Occidental Petroleum Corporation · NYSE:OXY
Occidental Petroleum — Q1 2021 Earnings Presentation
39 slides from Occidental Petroleum's earnings presentation, May 11, 2021
Slide 1: First Quarter Earnings Conference Call
First Quarter Earnings Conference Call Occidental Petroleum Corporation May 11, 2021
Slide 2: Cautionary Statements
Cautionary Statements 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 (“Occi
Slide 3: First Quarter Highlights; Financial Results and Guidance
Occidental • • First Quarter Highlights Financial Results and Guidance 3
Slide 4: First Quarter 2021 Highlights
First Quarter 2021 Highlights $1.6 B $0.5 B $0.5 B Free Cash Flow Divestitures Balance Sheet Generation Closed Improvement Highest Quarterly Non-Core Minerals Debt Reduction and Free Cash Flow WES Units Cash Preservation Since 2011 Note: See the reconciliations to comparable GAAP financial measures
Slide 5: Best-in-Class Capital Intensity
Best-in-Class Capital Intensity $2.9 B of Capital Stabilizes Full Year Production at ~1,140 Mboed Leading Capital Intensity: Continues to Improve • World-class assets with low breakevens and subsurface expertise to maximize value • Efficient execution accelerates time-to-market and lowers cost per w
Slide 6: Divestiture Progress
Divestiture Progress 11 10 9 $8.7 B Completed $350 MM $285 MM $200 MM $2-3 B Cumulative Asset Sales ($ B) 8 $700 MM $1.3 B 7 $2.4 B 6 $260 MM $565 MM $90 MM $70 MM 5 $750 MM $200 MM $3.3 B 4 3 Remaining Divestitures $5.5 B 2 2020 Divestitures 1 $650 MM 2019 Divestitures 0 Plains Mozambique Midland N
Slide 7: Continuing to Deliver
Continuing to Deliver Delivering On Milestones Achieved Next Steps Balance sheet ✓ Extended $7 B of near-term improvement debt maturities ➢ Ongoing balance sheet ✓ $9.6 B of debt repaid improvement through organic free cash flow generation and ✓ 2021 overhead of $1.8 billion1 divestiture proceeds Co
Slide 8: Capital allocation priorities
Cash Flow Maintain Production Base Current Focus Priorities Debt Reduction Near-term, excess cash flow and divestiture proceeds Sustainable Dividend Medium to be allocated to Term debt reduction Dividend increases Growth Capital and growth capital to follow substantial reduction in debt Repurchase S
Slide 9: Financial Results and Guidance
Occidental • First Quarter Highlights • Financial Results and Guidance 9
Slide 10: First Quarter 2021 Results
First Quarter 2021 Results Reported Reported Production versus Guidance Midpoint Mboed Reconciliation Adjusted EPS $(0.15) Gulf of Mexico: improved well performance and +11 lower than expected downtime Reported diluted EPS $(0.36) Rockies: accelerated time to market, better +8 uptime, and higher non
Slide 11: Second Quarter & Full-Year 2021 Guidance Estimates
Second Quarter & Full-Year 2021 Guidance Estimates Oil & Gas OxyChem Corporate 2Q21 Production 2Q21 Pre-tax income: ~$300 MM FY 2021 Domestic tax rate: 22% • Total Company: 1,140 – 1,170 Mboed FY 2021 Pre-tax income: $950 - $1,050 MM FY 2021 International tax rate: 45% • Permian: 490 – 500 Mboed Mid
Slide 12: Appendix
Appendix • 2021 Activity • Financial Information • Oil and Gas Update • Asset Overview • Environment, Social, and Governance • WES 12
Slide 13: 2021 Activity – Domestic Onshore Assets
2021 Activity – Domestic Onshore Assets Permian Rockies 2Q – 4Q Activity 2Q – 4Q Activity $1.0 B ~10 Gross ~4 Net 140 – 160 $0.3 B ~2 Gross ~2 Net 100 – 120 Capex Rigs Rigs Wells Online Appraisal Capex Rigs Rigs Wells Online 100% 100% Powder Base Maint OBO River Basin Base Maint OBO OBO Facilities O
Slide 14: International & Gulf of Mexico Milestones
International & Gulf of Mexico Milestones 2021 2022 2023 • Lucius, N Hadrian, Holstein • Caesar-Tonga (CT), Lucius • HMW (3 wells), Lucius • Fiesta, Cactus • CTSSE online • Exploration wells, Yellowfin • Horn Mountain West (HMW) umbilical, • Exploration wells GOM riser, platform mods • CTSSE, SS pum
Slide 15: Appendix
Appendix • 2021 Activity • Financial Information • Oil and Gas Update • Asset Overview • Environment, Social, and Governance • WES 15
Slide 16: OxyChem: Market Leading Position
OxyChem: Market Leading Position OxyChem at a Glance Earnings Highlights • Major global exporter of all core products • Positive cash flow generation • Top tier global producer in every product produced throughout cycle > Largest merchant caustic soda seller in the world • Integrated assets capture
Slide 17: 2021 Capital Plan
2021 Capital Plan $2.9 B Capital Program by Asset Capital Program by Type Facilities 23% $0.1 Midstream & Marketing $0.2 Exploration & Corporate D,C&E 56% $0.3 Oil & Gas $0.3 OxyChem Base Maintenance 10% $0.4 GoM Exploration 6% OBO & Other 5% International $0.4 Rockies & Other Capital Program Highli
Slide 18: Midstream & Marketing Guidance Reconciliation
Midstream & Marketing Guidance Reconciliation 1Q21 Guide 1Q21 Act 2Q21 Guide Physical Midstream Business $100 • 1Q21 income lower due to higher energy costs impacting Domestic gas processing plants related to winter $50 storm Uri. Expected 2Q21 improvement primarily relates to Dolphin and Al Hosn re
Slide 19: Cash Flow Sensitivities
Cash Flow Sensitivities Oil & Gas Midstream & Marketing OxyChem • Annualized cash flow changes • Annualized cash flow changes • Annualized cash flow changes ~$215 MM per $1.00 / bbl ~$65 MM per $0.25 / bbl ~$30 MM per $10 / ton change change in oil prices change in Midland to MEH in realized caustic
Slide 20: 2021 Natural Gas Hedges
2021 Natural Gas Hedges Two-Way Costless Collar Secures Natural Gas Price Floor of Short Call $2.50 For 630 MMcfd $4.00 $3.61 630 MMcfd Hedge Details $3.50 Summary 2021 Long Put $2.50 2021 Settlement Realized Price ($/Mcf) $3.00 Natural Gas collar (millions of MMBtu) 154.4 Average price per MMBtu (N
Slide 21: Appendix
Appendix • 2021 Activity • Financial Information • Oil and Gas Update • Asset Overview • Environment, Social, and Governance • WES 21
Slide 22: Leading Delaware Basin Well Performance
Leading Delaware Basin Well Performance 6 Month Cumulative Oil Top 100 Wells1 12 Month Cumulative Oil Top 100 Wells2 Oxy’s subsurface expertise delivers Basin leading wells for less cost: Oxy has 36% of the best wells, while completing less than 8% of Competitors use 19% more proppant: ~$500 M total
Slide 23: Appendix
Appendix • 2021 Activity • Financial Information • Oil and Gas Update • Asset Overview • Environment, Social, and Governance • WES 23
Slide 24: Oxy's Combined Integrated Portfolio
Oxy’s Combined Integrated Portfolio Oil & Gas OxyChem Oxy Midstream Focused in world class Leading manufacturer of Integrated infrastructure and basins with a history of basic chemicals and marketing provides access to maximizing recovery significant cash generator global markets Rockies 39 1.1 MMbo
Slide 25: One of the Largest U.S. Acreage Holders
One of the Largest U.S. Acreage Holders 9.5 MM Net Total U.S. Acres Rockies Permian 1.2 MM Acres 2.9 MM Acres Powder River Basin – 0.4 MM Permian Unconventional – 1.5 MM DJ Basin – 0.8 MM Excludes acreage outside of active operating Permian Conventional – 1.4 MM areas Other Onshore Gulf of Mexico 4.
Slide 26: U.S. Onshore Overview
U.S. Onshore Overview Rockies Permian 1.2 MM Acres 2.9 MM Acres 1Q21 Net Production Oil NGLs Gas Total (Mbod) (Mbbld) (MMcfd) (Mboed) Permian 271 97 531 457 Rockies & Other Dmstc. 92 92 673 296 Total 363 189 1,204 753 Note: Acreage amounts presented on this slide are net acres 26
Slide 27: Gulf of Mexico Overview
Gulf of Mexico Overview Gulf of Mexico 0.8 MM Acres MARLIN HORN MOUNTAIN 1Q21 Net Production NANSEN HOLSTEIN BOOMVANG CONSTITUTION Oil (Mbod) 125 CAESAR/TONGA MARCO POLO GUNNISON NGLs (Mbbld) 11 HEIDELBERG LUCIUS Gas (MMcfd) 90 Total (Mboed) 151 Note: Acreage amounts presented on this slide are net
Slide 28: International Overview
International Overview U.A.E. 2.5 MM Acres 1Q21 Net Production1 Oil NGLs Gas Total (Mbod) (Mbbld) (MMcfd) (Mboed) Algeria & Other Intl. 36 2 7 39 Al Hosn 10 18 174 57 Dolphin 6 8 146 38 Oman 64 - 89 79 Algeria Oman Total 116 28 416 213 0.5 MM Acres 6.0 MM Acres 1Excludes production from discontinued
Slide 29: Appendix
Appendix • 2021 Activity • Financial Information • Oil and Gas Update • Asset Overview • Environment, Social, and Governance • WES 29
Slide 30: Midland Basin Water Recycling Facility
Midland Basin Water Recycling Facility • Partnership with an industry-leading 3rd party water midstream company • Next generation produced water recycling facility • Supports all South Curtis Ranch development • Located in Midland Basin at South Curtis Ranch > 50,000 bwd capacity > 2,000,000 bbls of
Slide 31: New Mexico Water Recycling Program
New Mexico Water Recycling Program Water infrastructure drives value and environmental benefits New Mexico Recycled Water Usage1 100% • Continue to increase the percentage of 90% recycled water used in operations 80% Demonstrating water environmental 70% stewardship 60% • Partnership support with Ne
Slide 32: Decarbonizing Operations and Reducing GHG Emissions
Decarbonizing Operations and Reducing GHG Emissions 32
Slide 33: Oxy Low Carbon Ventures
Oxy Low Carbon Ventures MAJOR INITATIVES Oxy is using our long-standing, industry-leading 01 expertise in carbon management to lower our own CCUS Project Development emissions and accelerate a global low-carbon economy Commercializing new capture and use technologies, providing CCUS through: advisor
Slide 34: Pathway to Achieve Net-Zero
Pathway to Achieve Net-Zero 34
Slide 35: Producing a Lower Carbon Barrel of Oil
Producing a Lower Carbon Barrel of Oil First look at the world’s largest Direct Air Capture plant Oxy Low Carbon Ventures and the management team from Rusheen Capital formed development company 1PointFive 1PointFive licensed technology from Carbon Engineering to develop the DAC facilities Announced
Slide 36: Executive Compensation Program Policies and Practices
Executive CEO Target Direct Compensation Mix1 – 90% Variable/At Risk Compensation Program Policies and Practices • Pay for performance • Act on shareholder feedback • Emphasize stock ownership • Use relative and absolute 2021 Compensation Program Enhancements performance measures for What We Heard H
Slide 37: Appendix
Appendix • 2021 Activity • Financial Information • Oil and Gas Update • Asset Overview • Environment, Social, and Governance • WES 37
Slide 38: WES Operating as an Independent Company
WES Operating as an Independent Company Relationship at a Glance • Effective Dec. 2019, WES’s management team transferred from Oxy to WES; the remaining WES employees transferred in 2020 • Rights of WES unitholders to replace WES’s general partner were significantly expanded in 2020 • Oxy accounts f
Slide 39: Occidental
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