Slide 1: Third Quarter 2007 Earnings Conference Call
Third Quarter 2007 Earnings Conference Call October 24, 2007
Slide 2: Third Quarter 2007 Earnings – Highlights
Reported Net Income - $1.324 Billion + 13% year-over-year Reported EPS $1.58 (diluted) Core Earnings - $1.210 Billion + 10% year-over-year Core EPS $1.45 (diluted); + 13% year-over-year Reported Net Income includes $106 mm A-T gains from the sale of non-core assets: $72 mm from sale of West Africa e
Slide 3: Oil & Gas Segment Variance Analysis - 3Q07 vs. 3Q06
Core results for 3Q07 of $1.988 Billion + 11% year-over-year ($ in millions) $1,790 $249 $101 $6 $158 $1,988 3Q 06 Sales Price Sales Volume/Mix Exploration Expense All Others* 3Q 07 *All Others include: DD&A increase ($40 mm), and higher operating expenses. Third Quarter 2007 Earnings - Oil & Gas Se
Slide 4: Oil & Gas Segment
3Q07 3Q06 Reported Segment Earnings ($ mm) *$2,029 $1,790 WTI Oil Price ($/bbl) $75.38 $70.53 NYMEX Gas Price ($/mcf) $6.69 $6.33 Oxy’s Realized Prices Worldwide Oil ($/bbl) $67.81 $61.83 US Natural Gas ($/mcf) $5.90 $5.88 *Includes gain from sale of oil and gas interests ($12 mm), gain on sale of e
Slide 5: Oil & Gas Segment – Production
3Q07 3Q06 Oil and Gas Production (mboe/day) 570 533 +7% year-over-year Production improvement due to: Dolphin start-up (+15 mboe/day); Volume increases in California, Colombia and Qatar. Production lower than earlier guidance due to: Delayed closing of Qatar asset acquisition from APC (- 4 mboe/day)
Slide 6: Oil & Gas Segment – Exploration Expense and Costs
3Q07 3Q06 Exploration Expense ($ mm) $68 $74 Oil and Gas production costs were $12.56 per boe through nine months of 2007 vs. $11.70 per boe for full-year 2006. Increase due to higher field operating and maintenance costs, mainly in the US and Latin America. Third Quarter 2007 Earnings – Oil & Gas S
Slide 7: Chemical Segment Variance Analysis - 3Q07 vs. 3Q06
Earnings for 3Q07 of $212 Million -15% year-over-year, although above our previous guidance; Improvement vs. guidance due to higher chloro-vinyls prices; Year-over-year decline primarily due to lower PVC margins. ($ in millions) $248 $36 $5 $13* $18 $212 3Q 06 Sales Price Sales Volume/Mix Operations
Slide 8: Nine Months Results
($ in millions, except EPS data) YTD2007 YTD2006 Net Income $3,948 $3,261 Reported EPS (diluted) $4.69 $3.78 Core Income $2,941 $3,332 Core EPS (diluted) $3.50 $3.86 Oil and Gas production (mboe/day) 563 539 Capital Spending $2,510 $1,977 Net Interest Expense $19 $80 Cash Flow from Operations $4,300
Slide 9: Cash Flow YTD2007
($ in millions) $5,880 $1,600 $2,500 $1,000 $1,000 $560 $910 $55 $1,455 Available Cash Asset Sale Proceeds Capex Acquisitions Debt Reduction Dividends Share Repurchase Other Ending Cash Balance Third Quarter 2007 Earnings – Cash Flow YTD2007 Cash Flow From Operations $4,300 Beginning Cash $1,580
Slide 10: Share Repurchase
Spent $910 million to repurchase 17.4 million shares YTD 2007 at an average price of $52.27 a share. 9.1 million shares remain under the current 55 million share repurchase authorization. Shares Outstanding (mm) YTD2007 9/30/07 Weighted Average Basic 837.0 Weighted Average Diluted 840.9 Basic Shares
Slide 11: Third Quarter 2007 Earnings - 4Q07
We expect Oil and Gas production of 600 to 615 mboe/day in 4Q07. Increase includes: 21 mboe/day from Dolphin; 5 mboe/day from the acquisition of Qatar assets from Anadarko. We expect Dolphin’s 4Q07 after-tax income in the range of $50 to $60 million. Dolphin expected to operate at 55% of capacity in
Slide 12: 4Q07 Production
(mboe/day) 570 21 5 13 615 3Q 07 Production Dolphin Qatar Acquisition Other 4Q 07 Production Third Quarter 2007 Earnings – 4Q07 Production Outlook
Slide 13: 2007 Year-End Production Exit Rate
We expect the oil and gas production year-end exit rate to be 615 to 635 mboe/day. Increase (vs. 3Q07) includes: 45 to 50 mboe/day from Dolphin; Dolphin exit rate could be higher depending on ramp-up pace of final train of the gas plant to full capacity; Expect Dolphin to run at full capacity during
Slide 14: 2007 Year-End Production Exit Rate
(mboe/day) 570 45 - 50 5 9 635 3Q 07 Production Dolphin Qatar Acquisition Latin America & Other 2007 Production Exit rate Third Quarter 2007 Earnings – 2007 Year-End Production Exit Rate Outlook
Slide 15: Commodity Price Sensitivity
Commodity Price Sensitivity A $1.00 per barrel change in oil prices impacts oil and gas quarterly earnings by about $35 mm before income taxes and Dolphin; A change of $0.50 per mmBTU in domestic gas prices has a $24 mm pre-tax impact on quarterly earnings. The NYMEX gas price for 3Q07 was $6.69 per
Slide 16: 4Q07 Chemical Segment Earnings Outlook
We expect 4Q07 Chemical segment earnings to be in the range of $100 to $140 million. Decline (vs. 3Q07) reflects: Normal seasonal downturn; Continued weakening demand due to lower housing starts; Lower chloro-vinyl margins due to higher energy and ethylene costs. We expect 4Q07 chemical product pric
Slide 17: 4Q07 Tax Rate Outlook
Difficulty of predicting interim period tax rates is due to: Interim period rates are based on projected total year income and taxes; Oxy’s tax rate is sensitive to changes in oil and gas prices and foreign expensed exploration; Changes in oil prices have an inverse effect on income tax rates; Risin
Slide 18: Forward-Looking Statements and Non-GAAP Note
See the investor relations supplemental schedules for the reconciliation of non- GAAP items. Statements in this presentation that contain words such as "will", "expect" or "estimate", or otherwise relate to the future, are forward-looking and involve risks and uncertainties that could materially aff