Occidental Petroleum Corporation · NYSE:OXY
Occidental Petroleum — Q2 2009 Earnings Presentation
20 slides from Occidental Petroleum's earnings presentation, Jul 23, 2009
Slide 1: Second Quarter 2009 Earnings Conference Call
Second Quarter 2009 Earnings Conference Call July 23, 2009
Slide 2: Second Quarter 2009 Earnings – Highlights
2 Second Quarter 2009 Earnings – Highlights • Core Results - $689 Million vs. $2.3 Billion in 2Q08 – Core EPS $0.85 (diluted) vs. $2.78 in 2Q08. • Net Income - $682 Million vs. $2.3 Billion in 2Q08 – EPS $0.84 (diluted) vs. $2.78 in 2Q08.
Slide 3: Oil & Gas Segment Variance Analysis – 2Q09 vs. 2Q08
3 Second Quarter 2009 Earnings – Oil & Gas Segment Variance Analysis – 2Q09 vs. 2Q08 • Core Results for 2Q09 of $1.1 B vs. $3.8 B in 2Q08 – Decrease due to lower crude oil and natural gas prices and higher DD&A rates, partially offset by higher sales volume and lower operating expenses. $3,806 $2,87
Slide 4: Oil & Gas Segment
4 Second Quarter 2009 Earnings – Oil & Gas Segment 2Q09 2Q08 Reported Segment Earnings ($ mm) $1,083 $3,806 WTI Oil Price ($/bbl) $59.62 $123.98 NYMEX Gas Price ($/mcf) $3.83 $10.43 Oxy’s Realized Prices Worldwide Oil ($/bbl) $52.97 $110.12 US Natural Gas ($/mcf) $2.87 $9.99
Slide 5: Oil & Gas Segment
5 Second Quarter 2009 Earnings – Oil & Gas Segment 2Q09 2Q08 • Oil and Gas Sales Volumes (mboe/d) 649 588 – + 10.4% year-over-year • Year-over-year sales volume increase includes: – + 20 mboe/d from Dolphin; – + 18 mboe/d from Argentina; – + 17 mboe/d from Oman, and; – + 12 mboe/d from domestic oper
Slide 6: Oil & Gas Segment
6 Second Quarter 2009 Earnings – Oil & Gas Segment • The Argentina increase includes: – + 8 mboe/d from new production coming on line; – the effect of a 15 mboe/d production loss due to a strike in 2Q08, and; – partially offset by a 5 mboe/d loss from a strike in June 2009. • Dolphin’s increase refl
Slide 7: Oil & Gas Segment – Cash Production Costs and Taxes
7 Second Quarter 2009 Earnings – Oil & Gas Segment – Cash Production Costs and Taxes • Oil and gas cash production costs, excluding production and property taxes, were $10.32 per boe in 1H09. – This represents a 15% decline from 2008 full-year costs of $12.13 per boe. • Oil and gas cash production c
Slide 8: Chemical Segment Variance Analysis – 2Q09 vs. 2Q08
8 Second Quarter 2009 Earnings – Chemical Segment Variance Analysis – 2Q09 vs. 2Q08 • Core Results for 2Q09 of $115 mm vs. $144 mm in 2Q08 – Better than our guidance of $100 mm due to higher than expected chlorine pricing. ($ in millions) $280 $152 $155 $144 $2 $115 2Q 08 Operations/ Sales Price Sal
Slide 9: Midstream Segment Variance Analysis – 2Q09 vs. 2Q08
9 Second Quarter 2009 Earnings – Midstream Segment Variance Analysis – 2Q09 vs. 2Q08 • Core Results for 2Q09 of $63 mm vs. $161 mm in 2Q08 – Decline due to lower NGL realized prices in the gas processing business, lower earnings in crude oil marketing and reduced margins in the power generation busi
Slide 10: Effective Tax Rate
10 Second Quarter 2009 Earnings – Effective Tax Rate • Worldwide effective tax rate was 40% in 2Q09 vs. our guidance of 43%; – Decrease in rate reflects a higher proportion of expected total year domestic source pre-tax income.
Slide 11: Six Months Results
11 Second Quarter 2009 Earnings – Six Months Results YTD2009 YTD2008 • Net Income ($ mm) $1,050 $4,143 • EPS (diluted) $1.29 $5.00 • Oil and Gas Sales Volumes (mboe/d) 651 598 – +9% year-over-year • Capital spending was $831 million in 2Q09 and $1.9 billion during 1H09. – We currently anticipate ful
Slide 12: Cash Flow 2009 YTD
12 Second Quarter 2009 Earnings – Cash Flow 2009 YTD $4,000 $1,900 ($ in millions) Cash Flow From Operations $2,200 $500 $740 $20 $1,800 $520 Beginning Cash $1,800 12/31/08 Available Capex Acquisitions Dividends Debt Other Ending Cash Cash & Signing Issuance Balance Bonuses 6/30/09
Slide 13: Shares Outstanding
13 Second Quarter 2009 Earnings – Shares Outstanding Shares Outstanding (mm) YTD09 6/30/09 Weighted Average Basic 810.8 Weighted Average Diluted 813.7 Basic Shares Outstanding 811.1 Diluted Shares Outstanding 813.9
Slide 14: 3Q09 Outlook
14 Second Quarter 2009 Earnings – 3Q09 Outlook • We expect 3Q09 oil and gas sales volumes to be similar to 2Q09, at about current oil prices. – This volume range reflects decreases from Midcontinent/Rockies due to natural declines and Dolphin due to its production sharing contract, offset by increas
Slide 15: 3Q09 Outlook
15 Second Quarter 2009 Earnings – 3Q09 Outlook • For the Chemical segment, the second half of 2009 looks exceptionally weak. – The weakness in caustic soda is not being offset by chlorine price increases, resulting in declining margins; – The fourth quarter is traditionally the weakest for this busi
Slide 16: California Exploration
16 Second Quarter 2009 Earnings – California Exploration • Excluding the Kern County discovery: – Over the course of little over a year, we have drilled 34 exploration wells seeking non-traditional hydrocarbon bearing zones in California. – Of these wells, 9 are commercial and 16 are currently being
Slide 17: California Exploration – Kern County Discovery
17 Second Quarter 2009 Earnings – California Exploration – Kern County Discovery KERN COUNTY DISCOVERY AREA • Oxy believes there are between 150 mm and 250 mm gross barrels of oil equivalent reserves within the outlined area where we have drilled 6 wells to date. • Oxy’s interest in the discovery ar
Slide 18: California Exploration – Kern County Discovery
18 Second Quarter 2009 Earnings – California Exploration – Kern County Discovery KERN COUNTY DISCOVERY AREA 2Q09 1Q09 Gross Production* – Natural Gas (mmcf/d) 74 28 – Liquids (mb/d) 5 3 – Total mboe/d 17.3 7.7 Number of producing wells 6 4 Conventional Primary Production 9 9 *Production as of each o
Slide 19: California Exploration – Kern County Discovery
19 Second Quarter 2009 Earnings – California Exploration – Kern County Discovery • In the Kern County discovery area: – We expect to drill an additional 17 wells during 2009; – The wells in this area cost about $3.5 to $4.0 million to drill and complete and have payout periods of less than six month
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