Slide 1: Fourth Quarter 2011 Earnings Conference Call
EXHIBIT 99.4 Occidental Petroleum Corporation Fourth Quarter 2011 Earnings Conference Call January 25, 2012 1
Slide 2: Fourth Quarter 2011 Earnings - Highlights
Fourth Quarter 2011 Earnings - Highlights • Net Income - $1.6 Billion in 4Q11 vs. $1.2 Billion in 4Q10 – EPS $2.01 (diluted) vs. $1.49 in 4Q10. • Consolidated pre-tax income from continuing operations - $2.6 Billion in 4Q11 vs. $2.9 Billion in 3Q11 • 3Q11 EPS $2.18 (diluted after tax) – Major items
Slide 3: Oil & Gas Segment Variance Analysis - 4Q11 vs. 3Q11
Fourth Quarter 2011 Earnings - Oil & Gas Segment Variance Analysis - 4Q11 vs. 3Q11 • Core Results for 4Q11 of $2.537 B vs. $2.612 B in 3Q11 – Higher oil volumes and prices, were offset by higher operating costs, higher equity- based compensation costs, and higher exploration expense. ($ in millions)
Slide 4: Oil & Gas Segment
Fourth Quarter 2011 Earnings - Oil & Gas Segment 4Q11 3Q11 Reported Segment Earnings ($mm) $2,537 $2,612 WTI Oil Price ($/bbl) $94.06 $89.76 Brent Oil Price ($/bbl) $109.07 $112.22 NYMEX Gas Price ($/mcf) $3.68 $4.28 Oxy’s Realized Prices Worldwide Oil ($/bbl) $99.62 $97.24 + 2½% quarter-to-quarter
Slide 5: Oil & Gas Production
Fourth Quarter 2011 Earnings - Oil & Gas Production 4Q11 3Q11 Oil and Gas Production Volumes (mboe/d) 748 739 • Domestically, production was 449 mboe/d, representing the highest ever domestic production volumes for the company, compared to our guidance of 442 to 444 mboe/d. • Our production rose by
Slide 6: Oil & Gas Production
Fourth Quarter 2011 Earnings - Oil & Gas Production • Latin America volumes were 31 mboe/d. – Colombia volumes increased slightly from 3Q11 while both periods included pipeline interruptions caused by insurgent activity. • In the Middle East region: – We recorded 1 mboe/d production in Libya. – In I
Slide 7: Oil & Gas Segment - Realized Prices
Fourth Quarter 2011 Earnings - Oil & Gas Segment - Realized Prices • Realized oil prices for the quarter represented 106% of the average WTI and 91% of the average Brent price. • Realized NGL prices were 59% of WTI and realized domestic gas prices were 98% of NYMEX. • Price changes at current global
Slide 8: Oil & Gas Segment - Production Costs and Taxes
Fourth Quarter 2011 Earnings - Oil & Gas Segment - Production Costs and Taxes • 4Q11 operating costs were about $130 mm higher than 3Q11 as a result of higher workover and well maintenance activity driven by our program to increase production at these higher levels of oil prices. • Oil and gas cash
Slide 9: Chemical Segment Variance Analysis - 4Q11 vs. 3Q11
Fourth Quarter 2011 Earnings - Chemical Segment Variance Analysis - 4Q11 vs. 3Q11 • Core Results for 4Q11 were $144 mm vs. $245 mm in 3Q11. – The sequential drop in income was the result of seasonal factors. ($ in millions) *Power sold to the grid during Texas power shortage in 3Q11. 9
Slide 10: Midstream Segment Variance Analysis - 4Q11 vs. 3Q11
Fourth Quarter 2011 Earnings - Midstream Segment Variance Analysis - 4Q11 vs. 3Q11 • Core Results for 4Q11 were $70 mm vs. $77 mm in 3Q11. ($ in millions) 10
Slide 11: Taxes and Other
Fourth Quarter 2011 Earnings - Taxes and Other • The significantly higher year-end Oxy stock price, compared to the distressed levels at the end of 3Q11, affected the quarterly valuation of equity-based compensation plans reducing 4Q11 pre-tax income of the company, compared to 3Q11, by $80 mm. • Th
Slide 12: Full Year 2011 Results
Fourth Quarter 2011 Earnings - Full Year 2011 Results FY2011 FY2010 • Core Income ($mm) $6,828 $4,664 • Core EPS (diluted) $8.39 $5.72 • Net Income ($mm) $6,771 $4,530 • EPS (diluted) $8.32 $5.56 • Cash flow from operations for the twelve months of 2011 was $12.3 billion. 12 12
Slide 13: Full Year 2011 Cash Flow
Fourth Quarter 2011 Earnings - Full Year 2011 Cash Flow – Free cash flow from continuing operations after capex and dividends, but before acquisition and debt activity, was about $3.4 billion. ($ in millions) Cash Flow From Shah - $500 Operations $12,300 Beginning Cash $2,600 12/31/10 Note: See atta
Slide 14: One and Two Year Simplified Cash Flow
Fourth Quarter 2011 Earnings - One and Two Year Simplified Cash Flow One year cash flow 12/31/11 Two year cash flow 12/31/11 Total debt, Total debt, net of cash net of cash at 12/31/10 $2.5 B at 12/31/09 $1.6 B Total debt, Total debt, net of cash net of cash at 12/31/11 $2.1 B at 12/31/11 $2.1 B Net
Slide 15: 2011 Capital Expenditures
Fourth Quarter 2011 Earnings - 2011 Capital Expenditures • Capital expenditures for 2011 were approximately $7.5 billion, of which about $2.6 billion was incurred in 4Q11. • Higher 4Q11 capital partially reflected the gradual ramp-up of our program during 2011. – The increases were mostly at Willist
Slide 16: Net Acquisition Expenditures
Fourth Quarter 2011 Earnings - Net Acquisition Expenditures • Our net acquisition expenditures in the twelve months were $2.2 billion, which are net of proceeds from the sale of our Argentina operations. • The acquisitions included the South Texas purchase, properties in California, the Permian and
Slide 17: Shares Outstanding, Debt and ROE & ROCE
Fourth Quarter 2011 Earnings - Shares Outstanding, Debt and ROE & ROCE Shares Outstanding (mm) 2011 12/31/11 Weighted Average Basic 812.1 Weighted Average Diluted 812.9 Basic Shares Outstanding 810.5 Diluted Shares Outstanding 811.3 12/31/11 12/31/10 Debt/Capital 13% 14% • Our return on equity for 2
Slide 18: DD&A, Oil and Gas Operating Costs
Fourth Quarter 2011 Earnings - DD&A, Oil and Gas Operating Costs • Oil and Gas DD&A expense was $11.48 per BOE for 2011. • We expect the Oil and Gas segment DD&A rate to be about $14 per barrel in 2012. • The total Chemical and Midstream DD&A expense is expected to be about $650 million for 2012. •
Slide 19: Oxy's Three Main Performance Criteria
Oxy’s Three Main Performance Criteria - Production Growth, Strong Returns & Dividend Growth • We finished a strong year in terms of the three main performance criteria outlined last quarter. • Our domestic oil and gas production grew by about 12% for 2011 to 428 mboe/d. – 4Q11 domestic production of
Slide 20: Oxy's Three Main Performance Criteria
Oxy’s Three Main Performance Criteria - Production Growth, Strong Returns & Dividend Growth • We increased our annual dividends by $0.32 or by 21%, to $1.84 per share. • We expect to announce a further dividend increase after the meeting of our Board of Directors in the second week of February. 20 2
Slide 21: 2012 Capital Program
2012 Capital Program • We have ample legitimate opportunities in our domestic oil and gas business where we could deploy capital. • We have tried to manage the program to a level that is realistic at current price levels, and as a result, have deferred some projects that otherwise would have met our
Slide 22: Capital Program - 2012E vs. 2011 Actual
Capital Program - 2012E vs. 2011 Actual • We are increasing our capital program approximately 10% in 2012 to $8.3 billion from the $7.5 billion we spent in 2011. • About $500 million of this increase will be in the US, mainly in the Permian basin, and the rest in international projects including the
Slide 23: 2012 Capital Program - Domestic Oil & Gas and Related Midstream Projects
2012 Capital Program - Domestic Oil & Gas and Related Midstream Projects • In domestic oil gas and related • We currently expect the rig count to midstream projects, development remain constant in 1H12 at 31, the same capital will be about 55% of our as what we were running at YE-2011; total program
Slide 24: 2012 Capital Program - Domestic Oil & Gas and Related Midstream Projects
2012 Capital Program - Domestic Oil & Gas and Related Midstream Projects • In the Permian operations, we • Our rig count at year-end 2011 expect to spend about 20% of was 23; our total capital. • We expect our rig count to ramp up during the year to around 27 rigs by year end; • Our CO2 flood capita
Slide 25: 2012 Capital Program - Domestic Oil & Gas and Related Midstream Projects
2012 Capital Program - Domestic Oil & Gas and Related Midstream Projects • In the Midcontinent and other operations, we expect to spend around 14% of our total capital program. 2012E Total Capital - $8.3 Billion 25
Slide 26: 2012 Capital Program
2012 Capital Program - • Total international development capital will be about 30% of the total company capital program. • Exploration capital should increase about 10% over the 2011 spending levels and represent 6% of the total capital program. 26
Slide 27: Oil and Gas - 2012 Production Outlook
Fourth Quarter 2011 Earnings - Oil and Gas - 2012 Production Outlook • As we look ahead to 2012, we expect oil and gas production to be as follows: – In 1H12, we expect our domestic production to grow 3 to 4 mboe/d each month from the current quarterly average of 449 mboe/d, which would correspond t
Slide 28: Oil and Gas - 2012 Production Outlook
Fourth Quarter 2011 Earnings - Oil and Gas - 2012 Production Outlook • The Middle East region production is expected to be as follows for 1H12: – Production has resumed in our operations in Libya, and at this point, we expect about 5 mboe/d production, with further growth to come later in the year.
Slide 29: 1Q12 Outlook - Oil and Gas
Fourth Quarter 2011 Earnings - 1Q12 Outlook - Oil and Gas • At current prices, we expect total 1Q12 sales volumes to be comparable to 4Q11 volumes, depending on the scheduling of liftings. • A $5.00 change in global oil prices would impact our PSC daily volumes by about 3 mboe/d. • We expect explora
Slide 30: 1Q12 Outlook - Chemicals & Taxes
Fourth Quarter 2011 Earnings - 1Q12 Outlook - Chemicals & Taxes • The chemical segment 1Q12 earnings are expected to be about $165 mm with seasonal demand improvement expected in the second and third quarters. – We expect that lower natural gas prices and the continuing improvement in the global eco
Slide 31: Summary
Fourth Quarter 2011 Earnings - Summary • To summarize: We closed out 2011 on a solid note, with record high domestic oil and gas production in 4Q11, which was also ahead of our guidance. • We continued to generate strong financial returns well above our cost of capital. • We enter this year raising
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Slide 33: Free Cash Flow Reconciliation to GAAP
Occidental Petroleum Corporation Free Cash Flow Reconciliation to Generally Accepted Accounting Principles (GAAP) ($ Millions) Twelve Months 2011 Consolidated Statement of Cash Flows Cash flow from operating activities 12,281 Cash flow from investing activities (9,903) Cash flow from financing activ
Slide 34: Return on Capital Employed (ROCE) Reconciliation to GAAP
Occidental Petroleum Corporation Return on Capital Employed (ROCE) Reconciliation to Generally Accepted Accounting Principles (GAAP) 2010 2011 RETURN ON CAPITAL EMPLOYED (%) 13.2 17.2 GAAP measure - net income attributable 4,530 6,771 to common stock Interest expense 93 284 Tax effect of interest ex