Occidental Petroleum Corporation · NYSE:OXY
Occidental Petroleum — Q1 2014 Earnings Presentation
24 slides from Occidental Petroleum's earnings presentation, May 5, 2014
Slide 1: First Quarter 2014 Earnings Conference Call
Occidental Petroleum Corporation First Quarter 2014 Earnings Conference Call May 5, 2014
Slide 2: First Quarter 2014 Earnings – Highlights
First Quarter 2014 Earnings – Highlights Domestic oil production (Bbl/d) Total production (boe/d) Core earnings* Core diluted EPS* 1Q14 CFFO before WC Cash balance @ 3/31/2014 1Q14 Shares repurchased 2 *See Significant Items Affecting Earnings in the Investor Relations Supplemental Schedules. Result
Slide 3: Oil & Gas Segment Earnings
3 1Q14 vs. 4Q13 ($ in millions) Core Results 1Q14 $2.1 B 4Q13 2.1 B 1Q13 1.9 B First Quarter 2014 Earnings – Oil & Gas Segment Earnings $37
Slide 4: Oil and Gas Total Company Production
4 First Quarter 2014 Earnings – Oil and Gas Total Company Production 745 (5) (4) (1) 5 763 Company-wide Oil & Gas Production (mboe/d) 750
Slide 5: Oil and Gas Domestic Production
5 2 First Quarter 2014 Earnings – Oil and Gas Domestic Production 478 (2) 470 4 474 Domestic Oil & Gas Production (mboe/d)
Slide 6: 2014 Cash Margin
First Quarter 2014 Earnings – 2014 Cash Margin 6 $69.92* $70.80* $66.08* 1Q14 exploration expense was $55 mm. We expect 2Q14 exploration expense to be ~$80 mm. ($/boe) * Weighted average realized price. Controllable production costs declined from $10.97 / boe in 4Q13 to $10.79 / boe in 1Q14.
Slide 7: Chemical Segment Core Earnings
7 1Q14 vs. 4Q13 ($ in millions) Guidance 2Q14 expected to be ~$130 mm. First Quarter 2014 Earnings – Chemical Segment Core Earnings Core Results 1Q14 $ 136 mm 4Q13 128 mm 1Q13 159 mm * Higher Energy & Feedstock Costs.
Slide 8: Midstream, Marketing & Other Segment Earnings
8 1Q14 vs. 4Q13 ($ in millions) First Quarter 2014 Earnings – Midstream, Marketing & Other Segment Earnings Core Results 1Q14 $170 mm 4Q13 $68 mm 1Q13 $215 mm
Slide 9: 1Q 2014 Cash Flow
9 First Quarter 2014 Earnings – 1Q 2014 Cash Flow 1Q 2014 ($ in millions) CFFO before Working Capital changes $2,900 ($2,200) Beginning Cash $3,400 12/31/13 $2,300 1Q’14 Debt / Capital 14% Return on Equity* 13% Return on Capital Employed* 11% * Note: Annualized; See attached GAAP reconciliation. ($2
Slide 10: 2Q14 & FY 2014 Guidance Summary
10 First Quarter 2014 Earnings – 2Q14 & FY 2014 Guidance Summary Oil & Gas Segment * Domestic 2Q 2014 Production* Oil – 7,000 - 9,000 bbls/d growth. NGLs – flat. Natural gas – modest decline. Total – 6,000 – 8,000 boe/d growth. International 2Q 2014 Production Production volumes, at current prices a
Slide 11: Strategic Initiative Update
First Quarter 2014 Earnings – Strategic Initiative Update We closed the sale of our Hugoton asset for pre-tax proceeds of $1.3 bn. We sold ~25% of our interest in PAGP for pre-tax proceeds of $1.4 bn in 4Q13. Our remaining interest is worth over $4 bn at current market prices. We are continuing to e
Slide 12: Capitalization
12 First Quarter 2014 Earnings – Capitalization We have repurchased more than 20 mm shares since the announcement of our strategic initiatives in 4Q14, of which 10.5 mm shares were purchased in 1Q14. Remaining shares under the current repurchase program total 26.5 million shares, which we plan to co
Slide 13: California Resources Corporation
First Quarter 2014 Earnings – California Resources Corporation 13 California Resources Corporation will be a growth oriented business with a large resource base and self-sufficient cash flow. Pure play California resources company able to spend virtually all of its cash flow to grow production, rese
Slide 14: Oil and Gas Focus Areas
Oil and Gas Focus Areas United States MENA Latin America First Quarter 2014 Earnings – Remaining Occidental Business Leading position in the Permian Basin. Permian Resources is a growth driver. Al Hosn Project, Dolphin, and a smaller size in rest of MENA. Additional opportunities for growth with par
Slide 15: Permian Basin Overview
First Quarter 2014 Earnings – Permian Basin Overview 15 Permian Resources is the cornerstone growth operation of the domestic business. Substantial acreage position with significant resource development potential. We have used our knowledge and experience to gradually shift our program toward horizo
Slide 16: Free Cash Flow from New Projects Offsets California Separation
16 First Quarter 2014 Earnings – Free Cash Flow from New Projects Offsets California Separation We expect that new operating cash flow from long lead-time projects combined with significant reductions in spending will more than offset the cash flow generated by the California assets. Operating Cash
Slide 17: Return on Capital Employed
Return on Capital Employed ~ 23% Improvement 17 First Quarter 2014 Earnings – Improving ROCE Improved capital efficiency and operating cost structure. Long-lead-time project start-ups: Al Hosn Sour Gas, BridgeTex Pipeline and the New Johnsonville Plant. Separation of our California business will pro
Slide 18: Share Repurchases
18 First Quarter 2014 Earnings – Share Repurchases We expect that we will be able to reduce our share count by 40 - 50 mm through the dividends from the California separation and by ~25 mm shares from the monetization of our remaining interest in PAGP. Coupled with the buyback of the 26.5 million sh
Slide 19: Permian Resources Goals
First Quarter 2014 Earnings – Permian Permian Resources Goals 19 Continue evaluating potential across acreage position. Pilot development strategies to optimize returns. 211 ~10%+ CAGR Production 150 198 57 48 212 67 145 1Q14 Results – Permian Resources 5% production growth Q / Q ~$328 million CapEx
Slide 20: Midland Basin Focus Areas – S. Curtis Ranch & Dora Roberts
First Quarter 2014 Earnings – Midland Basin 20 Focus Areas – S. Curtis Ranch & Dora Roberts Average lateral length ~6,000 feet. Piloting increased lateral lengths up to 10,000 feet. SCR 2318H 24 hour IP: 1,166 boepd 30 day average: 576 boepd 18 Horizontal Wells on Production, 12 drilled this year. ~
Slide 21: Texas Delaware Basin Focus Area - Barilla Draw
First Quarter 2014 Earnings – Texas Delaware Basin 21 Focus Area - Barilla Draw 5 Wolfcamp wells brought on production in A, B and C intervals. Drilling & completion costs averaging $8.5 mm due to greater depth. Water distribution project expected to lower capital costs. 5 Wolfcamp Horizontals 1A, 2
Slide 22: SE New Mexico
First Quarter 2014 Earnings – SE New Mexico 22 New Mexico Permian 26 Hz wells drilled (since end of 2012) 17 Bone Spring IP 700 boepd 30 Day Rate of 400 boepd 90% Liquids 9 Brushy Canyon IP 1,100 boepd with ESP (3 wells) Average drilling time of 30 days. Total drilling & completion costs of ~$5.6 mi
Slide 23: Permian Resources
First Quarter 2014 Earnings – Permian Resources 23 Identified several key ways to improve well performance and completion techniques. Transition from gel to slick water fracs. Reviewing cluster spacing. Evaluating optimal lateral lengths. Expect to average 26 rigs during 2Q14. For FY 2014, remain on
Slide 24: Conference Call Q&A
First Quarter 2014 Earnings Conference Call Q&A