Slide 1: Second Quarter 2007 Earnings Conference Call
Second Quarter 2007 Earnings Conference Call July 24, 2007
Slide 2: Second Quarter 2007 Earnings - Highlights
Reported Net Income - $1.412 Billion Reported EPS $1.68 (diluted) Reported Net Income includes: $419 mm A-T gains ($0.50 per diluted share) from sale of non-core assets: $181 mm from sale of 18.6 mm shares of Lyondell (remaining 2.4 mm shares were sold in early July). $116 mm from sale of Pakistan a
Slide 3: Oil & Gas Segment Variance Analysis - 2Q07 vs. 2Q06
Results for 2Q07 of $1.656 Billion - 11% year-over-year ($ in millions) $1,857 2Q 06 $66 Sales Price $45 Sales Volume/Mix $43 Exploration Expense $137 All Others* $1,656 2Q 07 *All Others includes: DD&A increase ($46 mm), Operating and overhead cost increase ($37 mm), Russia 2006 income ($19 mm), an
Slide 4: Oil & Gas Segment
2Q07 2Q06 Reported Segment Earnings ($ mm) *$1,682 $1,857 WTI Oil Price ($/bbl) $65.05 $70.70 NYMEX Gas Price ($/mcf) $7.56 $7.26 Oxy’s Realized Prices Worldwide Oil ($/bbl) $59.11 $61.66 US Natural Gas ($/mcf) $7.07 $6.23 *Includes gain from sale of domestic mineral interests ($23 mm) and litigatio
Slide 5: Oil & Gas Segment: Production
2Q07 2Q06 Oil and Gas Production (mboe/day) 583 609 - 4% year-over-year Production for both quarters includes volumes of Horn Mountain & Pakistan. Oil and Gas Production (mboe/day) 558 551 (Excluding Horn Mountain, Pakistan, and Russia) + 1% year-over-year Production lower than earlier guidance due
Slide 6: Oil & Gas Segment: Exploration Expense
2Q07 2Q06 Exploration Expense ($ mm) $93 $50 Increase came from Middle East/North Africa. Oil and Gas operating costs were $12.30 per boe in 1H07 vs. $11.70 per boe in 2006. Increase due to higher field operating and maintenance expenses. Oil & Gas Segment
Slide 7: Chemical Segment Variance Analysis - 2Q07 vs. 2Q06
Earnings for 2Q07 of $158 Million - 37% year-over-year, and in line with previous guidance. Primary factor accounting for quarter-to-quarter difference was lower chloro-vinyl margins. ($ in millions) $251 2Q 06 $73 Sales Price $5 Sales Volume/Mix $11 Operations/ Manufacturing $14 All Others $158 2Q
Slide 8: Six Months Results
YTD2007 YTD2006 Net Income ($ mm) $2,624 $2,091 EPS (diluted) $3.11 $2.42 2007 results include: 2Q07 asset sales gains $412 mm A-T gain from sale of Russian investment $112 mm A-T gain for litigation settlements $107 mm A-T charge for cash tender of debt $30 mm A-T provision for plant closure Oil an
Slide 9: Six Months Results: Capital Spending and Cash Flow
YTD2007 YTD2006 Capital Spending ($ mm) $1,630 $1,230 Net Interest Expense ($ mm) $8 $62 Cash Flow from Operations ($ mm) $2,900 $3,100 ROE * 26% 24% ROCE * 24% 21% * Annualized (see attached Excel file for GAAP reconciliation) Six Months Results
Slide 10: Cash Flow YTD2007
($ in millions) $4,480 Available Cash $1,140 Asset Sale Proceeds $1,600 Capex $500 Acquisitions $1,100 Debt Reduction $370 Dividends $550 Share Repurchase $5 Other $1,505 Ending Cash Balance Cash Flow YTD2007 Cash Flow From Operations $2,900 Beginning Cash $1,580
Slide 11: Share Repurchase
Spent $550 million to repurchase 11.2 million shares YTD 2007 at an average price of $49.84 a share. 15 million shares remain under the current 55 million share repurchase authorization. Shares Outstanding (mm) YTD07 6/30/07 Weighted Average Basic 839.3 Weighted Average Diluted 843.2 Basic Shares Ou
Slide 12: 3Q07 Outlook
We expect 3Q07 Oil and Gas production of 585 to 590 mboe/day. Increase vs. 2Q07 includes: 17 mboe/day from Dolphin. 7 mboe/day from the Permian assets acquired in the BP swap. 4 mboe/day from the announced acquisition of Qatar assets from Anadarko. Sale of Pakistan and swap of Horn Mountain will red
Slide 13: 3Q07 Production Outlook
(mboe/day) 583 2Q07 Production 16 Pakistan Sold 9 Horn Mountain Swap 17 Dolphin 7 Permian Acquisition 4 Qatar Acquisition 1 Other 587 3Q07 Production 3Q07 Production Outlook
Slide 14: 2007 Production Outlook
We expect Oil and Gas production 2007 year-end exit rate of 630 to 650 mboe/day. Increase vs. 2Q07 includes: 47 to 65 mboe/day from Dolphin . 7 mboe/day from the Permian assets acquired in the BP swap . 6 mboe/day from the announced acquisition of Qatar assets from Anadarko . 2007 Production Outlook
Slide 15: 2007 Production Outlook
(mboe/day) 583 2Q07 Production 16 Pakistan Sold 9 Horn Mountain Swap 47 - - 65 Dolphin 7 Permian Acquisition 6 Qatar Acquisition 12 Growth 650 2007 Production Exit Rate Dolphin Variance 2007 Production Outlook
Slide 16: 3Q07 Outlook: Commodity Price Sensitivity
Commodity Price Sensitivity A $1.00 per barrel change in oil prices impacts oil and gas quarterly earnings by about $40 million (pre-tax). A change of 50-cents per million BTUs in gas prices has a $24 million impact on quarterly earnings (pre-tax). The NYMEX gas price for 2Q07 was $7.56 per mcf. Exp
Slide 17: 3Q07 Outlook
We expect 3Q07 Chemical earnings to be in the range of $160 to $175 million compared to $158 million in 2Q07. Interest expense of about $12 million in 3Q07. The increase vs. 2Q07 reflects the loss of capitalized interest on the Dolphin Project. Expect our worldwide tax rate in 3Q07 to increase to ab
Slide 18: Non-GAAP Reconciliation and Forward-Looking Statements
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