 $0.81 Year-To-Date >$4/Share Shareholder Distributions 1Q23 3Q22 and Preferred Equity Redemption1 $0.95 $2.18 ~$712 MM excess distributions Distribution added to $4.671 2Q22 to common shareholders2 rolling 12-month calculation 2Q23 from through Total 05
Slide 11: First Quarter 2023 Results
FINANCIALS 11 FIRST QUARTER 2023 RESULTS Reported Production versus Mboed Reported Guidance Midpoint Reconciliation GULF OF MEXICO Adjusted diluted EPS1 $1.09 Higher uptime performance and planned +15 downtime optimization Reported diluted EPS1 $1.00 PERMIAN Strong new well performance, higher +14 C
Slide 12: Second Quarter and Full-Year 2023 Guidance
FINANCIALS 12 SECOND QUARTER AND FULL-YEAR 2023 GUIDANCE OIL & GAS 2Q23 FY 2023 MIDSTREAM2 2Q23 FY 2023 Total Company Production (Mboed) 1,156 - 1,196 1,170 - 1,220 Pre-tax Income $(100) - $0 MM $(100) - $100 MM Permian Production (Mboed) 558 - 578 565 - 589 Midland - MEH Spread $ / bbl. $0.15 - $0.
Slide 13: Outline
13 OUTLINE First Quarter Highlights Cash Flow Priorities Financials Closing Remarks
Slide 14: Zero In on Value
14 ZERO IN ON VALUE COMPLEMENTARY SHAREHOLDER STRENGTHENING PATHWAY TO BUSINESSES RETURNS FINANCIAL PROFILE NET ZERO • Oil & Gas • Sustainable Common Dividend • Partial Preferred Equity • Direct Air Capture • OxyChem • Share Repurchase Program Redemption Commenced • Carbon Sequestration • Midstream
Slide 15: Appendix
15 Appendix
Slide 16: Appendix Contents
16 APPENDIX Financial Information Oil & Gas Update Asset Overview LCV Overview
Slide 17: Shareholder Return Framework
SHAREHOLDER RETURN FRAMEWORK 17 Sustainable & • Recently increased quarterly dividend to $0.18 per share Growing Dividend • Dividend sustainable at $40 WTI • $3 B of share repurchases completed in 2022 Share v • Refreshed $3 B share repurchase authorization ~25% complete Repurchases • Supports capit
Slide 18: Cash Flow Sensitivities
FINANCIAL INFORMATION 18 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 19: 2023 Capital Plan
FINANCIAL INFORMATION Capital $ B 2022 Actuals 2023 Plan 19 2023 CAPITAL PLAN Oil & Gas $3.8 $4.3 - 4.7 Chemicals $0.3 $0.6 Sustaining Capital1 Midstream & Corporate $0.3 $0.3 ~$300 MM change from 2022: Subtotal $4.4 $5.2 - $5.6 • Sustaining capital increased to ~$3.5 B for Net-Zero Pathway2 $0.1 $0
Slide 20: Diluted Share Count Example
FINANCIAL INFORMATION 20 DILUTED SHARE COUNT EXAMPLE Basic Shares Outstanding + Incremental Diluted Shares = Total Diluted Outstanding Shares Incremental diluted shares include June 2020 warrants, Berkshire Hathaway warrants, and performance awards Treasury method assumes proceeds from exercised
Slide 21: Appendix Contents
21 APPENDIX Financial Information Oil & Gas Update Asset Overview LCV Overview
Slide 22: Domestic Onshore Assets
OIL & GAS UPDATE 22 DOMESTIC ONSHORE ASSETS PERMIAN 2023 ACTIVITY ROCKIES 2023 ACTIVITY $2.3 B - $2.6 B ~23 Gross ~10 Net 380 - 410 $0.7 - $0.8 B ~3 Gross ~2 Net 90 - 105 Capex Rigs Rigs Wells Online Capex Rigs Rigs Wells Online 100% OBO OBO 100% OBO EOR Base Maint Powder Base Maint EOR Powder EOR R
Slide 23: Top Tier Well Performance Continues
TOP TIER WELL PERFORMANCE CONTINUES DELAWARE TO IMPROVE 23 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
Slide 24: Leading Delaware Basin Well Performance
OIL & GAS UPDATE 24 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 Average 6-month cum. oil
Slide 25: Domestic Inventory & Innovation
DOMESTIC Domestic Onshore Operated Inventory Total Gross Operated Locations 8,000 25 INVENTORY & 6,885 INNOVATION 6,000 5,592 4,000 3,812 Depth of low-breakeven inventory demonstrates quality 2,000 1,321 and quantity of Oxy’s domestic unconventional portfolio - Breakeven <$30 Breakeven <$40 Breakeve
Slide 26: Al Hosn Gas – Project Execution and Operational Excellence
Al Hosn Gas – Project Execution and Operational Excellence 26 • World-class, state-of-the-art sour-gas project • Plant capacity increased twice between 2016 and 2018 with minimal capital investment • 2021: Expansion project commenced; Saipem awarded EPC, long lead items procured • 2022: Full plant 1
Slide 27: Appendix Contents
27 APPENDIX Financial Information Oil & Gas Update Asset Overview LCV Overview
Slide 28: Oxy's Combined Integrated Portfolio
OXY’S COMBINED INTEGRATED PORTFOLIO 28 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 41 1,220 Mboed Ro
Slide 29: OxyChem Market Leading Position
OXYCHEM 2,500 Pre-Tax Earnings (EBIT)1 29 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
Slide 30: OxyChem Projects Update
OXYCHEM PROJECTS UPDATE 30 BATTLEGROUND MODERNIZATION & EXPANSION PROJECT 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 technol
Slide 31: Midstream & Marketing Guidance Reconciliation
MIDSTREAM & MARKETING 31 GUIDANCE RECONCILIATION PHYSICAL MIDSTREAM BUSINESS • 1Q23 income approximated guidance. 2Q23 1Q23 Guide 1Q23 Actuals 2Q23 Guide guidance higher than 1Q23 due to completed $200 annual plant turnarounds at Al Hosn and Quarterly Pre-Tax Income ($ MM) Dolphin $150 CRUDE EXPORTS
Slide 32: One of the Largest U.S. Acreage Holders
ONE OF THE LARGEST U.S. ACREAGE HOLDERS 32 9.5 MM Net Total U.S. Acres ROCKIES 1.1 MM ACRES PERMIAN 2.8 MM ACRES POWDER RIVER UNCONVENTIONAL 0.3 MM POWDER RIVER 1.4 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
Slide 33: U.S. Onshore Overview
U.S. ONSHORE OVERVIEW 33 1Q23 NET PRODUCTION ROCKIES Oil NGLs Gas Total 1.1 MM ACRES (Mbod) (Mbbld) MMcfd) (Mboed) Permian 337 136 637 579 Rockies & Other Dmstc. 73 94 583 264 Total 410 230 1,220 843 OPTIMIZED ADVANCED DEPLOY STRATEGIC PERMIAN D EV ELOPMENT SUBSURFACE + POWERFUL + INFRASTRUCTURE STR
Slide 34: Gulf of Mexico Overview
GULF OF MEXICO OVERVIEW 34 ALABAMA GULF OF MEXICO MISSISSIPPI TOTAL ACREAGE 1.0 MM TEXAS LOUISIANA 1Q23 NET PRODUCTION MARLIN Oil (Mbod) 141 HORN MOUNTAIN NGLs (Mbbld) 13 HOLSTEIN NANSEN CONSTITUTION Gas (MMcfd) 99 CAESAR/TONGA BOOMVANG MARCO POLO Total (Mboed) 171 GUNNISON HEIDELBERG LUCIUS NOTE: A
Slide 35: International Overview
INTERNATIONAL OVERVIEW 35 U.A.E. 1Q23 NET PRODUCTION 2.5 MM ACRES Oil NGLs Gas Total (Mbod) (Mbbld) MMcfd) (Mboed) Algeria & Other Intl. 34 4 15 41 Al Hosn 10 18 196 61 Dolphin 6 7 140 36 Oman 58 - 62 68 ALGERIA OMAN Total 108 29 413 206 0.5 MM ACRES 6.0 MM ACRES MENA NOTE: AS OF 03/31/2023; ACREAGE
Slide 36: Appendix Contents
36 APPENDIX Financial Information Oil & Gas Update Asset Overview LCV Overview
Slide 37: Roadmap to Commercial Developments
CCUS TECHNOLOGY AND MARKET ADVANCEMENT 37 ROADMAP TO COMMERCIAL DEVELOPMENTS VOLUNTARY & COMPLIANCE POLICY 2021 – 2024 2025 – 2030 DE-RISK & INNOVATE MANUFACTURING MODE CURRENT DIRECT AIR MAR 2022 CAPTURE & REVENUE SEQUESTRATION $250 – 450/t $400 – 630/t $400 – 630/t IRA 45Q Enhancements DAC to EOR:
Slide 38: Progress Toward DAC - Stratos
DIRECT AIR CAPTURE 38 PROGRESS TOWARD DAC 1 - STRATOS LICENSE TO BUILD Exclusive DAC and AIR TO FUELS™ license for U.S. deployment. OLCV has a worldwide agreement with Carbon Engineering as the execution partner for all DAC and AIR TO FUELS™ deployments INNOVATION CENTRE Carbon Engineering Innovatio
Slide 39: Oxy to Utilize Clean Energy Generated by NET Power's First Utility Scale Plant
OXY TO UTILIZE CLEAN ENERGY GENERATED BY NET POWER’S FIRST UTILITY SCALE PLANT 39 Oxy, ~40% equity ownership in NET Power, expected to be the primary offtaker of clean energy generated by NET Power's first commercial plant using a transformational technology that inherently captures nearly all emiss
Slide 40: Oxy Zero In
VB OXY ZERO IN”