Occidental Petroleum Corporation · NYSE:OXY
Occidental Petroleum — Q3 2024 Earnings Presentation
45 slides from Occidental Petroleum's earnings presentation, Nov 13, 2024
Slide 1: Third Quarter Earnings Conference Call
11.13.24 Third 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: Zero in on Value: Key Takeaways
ZERO IN ON VALUE 3 Key Takeaways Operational excellence driving • ~$3.1 B CFFO1 delivered by strong operations, company-wide financial results • Raised full-year guidance across all segments CrownRock • Production exceeding early expectations through strong well integration performance and base upti
Slide 4: Outline
4 OUTLINE Third Quarter Highlights Oil & Gas Update DAC Projects Status Debt Reduction Financials Closing Comments Marco Polo
Slide 5: Strong Performance Across All Segments Drives Financial Success
THIRD QUARTER HIGHLIGHTS 5 STRONG PERFORMANCE ACROSS ALL SEGMENTS DRIVES FINANCIAL SUCCESS Oil & Gas Midstream 1,412 +$145 MM Mboed Adjusted Pre-Tax Income Includes Record Quarterly Outperformance U.S. Production Financial Balance Sheet $1.5 B $4.0 B Free Cash Flow1 Debt Repaid in the Quarter 1EXCLU
Slide 6: Outline
6 OUTLINE Third Quarter Highlights Oil & Gas Update DAC Projects Status Debt Reduction Financials Closing Comments Marco Polo
Slide 7: U.S. Onshore Oil & Gas Update
THIRD QUARTER HIGHLIGHTS 7 U.S. ONSHORE OIL & GAS UPDATE OXY EXTENDING U.S. ONSHORE WELL PERFORMANCE LEADERSHIP 6 well Wolfcamp XY / A development in New Mexico produced ~1.2 MMBO in 90 days ◦ Average Oil / 1000’ >35% better than industry average Wolfcamp XY / A Oxy has drilled 8 of the top 10 D
Slide 8: Advantaged Scale and Operating Efficiencies Drive Cost Improvements
OIL & GAS UPDATE 8 ADVANTAGED SCALE AND OPERATING EFFICIENCIES DRIVE COST IMPROVEMENTS DELIVERING HIGHER MARGIN BARRELS Domestic Lease Operating Expenses Operational Execution – Higher uptime and operability ($ / Boe) $10.96 $11.00 ◦ Automation driving improved well performance and reliability $10
Slide 9: CrownRock Integration Delivering from Day 1
9 CROWNROCK INTEGRATION HITTING THE GROUND RUNNING DELIVERING FROM DAY 1 EFFICIENCY OPPORTUNITIES IDENTIFIED CROWNROCK PRODUCTION EXCEEDING EXPECTATIONS ✓ +5 Outstanding team and asset performance Mboed 3Q24 guidance outperformance supports production guidance raise (109 Mboed net contribution to Ox
Slide 10: Outline
10 OUTLINE Third Quarter Highlights Oil & Gas Update DAC Projects Status Debt Reduction Financials Closing Comments DAC STRATOS Marco Polo
Slide 11: DAC Projects Advancing
11 DAC PROJECTS ADVANCING STRATOS construction on track; R&D advancing in parallel • Initial capacity of 250 KTPA expected operational mid-2025 • Integrating accelerated R&D breakthroughs from Carbon Engineering’s Innovation Centre (CEIC) into sequenced build-out of remaining capacity • 2025 LCV net
Slide 12: Incorporating R&D Breakthroughs into STRATOS
12 12 INCORPORATING R&D BREAKTHROUGHS INTO Initial Capacity (250 KTPA capacity) STRATOS • Construction underway to complete central processing and supporting infrastructure for full 500 KTPA ahead of commissioning Design advancements for remaining 250 KTPA • Phased build-out to leverage key CEIC cap
Slide 13: Outline
13 OUTLINE Third Quarter Highlights Oil & Gas Update DAC Projects Status Debt Reduction Financials Closing Comments Marco Polo
Slide 14: Continuing Rapid Deleveraging Using Free Cash Flow and Divestiture Proceeds
CONTINUING RAPIDLY DELEVERAGING USING 14 SUCCESS IN DEBT FREE CASH FLOW AND REPAYMENTS DIVESTITURE PROCEEDS $0.5 B Nearly 90% of near-term >$4.5 B $4.5 $1.7 B $4.0 B debt repayments target met within two months Debt Repayments ($ B) Proceeds from sale of WES $3.0 common units1, the Barilla Draw
Slide 15: Outline
15 OUTLINE Third Quarter Highlights Oil & Gas Update DAC Projects Status Debt Reduction Financials Closing Comments Ingleside Marco Polo
Slide 16: Third Quarter 2024 Results
FINANCIALS 16 THIRD QUARTER 2024 RESULTS Reported Production versus Reported Mboed Guidance Midpoint Reconciliation Adjusted diluted EPS1 $1.00 PERMIAN Strong new well performance in Delaware and Midland Basins (including CrownRock), +30 Reported diluted EPS1 $0.98 higher uptime, and non-recurring O
Slide 17: Fourth Quarter Guidance
FINANCIALS 17 FOURTH QUARTER GUIDANCE RAISING FULL YEAR GUIDANCE FOR ALL THREE BUSINESS SEGMENTS OIL & GAS 4Q24 MIDSTREAM2 4Q24 Total Company Production (Mboed) 1,430 - 1,470 Pre-tax Income $(200) - $(100) MM Permian Production (Mboed) 751 - 769 Midland - MEH Spread $ / bbl $0.55 - $0.65 Rockies & O
Slide 18: Outline
18 OUTLINE Third Quarter Highlights Oil & Gas Update DAC Projects Status Debt Reduction Financials Closing Comments Marco Polo
Slide 19: Differentiated Value Proposition
DIFFERENTIATED VALUE PROPOSITION 19 Oxy’s premier diversified assets and distinguished operational capabilities create a runway for sustainable shareholder value accretion Operational Excellence High Quality Portfolio Low-Carbon Leadership Industry-leading performance Diversified asset base delivers
Slide 20: Appendix
20 Appendix
Slide 21: Appendix Contents
21 APPENDIX Financial Information Oil & Gas Update Asset Overview Low Carbon Ventures Abbreviations and Definitions
Slide 22: Permian Production Guidance
PERMIAN 4Q24 Production Guidance 22 PRODUCTION GUIDANCE 800 +9 760 Mboed Oxy unconventional and 748 +3 750 CrownRock assets contributing to improved 2024 Permian production 700 outlook Prior Implied 4Q24 4Q24 Incremental Production, 4Q24 CrownRock 4Q24 Production Production Guidance Ex-CrownRock Pro
Slide 23: Cash Flow Priorities
2024 ONGOING FOCUS 23 CASH FLOW Maintain Production Base Preserve asset base integrity PRIORITIES and longevity Sustainable & Growing Dividend Apply technical and Through-the-cycle sustainability operational excellence to with long-term growth potential preserve and enhance premier asset base in CUR
Slide 24: Shareholder Return Priorities
SHAREHOLDER RETURN PRIORITIES 24 Divestiture proceeds1 and ECF after Retire debt Sustainable and common dividend allocated to debt opportunistically growing dividend reduction until principal debt <$15.0 B and at maturity >$4.5 B debt repayments within ECF after common dividend 12 months of CrownRoc
Slide 25: Cash Flow Sensitivities
FINANCIAL INFORMATION 25 CASH FLOW SENSITIVITIES SENSITIVITIES INCLUDE ANNUALIZED AUG-DEC CROWNROCK IMPACT 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 spre
Slide 26: Diluted Share Count Example
FINANCIAL INFORMATION 26 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 27: Appendix Contents
27 APPENDIX Financial Information Oil & Gas Update Asset Overview Low Carbon Ventures Abbreviations and Definitions
Slide 28: Domestic Onshore Activity Plan Update
OIL & GAS UPDATE 28 DOMESTIC ONSHORE ACTIVITY PLAN UPDATE PERMIAN 2024 ACTIVITY1 ROCKIES 2024 ACTIVITY ~$3.0 B ~23 Gross ~12 Net 470 - 510 ~$0.9 B ~2 Gross ~2 Net 160 – 180 Capex Rigs Rigs Wells Online Capex Rigs Rigs Wells Online 100% OBO EOR OBO 100% Base Maint Base Maint PR Basin PR Basin EOR EOR
Slide 29: Subsurface Expertise Turning Secondary Horizons into Tier 1 Opportunities
SUBSURFACE EXPERTISE TURNING SECONDARY 29 HORIZONS INTO TIER 1 OPPORTUNITIES Oxy Delaware Leading the Way – Driving Inventory Improvement Secondary Wells Continue Outperformance and Expansion 500 …nearly matching Oxy’s record- ✓ Accelerating financial returns through near-term inventory high-grading
Slide 30: Leading Delaware Basin Well Performance
OIL & GAS UPDATE 30 LEADING DELAWARE BASIN WELL PERFORMANCE AVERAGE 6-MONTH CUMULATIVE OIL BY OPERATOR1 AVERAGE 12-MONTH CUMULATIVE OIL BY OPERATOR2 Oxy is 46% above the 6-month basin average Oxy is 54% above the 12-month basin average 200 300 180 Average 12-month cum. Oil, Mbbl 250 Average 6-month
Slide 31: Top Horizontal Wells in DJ Basin Since 2019
TOP 10 HORIZONTAL WELLS 31 IN DJ BASIN SINCE 2019 NEW WELL PRODUCTIVITY REACHING NEW HEIGHTS First 6-Month Cumulative Production, Mboe 300 200 100 0 #1 #2 #3 #4 #5 #6 #7 #8 #9 #10 SOURCE: ENVERUS PRISM DATA AS OF 10/30/24, HORIZONTAL DJ BASIN WELLS WITH FIRST PRODUCTION SINCE 01/01/2019 WITH 6-MONTH
Slide 32: Appendix Contents
32 APPENDIX Financial Information Oil & Gas Update Asset Overview Low Carbon Ventures Abbreviations and Definitions
Slide 33: Oxy's Combined Integrated Portfolio
OXY’S COMBINED INTEGRATED PORTFOLIO 33 Oil & Gas OxyChem Oxy Midstream Focused in world class Leading manufacturer of Integrated infrastructure and basins with a history of basic chemicals and marketing provide access to maximizing recovery significant cash generator global markets 31 Rockies 1,412
Slide 34: OxyChem Market Leading Position
OXYCHEM 2,500 Pre-Tax Income 34 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 principal 500 chemical product produced 0 ◦ Largest merchant caustic soda seller in 2
Slide 35: Midstream & Marketing Guidance Reconciliation
MIDSTREAM & MARKETING 35 GUIDANCE RECONCILIATION PHYSICAL MIDSTREAM & LCV BUSINESSES 3Q24 Guide 3Q24 Actuals 4Q24 Guide • 3Q24 income above guidance primarily $200 due to timing of LCV activity; 4Q24 Quarterly Pre-Tax Income ($ MM) guidance reflects contract-related $150 production volume decreases
Slide 36: One of the Largest U.S. Acreage Holders
ONE OF THE LARGEST U.S. ACREAGE HOLDERS 36 9.4 MM Net Total U.S. Acres ROCKIES 0.8 MM ACRES PERMIAN 2.9 MM ACRES POWDER RIVER UNCONVENTIONAL 0.1 MM POWDER RIVER 1.5 MM DJ BASIN CONVENTIONAL 0.7 MM 1.4 MM Excludes acreage outside of active DJ BASIN operating areas OTHER ONSHORE GULF OF MEXICO TOTAL A
Slide 37: U.S. Onshore Overview
U.S. ONSHORE OVERVIEW 37 3Q24 NET PRODUCTION ROCKIES Oil NGLs Gas Total 0.8 MM ACRES (Mbod) (Mbbld) (MMcfd) (Mboed) Permian 402 186 848 729 Rockies & Other Dmstc. 94 112 691 321 Total 496 298 1,539 1,050 OPTIMIZED ADVANCED DEPLOY STRATEGIC PERMIAN D EV ELOPMENT SUBSURFACE + POWERFUL + INFRASTRUCTURE
Slide 38: Gulf of Mexico Overview
GULF OF MEXICO OVERVIEW 38 ALABAMA GULF OF MEXICO MISSISSIPPI TOTAL ACREAGE 1.1 MM TEXAS LOUISIANA 3Q24 NET PRODUCTION MARLIN Oil (Mbod) 115 HORN MOUNTAIN NGLs (Mbbld) 9 HOLSTEIN CONSTITUTION Gas (MMcfd) 69 CAESAR/TONGA BOOMVANG MARCO POLO Total (Mboed) 136 GUNNISON HEIDELBERG LUCIUS NOTE: AS OF 09/
Slide 39: International Overview
INTERNATIONAL OVERVIEW 39 UAE1 3Q24 NET PRODUCTION 2.5 MM ACRES Oil NGLs Gas Total (Mbod) (Mbbld) (MMcfd) (Mboed) Algeria & Other Intl. 26 2 20 31 Al Hosn 15 27 292 91 Dolphin 6 8 152 39 Oman 55 - 57 65 ALGERIA OMAN Total 102 37 521 226 0.5 MM ACRES 6.0 MM ACRES MENA NOTE: AS OF 09/30/24; ACREAGE AM
Slide 40: Appendix Contents
40 APPENDIX Financial Information Oil & Gas Update Asset Overview Low Carbon Ventures Abbreviations and Definitions
Slide 41: DAC Investment Principles
LOW CARBON VENTURES DAC INVESTMENT PRINCIPLES 41 • 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 be ≤$600 MM a
Slide 42: Oxy to Utilize NET Power's Transformational Technology for Cleaner Energy
OXY TO UTILIZE NET POWER’S 42 TRANSFORMATIONAL TECHNOLOGY FOR CLEANER ENERGY Oxy has ~42% equity ownership in NET Power Inc. (NYSE: NPWR) Net Power’s patented technology uses natural gas to generate clean, reliable power while inherently capturing over 97% of CO2 from power generation First ut
Slide 43: Appendix Contents
43 APPENDIX Financial Information Oil & Gas Update Asset Overview Low Carbon Ventures Abbreviations and Definitions
Slide 44: Abbreviations and Definitions
ABBREVIATIONS AND DEFINITIONS 44 Abbreviations B – Billion FID – Final Investment Decision MM – Million BBL – Barrel FT – Feet MMBO – Million Barrels of Oil BO – Barrel of Oil FY – Full Year MMBTU – Million British Thermal Units CCUS – Carbon Capture, Utilization and Storage GAAP – Generally Accepte
Slide 45: Oxy Zero In
VB OXY ZERO IN”