Occidental Petroleum Corporation · NYSE:OXY
Occidental Petroleum — Enercom Presentation 2019
21 slides from Occidental Petroleum's conference presentation, Aug 12, 2019
Slide 1: Enercom Presentation
August 2019 Enercom Presentation Cedric Burgher, Chief Financial Officer Occidental Petroleum Corporation
Slide 2: Cautionary Statements
Cautionary Statements Forward-Looking Statements This presentation contains “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to statements about Occidental Petroleum Corporation’s (“Occi
Slide 3: Positioned To Be The Innovative and Sustainable Energy Leader
Positioned To Be The Innovative and Sustainable Energy Leader Technical Leader in Shale, CO2 Enhanced Oil Recovery, and Low Carbon Business Low Cost Leader through Large Scale Portfolio of Complementary Assets Return of Capital Leader with World Class People, Assets, and Innovation 3
Slide 4: 2018 Return On Capital and Return Of Capital
2018 Return On Capital and Return Of Capital 20% Returned $3.6 B to shareholders in 2018, including $1.3 B of share repurchases 15% OXY Since 2002, returned $34 B of Total Capital through 1Q19 Sector leading returns, achieved 14% ROCE 10% and 27% CROCE in 20182 ROCE (%) 5% 0% -5% 0% 2% 4% 6% 8
Slide 5: Oxy Consistently Returns Capital to Shareholders
Oxy Consistently Returns Capital to Shareholders Over $34 B of Total Capital Returned Since 2002 5,000 $3.50 Dividend Sustainable Long-term at $40 WTI 4,500 Consecutive Dividend Growth Since 2002 - 11% CAGR1 $3.00 4,000 Over 90% of Market Capitalization Returned to Shareholders $ MM Returned t
Slide 6: Timeline for APC Acquisition
Timeline for APC Acquisition APC Accepts CVX Initial Offer Increased Offer to Expressed CVX Offer $65/Share Offer $61.22/Share $76/Share Continued Interest, $64/Share Rejects Oxy All Stock 50% Cash Rejected by APC 25% Cash $76/Share Offer Sept 2017 Jan 2018 Dec 2018 Feb 2019 Apr 12, 2019 BRK $10 B;
Slide 7: Anadarko Acquisition – Sources of Financing
Anadarko Acquisition – Sources of Financing Weighted Average Cash Yield Less than 5% Cash Cost $B Yield Term Loans1 $8.8 3.0% Bonds Issued1 $13.0 3.1% Berkshire Preferred $10.0 8.0% Total Cash Cost $31.8 4.6% Other Consideration $B Oxy Equity2 $7.4 APC Debt (Assumed)3 $10.7 WES Debt (Consolidated)3
Slide 8: 2020 Oil Hedges
2020 Oil Hedges Three-Way Costless Collar Objectives Hedging Program Reduces 2020 Breakeven to $80 Short Call $74.09 Low $40 WTI range $75 $70 Hedged 300 Mbod with Three-Way Costless $65 Short Put $45 Long Put Collars $55 Maintain Upside Exposure Realized Price ($/bbl) $60 $55 $50 Details Summ
Slide 9: Amplifies and Strengthens Our Value Proposition
Amplifies and Strengthens Our Value Proposition Expected Metrics for Combined Company 2x FCF after dividend vs prior 2022 plan1 2021 FCF yield of 12%2 2x cash flow upside to oil price with breakeven at $40 WTI Expands cash margin ~10% by lowering cost3 +10 B Boe of resource acquired at ~$2
Slide 10: Oxy’s Combined Integrated Portfolio
Oxy’s Combined Integrated Portfolio Oil & Gas OxyChem Midstream Focused in world class Leading manufacturer of Integrated infrastructure and basins with a history of basic chemicals and marketing provides access to maximizing recovery significant cash generator global markets 1.3 MMboed1 Rockies Com
Slide 11: Premier, Complementary Global Asset Portfolio
Premier, Complementary Global Asset Portfolio #1 Producer in the Permian #4 Producer in Gulf of Mexico #1 in CO2 EOR Projects Leading Position in Colombia #1 Producer in the DJ Basin Top 3 Producer of PVC, Chlorine, and Caustic Soda #1 Producer in the Uinta Basin Leadin
Slide 12: Significant Identified Synergies with Potential Upside
Significant Identified Synergies with Potential Upside Expected Pre-Tax Annual Synergies and Capital Reduction ($ B) $1.5 $3.5 Capital Synergies: $0.9 B $0.9 Opex/G&A Synergies: $1.1 B $0.6 Capital Reduction: $1.5 B $0.5 Permian Capital and Opex Savings Procurement & Supply Chain General Overhead &
Slide 13: Excess Cash Generation Above Breakeven
Excess Cash Generation Above Breakeven $8 2021 Excess Cash Generation After Dividend1 Production Growth 5% Capex $6.6 B $6 Production Growth 5% $B $4 Capex $6.6 B Production Growth 5% $2 Capex $6.6 B Flat Production Capex $3.9 B $- $40 $50 $60 $70 WTI Breakeven maintained at $40 WTI with $3.9 B su
Slide 14: Delaware Basin – Synergistic Assets
Delaware Basin – Synergistic Assets Oxy is competitively advantaged with experience in Oxy Aventine - Maintenance and Logistics Hub Delaware Basin geology and regional supply logistics • Anadarko’s acreage is located in the middle of Oxy’s Greater Sand Dunes core development areas and on trend with
Slide 15: Leading Delaware Basin Operator
Leading Delaware Basin Operator 6 Month Cumulative Oil Top 100 2018 Wells1 12 Month Cumulative Oil Top 100 2018 Wells2 Oxy’s subsurface expertise delivers Basin leading wells Oxy has 20%+ of the best wells, while only drilling 7% of for less cost: total Delaware Basin wells Competitors 30 use 28% mo
Slide 16: Oxy’s Play Leading Delaware Basin Performance
Oxy’s Play Leading Delaware Basin Performance Average 6 Month Cumulative Oil by Operator • Oxy’s Subsurface Knowledge, Data Analytics and 160 Execution Drive Basin Leading Results 140 • Top Delaware Basin Operator 120 > Highest 6 month cumulative oil production in the 100 Delaware Basin Cumulative M
Slide 17: Basin Leading Improvement in Permian Resources Hz Unconventional Well Performance
Basin Leading Improvement in Permian Resources Hz Unconventional Well Performance Well Performance 90 Day Cum Improvement 180 Day Cum Improvement • 4D Frac Modeling +220% from 2015 to 2019 +147% from 2015 to 2018 250 +22% from 2018 to 2019 +25% from 2017 to 2018 • Seismic and Geomechanical 2
Slide 18: Measures of Success Milestones 2019
Measures of Success Milestones 2019 Divest $10 - 15+ B • Advance close of Africa asset sale and Midland Basin JV assets • Continue to execute deleveraging strategy • Launch procurement and supply chain optimization Capture $2+ B annual • Capital and operation efficiencies cost synergies • Streamline
Slide 19: Measures of Success Milestones 2020+
Measures of Success Milestones 2020+ Divest $10 - 15+ B • Complete non-core asset divestitures assets • SG&A optimization Capture $2+ B annual • Merge Oxy’s distinctive operational expertise with differentiating APC cost synergies practices for full synergy capture • Returns-based capital allocation
Slide 20: Innovative and Sustainable Energy Leadership
Innovative and Sustainable Energy Leadership The New Oxy has greatly enhanced cash generating capability through commodity cycles Low Cost Portfolio Increasing Return of Capital Complementary and low risk portfolio Cash flow growth provides increased providing stable cash flow shareholder distri
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