Occidental Petroleum Corporation · NYSE:OXY
Occidental Petroleum — Q1 2010 Earnings Presentation
18 slides from Occidental Petroleum's earnings presentation, Apr 29, 2010
Slide 1: First Quarter 2010 Earnings Conference Call
First Quarter 2010 Earnings Conference Call April 29, 2010
Slide 2: First Quarter 2010 Earnings – Highlights
2 First Quarter 2010 Earnings – Highlights • Core Results - $1.1 Billion vs. $407 Million in 1Q09 – Core EPS $1.32 (diluted) vs. $0.50 in 1Q09. • Net Income - $1.1 Billion vs. $368 Million in 1Q09 – EPS $1.31 (diluted) vs. $0.45 in 1Q09. – For comparability purposes, all prior period volumes, and vo
Slide 3: Oil & Gas Segment Variance Analysis – 1Q10 vs. 1Q09
3 First Quarter 2010 Earnings – Oil & Gas Segment Variance Analysis – 1Q10 vs. 1Q09 • Core Results for 1Q10 of $1.819 B vs. $553 mm in 1Q09 – Results reflect significantly higher commodity prices and higher volumes, partially offset by fully expensing CO2 costs in 2010, and higher DD&A rates. $85 $7
Slide 4: Oil & Gas Segment Variance Analysis – 1Q10 vs. 4Q09
4 First Quarter 2010 Earnings – Oil & Gas Segment Variance Analysis – 1Q10 vs. 4Q09 • Core Results for 1Q10 of $1.819 B vs. $1.813 B in 4Q09 – Similar sequential results reflect higher oil and natural gas prices, partially offset by increased DD&A rates, the effect of fully expensing CO2, and lower
Slide 5: Oil & Gas Segment
5 First Quarter 2010 Earnings – Oil & Gas Segment 1Q10 4Q09 Reported Segment Earnings ($ mm) $1,819 $1,643 WTI Oil Price ($/bbl) $78.71 $76.19 NYMEX Gas Price ($/mcf) $5.39 $4.29 Oxy’s Realized Prices Worldwide Oil ($/bbl) $71.88 $69.39 US Natural Gas ($/mcf) $5.62 $4.37
Slide 6: Oil & Gas Segment – Production Volumes
6 First Quarter 2010 Earnings – Oil & Gas Segment Variance Analysis – 1Q10 vs. 4Q09 1Q10 4Q09 • Oil and Gas Production Volumes (mboe/d) 743 717 – sequential increase of over 3.5%. • Sequential production volume increase includes: – In Bahrain, daily volume increases of 2,000 bbl of oil and 126 mmcf
Slide 7: Oil & Gas Segment – Sales Volumes and Costs
7 First Quarter 2010 Earnings – Oil & Gas Segment Variance Analysis – 1Q10 vs. 4Q09 1Q10 4Q09 • Oil and Gas Sales Volumes (mboe/d) 726 722 • Sales volumes were lower than the production volumes due to the timing of liftings of 13 mboe/d in the Middle East/North Africa and Latin America, of which 11
Slide 8: Oil & Gas Segment – Sequential Drivers
8 First Quarter 2010 Earnings – Oil & Gas Segment Variance Analysis – 1Q10 vs. 4Q09 • As a result of the factors discussed above 1Q10, compared to 4Q09 benefitted by: – $174 million from higher prices; – $43 million lower exploration expense and, – $62 million of lower cash operating costs and G&A e
Slide 9: Chemical Segment Variance Analysis – 1Q10 vs. 4Q09
9 First Quarter 2010 Earnings – Chemical Segment Variance Analysis – 1Q10 vs. 4Q09 • Core Results for 1Q10 of $30 mm vs. $33 mm in 4Q09 – Reflects the continued weakness in domestic markets, particularly in the housing and construction sectors, and the significant margin erosion that was experienced
Slide 10: Midstream Segment Variance Analysis – 1Q10 vs. 4Q09
10 First Quarter 2010 Earnings – Midstream Segment Variance Analysis – 1Q10 vs. 4Q09 • Core Results for 1Q10 of $94 mm vs. $81 mm in 4Q09 – Increase in earnings was due to improved margins in the marketing and trading business, partially offset by lower pipeline income from Dolphin from the two-week
Slide 11: Capital Spending
11 First Quarter 2010 Earnings – Capital Spending • Capital spending for the first quarter of 2010 was about $850 million. – Capital expenditures by segment were 80 percent in Oil and Gas, 15 percent in Midstream with the remainder in Chemicals. – The spending run rate will increase through the year
Slide 12: 2010 YTD Cash Flow
12 First Quarter 2010 Earnings – 2010 YTD Cash Flow – Free Cash Flow for 1Q10 after capex and dividends but before acquisitions and debt reduction was about $1.1 billion. ($ in millions) $3,400 $850 $300 Cash $270 Flow From $225 $145 Operations $1,900 $2,200 Beginning Cash $1,200 12/31/09 Available
Slide 13: Shares Outstanding and Debt
13 First Quarter 2010 Earnings – Shares Outstanding and Debt Shares Outstanding (mm) 1Q10 3/31/10 Weighted Average Basic 812.1 Weighted Average Diluted 813.5 Basic Shares Outstanding 812.2 Diluted Shares Outstanding 813.6 3/31/10 12/31/09 Debt/Capital 8% 9%
Slide 14: Oil and Gas Production – 2Q10 Outlook
14 First Quarter 2010 Earnings – Oil and Gas Production – 2Q10 Outlook • We expect oil and gas sales volumes to be in the range of 750 to 760 mboe/d at about current oil prices, with production slightly above these levels. • Production volume increases in 2Q10 are expected from the following sources
Slide 15: Oil and Gas Production – 2Q10 Outlook (continued)
15 First Quarter 2010 Earnings – Oil and Gas Production – 2Q10 Outlook • In the Middle East, increases are expected in the Oman Mukhaizna field and in Dolphin where the plant maintenance down-time in 1Q10 is not expected to repeat. • In Latin America, assuming no labor related stoppages, increases a
Slide 16: 2Q10 Outlook
16 First Quarter 2010 Earnings – 2Q10 Outlook • Commodity Price Sensitivity – Earnings – At current market prices, a $1.00 per barrel change in oil prices impacts oil and gas quarterly earnings before income taxes by about $36 mm; – A swing of $0.50 per mm BTU in domestic gas prices has a $31 mm imp
Slide 17: 2Q10 Outlook – Chemical and Tax Rate
17 First Quarter 2010 Earnings – 2Q10 Outlook • For the Chemical segment: – Demand for caustic soda and vinyls is expected to continue to improve in both the US and the international markets. – Improving caustic soda pricing and low natural gas prices will contribute to margin improvement. – The Che
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