Occidental Petroleum Corporation · NYSE:OXY
Occidental Petroleum — Investor Presentation (June 2017)
78 slides from Occidental Petroleum's investor presentation, Jun 19, 2017
Slide 1: June 2017 Investor Presentation
June 2017 Investor Presentation Occidental Petroleum Corporation As of June 19, 2017
Slide 2: Investor Relations contacts
Richard A. Jackson Vice President - Investor Relations 713-215-7235 | [email protected] Anthony J. Cottone Senior Director - Investor Relations 212-603-8188 | [email protected]
Slide 3: Cautionary Statements
Cautionary Statements Forward-Looking Statements Portions of this presentation contain forward-looking statements and involve risks and uncertainties that could materially affect expected results of operations, liquidity, cash flows and business prospects. Actual results may differ from anticipated
Slide 4: Table of Contents
Table of Contents • Transactions Announced June 19, 2017 • Company Overview and Value Proposition • Driving Value in the Permian • Journey to Digital Transformation • Appendix 4
Slide 5: Opportunistic Transactions Create Long-term Value
Opportunistic Transactions Create Long-term Value Consistent with our pathway to breakeven at $50 WTI*, Oxy has executed multiple transactions in the Permian to accelerate our plan. > Oxy has agreed to a number of purchase and sale transactions in Permian Resources to generate combined proceeds of $
Slide 6: Overview of Non-Strategic Permian Resources Net Transactions
Overview of Non-Strategic Permian Resources Net Transactions •Transactions Terms Permian Resources Acreage Permian EOR Acreage > Combined net proceeds of ~$0.6 Bn •Properties Description > Divested of non-strategic acreage in Andrews, Martin and Pecos Counties and added incremental acreage to Midlan
Slide 7: Overview of Enhanced Oil Recovery Acquisition in the Permian
Overview of Enhanced Oil Recovery Acquisition in the Permian •Transactions Terms Permian Resources Acreage Permian EOR Acreage > Purchase price of $0.6 Bn CO2 Source Fields and Pipelines •Properties Description • Bravo Dome Unit WI from 77% to 87% • West Bravo Dome WI from 0% to Seminole-San Andres
Slide 8: Upside Potential from Operatorship of Seminole-San Andres
Upside Potential from Operatorship of Seminole-San Andres •Value Improvement Through Scale and Operating Costs ($/Boe) $30 Operational Synergies $25 High Opex Range Seminole-San Oxy EOR unit of > Seminole-San Andres unit becomes Oxy’s largest Andres unit analogous scale and $20 operated CO2 flood in
Slide 9: Transactions Effectively a Swap with Net Benefits to Oxy
Transactions Effectively a Swap with Net Benefits to Oxy Transactions on a net basis*: Remaining 2017 2019 Production (Boed) 3,500 7,000 Operating Cash Flow ($ MM) 35 80 Free Cash Flow ($ MM) 25 55 > Lowers our sustaining capital and overall production decline rate > Additional benefits anticipated
Slide 10: Table of Contents
Table of Contents • Transactions Announced June 19, 2017 • Company Overview and Value Proposition • Driving Value in the Permian • Journey to Digital Transformation • Appendix 10
Slide 11: Oxy's Unique Value Proposition
Oxy’s Unique Consistent Dividend Growth Value • Growing dividend with strong yield Proposition • Value protection in down cycle Upside in rising oil • Promotes capital allocation discipline price environment and downside Moderate Value-Based Growth protection during • 5 – 8% average production growt
Slide 12: Delivering Consistent Annual Dividend Growth
Delivering Consistent Annual Dividend Growth 2002 – 2016: Oxy dividend CAGR 13.7% vs S&P CAGR 7% ($/share) $28.00 Annual Dividends Paid $26.42 $24.00 Cumulative Dividends Paid $23.38 $20.36 $20.00 $17.39 $16.00 $14.51 $11.95 $12.00 $9.79 $7.95 $8.00 $6.48 $5.16 $3.96 $4.00 $2.22 $3.02 $2.56 $2.88 $2
Slide 13: Current Dividend Yield vs. Competitors
Current Dividend Yield vs. Competitors 6.0% Dividend yield should revert close to historical levels as we 5.2% execute plan to a lower cash flow breakeven 5.0% 5.0% 4.1% 4.0% 3.8% 3.0% 2002 – 2016 Average Oxy Dividend Yield 2.2% 2.3% 2.0% 2.1% 2.1% 2.0% 1.5% 1.0% 0.7% 0.7% 0.4% 0.0% 0.0% PXD APC DVN
Slide 14: Cash Flow Priorities Favor Dividends
Cash Flow Priorities 1. Base/Maintenance Capital Favor Dividends 2. Dividends Dividends promote 3. Growth Capital capital allocation Subject to Returns and discipline 4. Acquisitions Market Conditions 5. Share Repurchases 14
Slide 15: Value Growth - Annual ROCE for Oxy vs. Average of Competitors
Value Growth - Annual ROCE for Oxy vs. Average of Competitors 30% 20% 10% 00% (10%) (20%) (30%) 2008 2009 2010 2011 2012 2013 2014 2015 2016 OXY ROCE Competitors ROCE* *Competitors ROCE represents a simple average of APA, APC, COP, CVX, DVN, EOG, HES, MRO and XOM 15
Slide 16: Value Growth - 2016 ROCE
Value Growth 2016 ROCE* 10% Focus on value driven growth - Top quartile returns 0% Positioned to return to double digit (10%) returns (20%) (30%) HES DVN CXO APC MRO APA EOG COP PXD OXY CVX XOM *Calculated based on public information and on a consistent basis Companies listed alphabetically : APA, A
Slide 17: Value Growth - Multi-year Returns Focused Portfolio Optimization
Value Growth - Multi-year Returns Focused Portfolio Optimization Set to generate both returns to shareholders and value-based growth Divested assets that did not generate competitive Investing in assets with higher cash margin and corporate returns or free cash flow lower capital intensity Lower rel
Slide 18: Value Growth - Production Growth Since 2013
Value Growth - Production Growth Since 2013 Ongoing Total Company Production CAGR 10%* 700 600 575 Permian 528 Resources 500 428 440 25% CAGR 400 Mboed 300 200 100 0 2013 2014 2015 2016 Ongoing Company Excluding Permian Resources Permian Resources *Pro forma for ongoing operations (excludes operatio
Slide 19: Value Growth – Significantly Reduced Development Cost
Value Growth – Significantly Reduced Development Cost 2016 F&D (Organic) $/Boe 20 19.27 17.19 15 13.37 11.73 11.41 $/Boe 10 9.59 6.86 6.51 6.45 5 0 1 2 3 4 5 6 7 8 OXY Competitor Peers* *Competitor Peers include APC, CVX, CXO, DVN, EOG, HES, MRO, PXD. Excludes APA, COP, XOM due to negative F&D. 19
Slide 20: Strong Balance Sheet – Debt-to-Capital
Strong Balance Sheet – Debt-to-Capital 60.0% 49% 50.0% 47% 40.0% 37% 35% 30.0% 26% 27% 24% 20% 20% 20.0% 18% 2002 – 2016 Average Oxy Debt-to-Capital 10.0% 3% 0.0% PXD XOM HES CVX MRO EOG OXY APC COP APA DVN Source: Factset, 05/26/17 Independent E&P Integrated O&G 20
Slide 21: Strong Balance Sheet – Oxy Credit Ratings Vs. Peers
Strong Balance Sheet – Oxy Credit Ratings Vs. Peers Company S&P S&P Moody’s Moody’s New Issue Ratings Outlook Ratings Outlook Indications (10-year) XOM AA+ Negative Aaa Negative 2.95% CVX AA- Negative Aa2 Stable 3.05% OXY A Stable A3 Stable 3.25% EOG BBB+ Stable Baa1 Stable 3.35% COP A- Stable Baa2
Slide 22: Successful Value Proposition
Successful Consistent Dividend Growth Value • Oxy dividend CAGR more than doubled S&P CAGR since 2002 Proposition • Highest yield vs. US peers • Historical dividend yield of 2.85% Oxy has delivered Moderate Value-Based Growth positive results on • Averaged better than 5% production growth each compo
Slide 23: Unique Investment Proposition
Unique Investment Proposition Large Integrated Majors Independent E&Ps Company Market Cap ($Bn) Company Market Cap ($Bn) Oxy XOM $346 COP $56 Uniquely RDS $226 EOG $53 Positioned CVX $198 APC $29 TOT $118 PXD $29 BP $93 DVN $19 ENI $52 APA $18 Characteristics Characteristics • Low or no growth • Gen
Slide 24: Occidental Petroleum
Occidental Petroleum • Value Proposition • Quality Assets • Differentiated Value Based Approach 24
Slide 25: Focused Businesses with Scale
Focused Oil and Gas Core Areas Businesses with 66% Oil │ 13% NGL │ 21% Gas Scale United States Oil & Gas • Leading position in the Permian Basin High-return, low decline, • Permian Resources is a growth driver long life, moderate growth, • Permian EOR is stable, low-decline low-cost inventory with f
Slide 26: Longest Legacy International Operations: Colombia and Oman
Longest Legacy International Operations: Colombia and Oman Colombia: Discovered giant Cano Limon field in the early 1980’s. Several contracts that currently range from 6 years up to the economic life of field. Long term contracts with upside potential Oman: Assisted with the discovery and started Om
Slide 27: Additional Core Middle East Assets
Additional Core Middle East Assets ISND and ISSD: Offshore development in Qatar. ISND contract for 25 years initiated in 1994. ISSD contract expires in 2022. Dolphin: Premier transborder pipeline delivering gas from Qatar to Abu Dhabi and Oman. Agreement was initiated in 2007 for a 25 year term. Al
Slide 28: Largest Operator in the Permian
Largest Operator in the Permian 400 Liquids Gas 350 PERMIAN BASIN NET MBOEPD Advantages Through Scale OPERATED PRODUCTION* 300 250 • 10,000 mi2 3D seismic 200 • 130,000 mi2 2D seismic 150 • ~10,000 gross OBO wells • 250 OBO wells since 2015 100 50 - SHELL EOG OXY LPI KMI CWEI CVX PXD APA CXO XOM XEC
Slide 29: Permian Resources
Permian Net Resources Business Area Acreage Acres* • Resources – Unconventional Areas 1.4 • Enhanced Oil Recovery Areas 1.1 Significant acreage Oxy Permian Total 2.5MM & growth potential in all development Net areas Resources Basin Development Areas Acres* • NM Delaware Basin 290,000 ~650,000 net ac
Slide 30: Increased Total Horizontal Drilling Locations ~37%
Improved Permian Resources Horizontal Increased Total Horizontal Drilling Locations ~37% Inventory from 4Q2015 Locations within 300,000 of 650,000 net acres in Basin Development Areas • Added 1,250 12,000 ~11,650 ~11,650 locations BE < $50 Midland Basin 2016 • Added 3,150 total 10,000 Added 3,150 lo
Slide 31: Permian EOR: Proven Leader in Maximizing Recovery
Permian EOR Proven Leader in Maximizing Recovery Across the Permian Significant inventory in 10-year plan Permian EOR Net Resource Potential MMBOE Geographically diverse 2,000 100 active CO2 + water floods High- covering multiple horizons gradable 1,500 Inventory 2 BBOE of identified net Midland Bas
Slide 32: OxyChem Generates Industry Leading Chemicals Margins
OxyChem Generates Industry Leading Chemicals Margins EBITDA Margin 30.0% 25.0% 24% 23% 20% 20% 20.0% 15% 15.0% 14% 10.0% 5.0% 0.0% OxyChem Peer 1 Peer 2 1Q 2017 2015 – 2016 FY Average 32
Slide 33: Midstream: Improving Cash Flows and Market Access
Midstream: Improving Cash Flows and Market Access Businesses 2017 Impact Gas Plants: Natural gas and CO2 gathering, • Free cash flow expected to improve $150 - compression and processing systems to $200+ MM due to better marketing economics control upstream costs and ramp up of Ingleside oil storage
Slide 34: Occidental Petroleum
Occidental Petroleum • Value Proposition • Quality Assets • Differentiated Value Based Approach 34
Slide 35: Our Pathway to Cashflow Breakeven: Dividend + Growth
Our Pathway to Cashflow Breakeven: Dividend + Growth Executing a plan to fund a growing dividend and 5% – 8% growth at $50 WTI. Pathway: Milestones: > Grow high margin production with low > 80 Mboed of production growth capital intensity > Ample options to self-fund growth > Continue to invest in lo
Slide 36: Oxy Pathway to Cash Flow Breakeven at $50 WTI
Oxy Pathway to Cash Flow Breakeven at $50 WTI 6.0 $5.6 $5.6 Operating Cash Flow ($ Bn) 5.0 $4.7 Sustaining $4.4 $4.2 and 4.0 Growth Pathway Drivers: Capital $3.3 3.0 • Permian Resources high-margin growth to $50/bbl accelerate value proposition of consistent dividend plus moderate production growth
Slide 37: Asset Quality and Capital Flexibility Provides Optionality to Cover Dividend
Asset Quality and Capital Flexibility Provides Optionality to Cover Dividend Upon plan execution, Oxy can fund dividend and sustain production from operating cash flows. WTI Oil Price: Annual cash flow sensitivities (Bn) $40 $50 $60 Dividend ex- Dividend + Dividend + Cash Flow Priorities: Growth Gro
Slide 38: Differentiated Value-Based Approach
Differentiated Creating shareholder value over the long-term Value-Based Approach • Culture of innovative technology and process – Subsurface characterization • More Oil – Integrated development planning – Oxy Drilling Dynamics • Less Cost – Innovative facility designs – Long-term base management –
Slide 39: SL2 Technology Is Key To Further Cost Reduction
SL2 Technology Is Key To Further Cost Reduction SL2 Potentially Lowers Secondary Bench BE by $5: > Lowers well cost by $0.5 - $1.0MM > Reduces operating costs by over 50% > Sequencing increases facilities utilization > One artificial lift system saves $0.2MM per lateral Project Timeline: > Project c
Slide 40: Value Chain Partnerships Lower Costs; Logistic & Maintenance Hub
Logistic & Maintenance Hub Value Chain Partnerships Lower Costs Underway • Secures supply availability Service company yard OCTG Laydown Yard • $500 – $750k savings per well • • Maintenance Stimulation & Cement • • ~20 railcar spots Dedicated truck entry/exit • Service directional tools • Staging, r
Slide 41: Occidental Petroleum
Occidental • Value Proposition: We’ve done what we said we would do and will repeat that success Petroleum • Quality Assets: Recent portfolio upgrade • Value Proposition provides highest quality assets in the industry and they are designed to support a strong • Quality Assets dividend with value gro
Slide 42: Table of Contents
Table of Contents • Transactions Announced June 19, 2017 • Company Overview and Value Proposition • Driving Value in the Permian • Journey to Digital Transformation • Appendix 42
Slide 43: Permian Basin Key Takeaways
Permian Basin Key Takeaways • 2.5 million net acres in the Permian Basin > 650,000 net acres within the Delaware and Midland basins • Increased unconventional horizontal drilling locations by 37% to 11,650 > Average lateral length up 20% to ~7,100 ft > Locations with breakeven < $50 WTI up over 100%
Slide 44: Oxy Permian Business Overview
Net Operated 2016 Net Oxy Permian Business Overview Acres Wells* Production Mboed Oxy Permian • Resources – Unconventional Areas 1.4 5,150 124 • Enhanced Oil Recovery Areas 1.1 19,310 145 Oxy Permian Total 2.5MM 24,460 269 • Largest operated position in the Permian Permian Basin Industry Production
Slide 45: The Permian Drives Oxy's Value Proposition
The Permian Drives Oxy’s Value Proposition Permian Resources Permian EOR Improving top tier margins with recent operational Permian EOR provides stable, free cash flow with and technical breakthroughs. minimal base decline. ~11,650 Undeveloped Drilling Locations ~2B Bbls Identified Undeveloped Resou
Slide 46: Diversified Portfolio Provides High-Return and Significant Flexibility
Diversified Portfolio Provides High-Return and Significant Flexibility Asset Portfolio Role Upside Potential Southeast New High return, low capital intensity Acreage improvement for longer Mexico for near-term growth and cash laterals and facilities optimization recycle for multi-bench bench develop
Slide 47: Maximize Value of Portfolio - Low Capital Intensity Drives Value
Maximize Value of Portfolio - Low Capital Intensity Drives Value Multi-Year Permian Resources All-In Capital Intensity 2015 / 2016 $54 MM 300 STX Sale Re-invested 11 – 13 rigs 15 20 < $30MM 2017 $33 MM 250 at exit Annual Wedge 2018 $29 MM Production (Mboed) 14 15 Rig Count 200 30% CAGR $ per Mboed**
Slide 48: Greater Sand Dunes Value Based Development Increases Returns
Greater Sand Dunes Value Based Development Increases Returns • Currently three play leading Three high-return development benches benches under development 300 Current* 3rd Bone Spring Cumulative Mboe 4,500 250 > Modular development 200 Current* 2nd Bone Spring ft Laterals > Area appraisal continues
Slide 49: Greater Barilla Draw Value Based Development Increases Returns
Greater Barilla Draw Value Based Development Increases Returns • Red Bull South Active and Wolfcamp B Improvement = frac optimization to drive results Improving 150 > 2 rigs currently operating 125 100 Cumulative Mboe Oxy WC B 7,500ft Fracs > 3 wells drilled and 3 wells online since acquisition date
Slide 50: Midland Basin - Merchant Value Based Development Increases Returns
Midland Basin - Merchant Value Based Development Increases Returns Wolfcamp B Improvement = two high return development benches • Currently two play leading benches under development 175 Cumulative Oil - Mbo 150 All WC A Wells > Landing point optimized flow units 125 New WC B Design 100 > Wolfcamp B
Slide 51: Outstanding Results in Greater Sand Dunes Area Multi-Bench Development
Outstanding Results in Greater Sand Dunes Area Multi-Bench Development Recent Well Results Barilla DrawDunes Greater Sand Type Log Target Formation Lateral Peak 24 Hr Peak 30 Day Well Name Oil (%) Length (ft) (boed) (boed) Brushy Canyon Federal 23 13H 4,376 899 833 90% Avalon James 29 38H 4,730 1,13
Slide 52: Improving Results in Greater Barilla Draw Area Multi-Bench Development
Improving Results in Greater Barilla Draw Area Multi-Bench Development Recent Well Results Barilla DrawDraw Greater Barilla Type Log 228 Wells Across 8 Benches – Drilled Target Formation Lateral Peak 24 Hr Peak 30 Day Oil Well Name Length (ft) (boed) (boed) (%) Avalon Evaluating 1st Bone Spring Eval
Slide 53: Permian Resources Non-Operated Assets
2015+ Non‐Operated Activity Permian Resources Non-Operated New Mexico NW Shelf Assets Midland Basin NM Delaware • Significant OBO Basin Central Basin position delivers Greater Sand Dunes Platform ~13% of domestic TX Delaware Basin production • Leveraged to deliver high returns, Greater Barilla Draw
Slide 54: Subsurface Characterization Adds Value
Subsurface Characterization Landing + Stimulation + Spacing Optimization Adds Value 2nd Bone Spring Net Sand Thickness and Middle Carbonate Outline Middle Carb. • Problem: Subsurface uncertainties & Outline A A’ unknowns to predict resource potential > Sweet spots > Frac barriers > Landing zones • S
Slide 55: Customized Stimulation Design and Landing Selection
Subsurface Characterization Customized Stimulation Design and Adds Value Landing Selection • Problem: Subsurface discontinuity A 2nd Bone Landing and Frac Optimization A’ differentiates stimulation impacts > Oil left behind > Frac interference > Landing zones • Solutions: Customized subsurface stimu
Slide 56: Development Planning Adds Value
Development Planning Adds Value Development Units – Greater Sand Dunes • Problem: Potential destruction of future value as a result of unknowns > Multi-bench potential 4 > Frac barriers 3 3 > Productivity drivers 4 > External timing constraints 3 3 • Solutions: Modular field development 1 1 1 plans
Slide 57: Oxy Drilling Dynamics Adds Value
Oxy Drilling Dynamics Step Changing Performance Adds Value Identify Understand Engineer Implement • Problem: Inefficient use of rig energy resulting in slow and higher cost drilling Real Time Monitoring from Anywhere > Downhole tool failures R e-Engineer BHA* > Wellbore quality • Solutions: Oxy Dril
Slide 58: Integrated Planning Adds Value
Integrated Planning Adds Rig Release to Well Online Value 140 • Problem: Delay in production and 120 cash flows due to complex operations and planning 100 Days > Multiple unaligned schedules 80 • Solutions: Implemented Integrated 60 Master Schedule 40 Expected 2017 range with > Optimized sequence of
Slide 59: Surveillance and Base Management Adds Value
Surveillance and Base Management Adds Value 2016 Permian Resources Base Optimization • Oxy operates 24,460 wells in the Permian 10.0 Basin Cumulative Net MBOEPD 8.0 • Company operated production of 235 Mboepd 6.0 Net (EOR and Unconventional) 4.0 • Long-term operability is critical 2.0 > Well design
Slide 60: 2016 Accomplishments in EOR Business and 2017 Capital Outlook
2016 Accomplishments in EOR Business 2017 Capital Outlook Opex Reduction Capital Efficiency $25 CO2 Floods / Expansions 17% Reduction 2014-2016 12% Reduction Y/Y 600 - $195MM $20 500 $/BOE $15 400 TZ / ROZ Projects 300 - $50MM $MM $10 200 $5 100 Gas Processing Capacity 0 $0 2016 Target 2016 Actual -
Slide 61: Table of Contents
Table of Contents • Transactions Announced June 19, 2017 • Company Overview and Value Proposition • Driving Value in the Permian • Journey to Digital Transformation • Appendix 61
Slide 62: Our Journey to Digital Transformation
Our Journey to Digital Transformation Production Optimization Consolidated ERP Systems • Institutionalized Processes • Integration of operational, technical and Tools and financial data • Single reporting repository • Global Supply Chain • Focus on analysis and • Single Chart of Accounts decision ma
Slide 63: Capturing and Executing Innovative Ideas
Capturing and Executing Innovative Ideas Oxy’s Innovation Process Current Innovation Pipeline Statistics and Results A flexible system that flows, changes form in real time, and seeks the most natural path to its destination. 10 7 63
Slide 64: Data Science – Going Beyond Interesting
Data Science – Going Beyond Interesting Data Collection & Profiling Insight & Recommendations Computational Methods Key Levers University Partnerships Optimization Data & Analytics Domain Expertise O&G Industry Oxy & Industry Expertise • Numerical and stochastic Research • Data Preparation & Tagging
Slide 65: Driving Value @ the Bit
Driving Value @ Bit Algorithm @ the Bit • Predicts bit location using physics +machine Projection Distance learning @Bit + @Target • Calculates dogleg severity, build/turn rate, motor yield • $325K avg. per rig savings • Vendor performance metrics @ Target Algorithm • Increase in rate of penetration
Slide 66: Driving Value @ the Reservoir
Driving Value @ the Observation Well Injection Well Vent Well Reservoir Target=$100MM Field decisions that Steam/Water/CO2 optimize daily total field production • Leverage field data and new data sources Temp, Press Injection • Optimize over larger areas Producing Well Production Injection Well Data
Slide 67: Driving Value @ the Well
Driving Value Lift System Diagnostic/Optimization @ the Well • Leverages artificial intelligence and pattern recognition • Increase run life • Proprietary deviated well algorithms based on • Earlier detection of failures mechanical engineering+applied mathematics • Improve staff efficiency, quality
Slide 68: Driving Value @ Field Development
Driving Value @ Field Development Multivariate Modelling • Augments, validates and • Predictive, interactive multivariate statistical model that predicts quickens existing practices geologic sweet spot areas and compares completion practices and cost • Interactive framework that factors improves as
Slide 69: The Possibilities Are Endless… Digital Foundational Capabilities
The Possibilities Are Endless… Retention & Risk Management Field Development Identifying Organization Issues Where to Drill Risk Management Capital Optimization Lease Management Analytics Production HES Workforce Management Identifying Key Players & Future Reservoir Characterization Prediction of Su
Slide 70: Table of Contents
Table of Contents • Transactions Announced June 19, 2017 • Company Overview and Value Proposition • Driving Value in the Permian • Journey to Digital Transformation • Appendix 70
Slide 71: 2Q17 and FY 2017 Guidance Summary
2Q17 and FY 2017 Guidance Summary Oil & Gas Segment DD&A – FY 2017E • Oil & Gas: ~$15.00 / boe • FY 2017E Total Production • Chemicals and Midstream: $685 MM > 595,000 – 615,000 boed > Permian Resources production of 140,000 – 150,000 boed Midstream • 2Q17E Production • $5 – $15 MM pre-tax income in
Slide 72: Cash Flow Improvements Expected in 2017
Cash Flow Improvements Expected in 2017 •Improved product prices > Annualized cash flow changes ~$100 million for a ~$1.00 / barrel change in oil prices > Annualized cash flow changes ~$45 million for a ~$0.50 / Mmbtu change in natural gas prices •Improved chemicals performance > Annualized cash flo
Slide 73: Permian Resources Results and Guidance
Permian Resources Results and Guidance • Total production grew 5% from Q4 16 to 129 Mboed > Oil production up 7% from Q4 16 to 78 Mbod Oil NGL Gas 140 - 150 135 - 140 • Increased activity in 1Q 2017 129 124 > Exited Q1 with 7 rigs 110 > 21 wells online in 1Q17 vs. 16 in 4Q16 > Added 5 top tier perfo
Slide 74: Pathway to Cash Flow Breakeven at $50 WTI – Chemicals Drivers
Our Pathway to Cash Flow Breakeven at $50 WTI – Chemicals Drivers 6.0 $5.6 $5.6 Operating Cash Flow ($ Bn) 5.0 $4.7 Sustaining $4.4 $4.2 +$0.20 and 4.0 Growth Chemicals Drivers: Capital $3.3 3.0 • Full-year benefit of current basic chemicals $50/bbl pricing environment 2.0 • Full-year benefit of Eth
Slide 75: Pathway to Cash Flow Breakeven at $50 Oil – Midstream Drivers
Our Pathway to Cash Flow Breakeven at $50 Oil – Midstream Drivers 6.0 $5.6 $5.6 Operating Cash Flow ($ Bn) 5.0 $4.7 Sustaining $4.4 +$0.3 $4.2 and 4.0 Growth Midstream & Marketing Drivers: Capital $3.3 3.0 • Improved Midland to Gulf Coast differentials $50/bbl • Al Hosn Midstream improvement 2.0 Cur
Slide 76: Pathway to Cash Flow Breakeven at $50 Oil – Oil & Gas Drivers
Our Pathway to Cash Flow Breakeven at $50 Oil – Oil & Gas Drivers 6.0 $5.6 $5.6 +$0.9 Operating Cash Flow ($ Bn) 5.0 $4.7 Sustaining $4.4 $4.2 and 4.0 Growth Oil & Gas Drivers: Capital $3.3 3.0 • Over 2,500 locations with NPV10 breakevens under $50 WTI $50/bbl • Cash margins of $30 per barrel 2.0 Cu
Slide 77: Reducing Domestic Opex Through High Margin Growth Barrels
Reducing Domestic Opex Through High Margin Growth Barrels Asset Area Opex Ranges Domestic Production Mix Permian Resources $2 - $4 Growth Opex / boe Growth Legacy Flat EOR Permian Resources $5 - $20 Legacy Opex / boe 2017 2018+ Total Domestic Opex / boe ~$14/boe Permian EOR $15 - $20 Opex / boe 2017
Slide 78: Basic Chemical Market Dynamics Are Shifting
Basic Chemical Market Dynamics Are Shifting Spot Domestic Caustic Soda Price* North American Chlor-Alkali Capacity Share * Low end of price range as reported by IHS $450 $400 Rest of $350 Industry Olin 23% 35% $300 $250 Westlake 18% $200 OxyChem 24% • Caustic soda prices reversed their multi-year •
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