Occidental Petroleum Corporation · NYSE:OXY
Occidental Petroleum — Q4 2009 Earnings Presentation
21 slides from Occidental Petroleum's earnings presentation, Jan 28, 2010
Slide 1: Fourth Quarter 2009 Earnings Conference Call
Fourth Quarter 2009 Earnings Conference Call January 28, 2010
Slide 2: Fourth Quarter 2009 Earnings – Highlights
2 Fourth Quarter 2009 Earnings – Highlights • Core Results - $1.1 Billion vs. $957 Million in 4Q08 – Core EPS $1.30 (diluted) vs. $1.18 in 4Q08. • Net Income - $938 Million vs. $443 Million in 4Q08 – EPS $1.15 (diluted) vs. $0.55 in 4Q08. – 4Q09 net income includes after-tax non-core charges mostly
Slide 3: Oil & Gas Segment Variance Analysis – 4Q09 vs. 4Q08
3 Fourth Quarter 2009 Earnings – Oil & Gas Segment Variance Analysis – 4Q09 vs. 4Q08 • Core Results for 4Q09 of $1.8 B vs. $1.0 B in 4Q08 – The increase was due to higher crude oil prices and sales volumes and lower operating expenses. $83 $35 $47 $1,813 $746 ($ in millions) $996 4Q 08 Sales Price S
Slide 4: Oil & Gas Segment
4 Fourth Quarter 2009 Earnings – Oil & Gas Segment 4Q09 4Q08 Reported Segment Earnings ($ mm) $1,643 $339 WTI Oil Price ($/bbl) $76.19 $58.73 NYMEX Gas Price ($/mcf) $4.29 $6.97 Oxy’s Realized Prices Worldwide Oil ($/bbl) $69.39 $53.52 US Natural Gas ($/mcf) $4.37 $4.67
Slide 5: Oil & Gas Segment – Production
5 Fourth Quarter 2009 Earnings – Oil & Gas Segment – Production 4Q09 4Q08 • Oil and Gas Sales Volumes (mboe/d) 650 620 – + 4.8% year-over-year or 30 mboe/d. • Year-over-year sales volume increase includes: – + 23 mboe/d from Oman and Bahrain; – + 6 mboe/d from Argentina, and; – + 13 mboe/d from Cali
Slide 6: Oil & Gas Segment – Production
6 Fourth Quarter 2009 Earnings – Oil & Gas Segment – Production 4Q09 3Q09 • Oil and Gas Sales Volumes (mboe/d) 650 628 – + 3.5% quarter-over-quarter or 22 mboe/d. • Sequential sales volume increase includes: – Bahrain production and development activities began on 12/1/09; – Argentina volumes increa
Slide 7: Chemical Segment Variance Analysis – 4Q09 vs. 4Q08
7 Fourth Quarter 2009 Earnings – Chemical Segment Variance Analysis – 4Q09 vs. 4Q08 • Core Results for 4Q09 of $33 mm vs. $217 mm in 4Q08 – Reflects the continued weakness in most domestic markets, but in particular U.S. housing, durable goods and agricultural sectors. ($ in millions) $35 $288 $42 $
Slide 8: Midstream Segment Variance Analysis – 4Q09 vs. 4Q08
8 Fourth Quarter 2009 Earnings – Midstream Segment Variance Analysis – 4Q09 vs. 4Q08 • Core Results for 4Q09 of $81 mm vs. $170 mm in 4Q08 – The decrease was due to lower year-over-year margins in the marketing business, partially offset by improved NGL margins resulting from lower maintenance expen
Slide 9: Full Year 2009 Results
9 Fourth Quarter 2009 Earnings – Full Year 2009 Results YTD2009 YTD2008 • Net Income ($ mm) $2,915 $6,857 EPS (diluted) $3.58 $8.34 • Core Results ($ mm) $3,083 $7,348 EPS (diluted) $3.78 $8.94 • Oil and Gas Sales Volumes (mboe/d) 645 601 – +7.3% year-over-year • Oil and gas cash production costs, e
Slide 10: Full Year 2009 Cash Flow
10 Fourth Quarter 2009 Earnings – Full Year 2009 Cash Flow $7,600 $3,600 ($ in millions) Cash Flow From Operations $5,800 $1,750 $1,065 $40 $5 $1,230 Beginning Debt Cash Issuance $1,800 $740 12/31/08 Debt Reduction $700 Available Capex Acquisitions Dividends Net Debt Other Ending Cash Cash & Foreign
Slide 11: Shares Outstanding, Debt and Returns
11 Fourth Quarter 2009 Earnings – Shares Outstanding, Debt and Returns Shares Outstanding (mm) 2009 12/31/09 Weighted Average Basic 811.3 Weighted Average Diluted 813.8 Basic Shares Outstanding 812.0 Diluted Shares Outstanding 814.4 2009 Debt/Capital 9% ROE 10.3% ROCE 9.6%
Slide 12: 2010 Reporting Changes
12 Fourth Quarter 2009 Earnings – 2010 Reporting Changes • Beginning in 2010, we are making three reporting changes which will impact comparability between years. • #1 — Historically, our production volumes have been reported as a mix of pre-tax and after tax volumes while our revenues have reflecte
Slide 13: 2010 Reporting Changes
13 Fourth Quarter 2009 Earnings – 2010 Reporting Changes • #2 — We have combined most of our gas production in the mid-continental regions of the US into a single business unit called Midcontinent Gas. – This was done in order to take advantage of common development methods and production optimizati
Slide 14: 2010 Reporting Changes – Capitalized CO2
14 Fourth Quarter 2009 Earnings – 2010 Reporting Changes • #3 — Capitalized CO2 – Oxy's policy regarding tertiary recovery is to capitalize costs, such as CO2, when they support development of proved reserves and generally expense these costs when they support current production. – In 2009, we capit
Slide 15: 1Q10 Outlook
15 Fourth Quarter 2009 Earnings – 1Q10 Outlook • We expect oil and gas sales volumes to increase from the reformatted 4Q09 amount of 722 mboe/d to about 730 to 740 mboe/d in 1Q10 at about current oil prices. – Production increases will come from California, Bahrain and Oman. • Commodity Price Sensit
Slide 16: 1Q10 Outlook
16 Fourth Quarter 2009 Earnings – 1Q10 Outlook • For the Chemical segment: – The international markets remain solid; – In the U.S., we have a competitive advantage against foreign products; however, the housing and construction markets remain weak, which will limit improvement in sales volumes and m
Slide 17: 2010 Capital Spending and DD&A
17 Fourth Quarter 2009 Earnings – 2010 Capital Spending and DD&A • We expect capital spending for the total year of 2010 to be about $4.3 billion. – Our capital program will continue to focus on ensuring that our returns remain well above our cost of capital. – The additional capital from 2009's $3.
Slide 18: California Exploration
18 Fourth Quarter 2009 Earnings – California Exploration • Excluding the Kern County discovery: – Over the course of a couple of years, we have drilled 39 exploration wells seeking non- traditional hydrocarbon bearing zones in California. – Of these wells, 12 are commercial and 10 are currently bein
Slide 19: California Exploration – Kern County Discovery
19 Fourth Quarter 2009 Earnings – California Exploration – Kern County Discovery KERN COUNTY DISCOVERY AREA The discovery, which is near Elk Hills, is not below any producing zones. 4Q09 3Q09 2Q09 1Q09 Gross Production* – Natural Gas (mmcf/d) 145 105 74 28 – Liquids (mb/d) 7.5 8.5 5 3 – Total mboe/d
Slide 20: California Exploration – Kern County Discovery
20 Fourth Quarter 2009 Earnings – California Exploration – Kern County Discovery Sacramento Valley • Cumulative gross production Sacramento since the start of production through 12/31/09 has been 19.4 bcf of gas and 1.5 mm barrels of San Francisco liquids; San Joaquin Valley • We expect to drill 8 w
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