Occidental Petroleum Corporation · NYSE:OXY
Occidental Petroleum — Barclays Americas Select Franchise Conference (May 2018)
18 slides from Occidental Petroleum's conference presentation, May 15, 2018
Slide 1: Barclays Americas Select Franchise Conference – Occidental Petroleum
Barclays Americas Select Franchise Conference Occidental Petroleum May 15, 2018 Cedric Burgher Chief Financial Officer
Slide 2: Cautionary Statements
Cautionary Statements Forward-Looking Statements This presentation contains forward-looking statements based on management’s current expectations relating to Occidental’s operations, liquidity, cash flows, results of operations and business prospects. Words such as “estimate,” “project,” “predict,”
Slide 3: High Quality Assets Provide a Sustainable Value Proposition
Occidental Petroleum Corporation (Oxy) is a returns High Quality Assets Provide a focused energy company with operations in the Sustainable Value Proposition United States, Middle East and Latin America Oil & Gas Focused in world leading O&G basins Oil and Gas (O&G) Core Areas1 Large scale and l
Slide 4: Oxy's Unique Value Proposition
Oxy’s Unique Value Proposition Returns Focused Growth Consistent Dividend Growth ROCE Leadership > Growing dividend with an attractive yield > Value protection in down cycle > Promotes capital allocation discipline Growth within Cash Flow Returns Focused Growth > 5% – 8+% average production growth i
Slide 5: Delivering Consistent Annual Dividend Growth
Delivering Consistent Annual Dividend Growth 2002 – 2017: Oxy dividend CAGR 12% vs S&P CAGR 7.5% ($/share) $29.52 Annual Dividends Paid $28.00 $26.44 Cumulative Dividends Paid $24.00 $23.38 $20.36 $20.00 $17.39 $16.00 $14.51 $11.95 $12.00 $9.79 $7.95 $8.00 $6.48 $5.17 $3.96 $4.00 $2.22 $3.02 $2.88 $
Slide 6: Short and Long-term Executive Compensation Changes
Short and Long-term Executive Compensation Changes Expanded use of returns-based metrics for incentive compensation Short-term Incentives Long-term Incentives 25% of CEO long-term incentive 15% of CEO annual bonus1 is compensation is determined by determined by CROCE2, with a CROCE, with a performan
Slide 7: Cash Flow Breakeven at Low Oil Prices Achieved in 3Q18
Cash Flow Breakeven at Low Oil Prices Achieved in 3Q18 Cash Flow Breakeven at $50: 6.0 Dividend + 5% – 8% Production Growth $5.7 $5.7 Growth 5.0 Cash Flow Neutral at $40: Capital Operating Cash Flow ($ Bn) Dividend with Flat Production $1.0 $4.5 $4.5 $4.3 Actual $4.2 ~$120 MM per $1 $4.1 4.0 Change
Slide 8: Exceeding Cash Flow Expectations
Exceeding Cash Flow Expectations Midstream Chemicals Permian EOR Market and operational improvements: Market improvements: Market and operational improvements: • Mid to Gulf Coast Differentials • Improved Caustic Soda pricing • Production increased 6% • Export Margin • Improved PVC pricing • Oil pri
Slide 9: Shaping Oxy's Competitive Advantage
Shaping Oxy’s Competitive Advantage Permian Execution Excellence Subsurface Technical Basin-leading Enhanced Recovery Excellence Wells Operational New Mexico D&C Efficiency & Speed Outperformance Product Transport Logistics & Strategic Aventine & Realizations Relationships Logistics Hub Infrastructu
Slide 10: Undeveloped Drilling Locations
Permian Resources Undeveloped Inventory Unconventional Inventory Depth 14,000 • 1.4 MM net Permian 11,9961 12,000 11,207 11,650 Unconventional acres Undeveloped Drilling Locations Midland 10,000 Basin • ~325,000 net acres Texas associated with 11,207 Delaware wells in unconventional 8,000 Basin deve
Slide 11: Subsurface Technical Excellence – Basin-leading Wells
Subsurface Technical Excellence – Basin-leading Wells Sustainable Step Change in Well Results from 2H17 into 1Q18 Productivity 2H17 & 1Q18 Wells – Peak 30D Production Rates1 • 1Q18 & 2H17 Peak 30D ~3,100 Boed1 Wolfcamp XY 5 Wells ~7,100' 3,622 Oil (Bod) • 2 successful appraisal wells in Red Tank fie
Slide 12: Successful Drilling and A&D Programs Leading to Lower F&D Costs
Successful Drilling and A&D Programs Leading to Lower F&D Costs F&D Costs (All Sources)1 $17.96 $17.22 2017 Program Execution Highlights $8.53 > Positive total-company performance revisions > Improved productivity and lower well 5 Year 3 Year 2017 costs in Permian Resources > Purchased ~80 MM Boe mo
Slide 13: Logistics & Strategic Relationships – Aventine Logistics Hub
Logistics & Strategic Relationships – Aventine Logistics Hub Secure Supply • 240 acres in Eddy County, NM within 20 miles of Greater Sand Dunes and other future development areas • 30,000 tons of sand storage + transload capacity • 2 unit train loops with ability to expand to 3 located off major rai
Slide 14: Production Transport & Realizations – Ample Takeaway
Production Transport & Realizations – Ample Takeaway Committed Oil & Gas Takeaway Ensures Products are Realized in Multiple Markets > Multi-year firm oil commitments on New Mexico four, third-party pipelines • Total capacity ~470 Mbod to Gulf Coast Texas • Retain flexibility on third-party volumes g
Slide 15: Enhanced Oil Recovery (EOR) – CCUS Leadership
Enhanced Oil Global EOR Scale, Position & Capability Recovery (EOR) – > Permian Basin – CO2 EOR 34 CO2 Floods; 70 Waterfloods CCUS Leadership Inject 2.4 Bcfd of CO2 > Colombia Sequestered ~800,000 MT of Leadership in CO2 > Qatar Anthropogenic CO2 in 2017 EOR provides long- 2+ Bboe of Remaini
Slide 16: Permian CO2 EOR – Occidental is a Global Leader in EOR
Permian CO2 EOR Occidental is a Global Leader in EOR 3,500 U.S. EOR Projects Oxy’s Permian EOR Position 3,000 OXY 2,500 • 40+ Years of EOR Expertise # of Injectors 2,000 • Reservoir Quality 1,500 1,000 Other U.S. EOR Operators • Subsurface Capability 500 • CO2 Supply 0 0 10 20 30 40 Size of bubble i
Slide 17: Driving the New Oxy Into the Future
Driving the New Oxy Into the Future Returns Focused Growth ROCE Leadership Growth within Cash Flow Robust, Low-Cost Inventory Industry-leading Decline Rate Executive Compensation Aligned 17
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