Occidental Petroleum Corporation · NYSE:OXY
Occidental Petroleum — UBS 2009 Global Oil & Gas Conference
31 slides from Occidental Petroleum's conference presentation, May 20, 2009
Slide 1: UBS 2009 Global Oil & Gas Conference
May 20, 2009 Stephen I. Chazen President and Chief Financial Officer UBS 2009 Global Oil & Gas Conference
Slide 2: What Are Our Current Objectives?
2 What Are Our Current Objectives? • Allocate and deploy capital with a focus on achieving strong financial returns • Focus on reducing costs in line with lower commodity prices • Pursue only those opportunities which meet our standards for ROCE and complement our existing assets – Return Targets* •
Slide 3: Building a Pipeline of Future Growth Projects
3 Building a Pipeline of Future Growth Projects • Permian Basin – opportunity to deploy additional sources of CO2 to improve recovery and boost oil production. • California – Oxy is the largest acreage holder in the state, and is continuing to pursue recent exploration successes. • Piceance Basin –
Slide 4: Capital Spending Program
4 Capital Spending Program • Our 2009 capital program of $3.5 billion will focus on ensuring that our returns remain well above our cost of capital given current oil and gas prices and contractor costs. – About 80% of the capital will be in Oil and Gas and the remainder in Midstream and Chemical. •
Slide 5: Oil & Gas, and Midstream Capital Spending
5 Oil & Gas, and Midstream Capital Spending ($ in millions) 2008 2009E Growth Capital 2,065 1,005 Base Capital 2,275 2,120 Total Oil & Gas, and Midstream Capital 4,340 3,125
Slide 6: Cost Reduction Initiatives – Change In Contract Terms
6 Cost Reduction Initiatives – Change In Contract Terms • We continue to negotiate cost reductions across all areas including, but not limited to, drilling rigs, service rigs, drilling services, artificial lift, MRO, chemicals and OCTG. – On average, in the current price environment, we expect a 20%
Slide 7: Large Inventory of Deferrable Opportunities
7 Large Inventory of Deferrable Opportunities • We spent about $4.7 billion in capital during 2008, and another $4.7 billion for acquisitions. – As a result, we have accumulated a sizeable inventory of projects which can be delayed until the industry cost structure is more in line with product price
Slide 8: Worldwide Oil & Gas Operations
8 Worldwide Oil & Gas Operations Joslyn Piceance Hugoton Libya Bahrain California Qatar UAE Permian Basin Oman Yemen Colombia Bolivia Argentina
Slide 9: Worldwide Production Outlook
9 Worldwide Production Outlook Thousand BOE/Day 800 700 660 601 CAGR 570 = 8.3% 600 545 620 500 466 400 300 200 100 0 2005 2006 2007 2008 2009E US ME/NA Latin America Variance Note: Note: Importantly Importantly this forecast is based only on existing projects and does not contemplate any new projec
Slide 10: US Oil & Gas Operations
10 US Oil & Gas Operations Utah Piceance Basin Elk Hills Sheep Mountain Hugoton & California Bakersfield Bravo Dome Properties Los Angeles Long Beach Oxy Permian Houston 2008 net production* 2008 reserves* • 361 mboe/day • 2.07 billion boe • 60% of worldwide total • 70% of worldwide total ** See See
Slide 11: US Oil & Gas Operations
11 US Oil & Gas Operations Thousand BOE/Day 600 Key Operations/Assets: – Permian Basin 500 US Oil and Gas Production – California/Elk Hills Field 400 383 – Mid-Continent/Rockies 359 361 354 331 357 1 300 2008 Financial Data 200 Pre-tax Income $5.8 Billion After-tax Cash $3.3 Billion 100 Capital $1.9
Slide 12: Permian Basin Operations
12 Permian Basin Operations Colorado Kansas • Large resource inventory — Oxy Sheep Sheep Mountain Mountain Hugoton Hugoton owns 1.7 mm acres • 2008 production of 198 mboe/day Bravo Bravo Dome Dome • Low decline rate & long-lived properties To To Cushing, Cushing, OK OK • Significant cash generation
Slide 13: Permian – Century CO2 Plant Project
13 Permian – Century CO2 Plant Project McCamey • Oxy to invest $1.1 B in Hub NGL CO2 plant and pipeline Pipelines facilities. Oil Pipelines • CO2 to be used in Oxy’s G as Pi CO2 Permian EOR projects. pe Pipelines lin es County Pikes Mitchell • New CO2 resources Peak expected to expand Gray Ranch Oxy
Slide 14: California Exploration
14 California Exploration • Oxy has drilled 35 wells seeking non-traditional hydrocarbon bearing zones in CA in a little over a year. – Of these wells, 13 are commercial, 12 are currently being evaluated. – 4 of these wells account for approx. 28 mmcf/d feet of gas and 3 mb/d of gross liquids produc
Slide 15: Middle East/North Africa Oil & Gas
15 Middle East/North Africa Oil & Gas 2008 net production* • 164 mboe/day • 27% of worldwide total Libya Bahrain Qatar UAE Oman 2008 reserves* Yemen • 650 million boe • 22% of worldwide total ** See See attached attached for for GAAP GAAP reconciliation. reconciliation.
Slide 16: Middle East/North Africa Oil & Gas
16 Middle East/North Africa Oil & Gas Thousand BOE/Day 300 Key Operations/Assets: – Dolphin Project Middle East/North Africa – Qatar ISND 240 Oil and Gas Production 194 – Oman/Mukhaizna 180 164 185 – Bahrain 1 119 135 2008 Financial Data 120 103 Pre-tax Income $4.5 Billion After-tax Cash $1.6 Billio
Slide 17: Oman – Mukhaizna Project
17 Oman – Mukhaizna Project • Continuing large scale steam flood EOR project – drilled 370+ wells Arabian Gulf thru 2008 Fujairah Gulf of Oman Al Ain Sohar • Gross production at year-end 2008 was 6x higher vs. Sept. 2005 UAE Mukhaizna Blocks 9 & 27 9 • Expect to drill approximately 215 27 new wells
Slide 18: Oman – Gas Project
18 Oman – Gas Project • PSA signed on 11/24/08 Arabian Gulf Fujairah – Newly formed contract area – Gulf of Oman “Habiba” - Block 62 Al Ain Sohar – 20-year agreement covers 2,269 UAE Block 62 km2 9 Existing 27 Muscat – Development of four gas fields Operations – Exploration potential Saudi Arabia •
Slide 19: Abu Dhabi – New Concessions
19 Abu Dhabi – New Concessions • Agreement signed with ADNOC to appraise and develop of Jarn Yaphour and Ramhan fields Qatar Dubai • Oxy will operate and hold a Abu Dhabi 100% interest in both fields Taweelah Ramhan Field • First production at Jarn Maqta AlAin Yaphour expected in 2010 • First produc
Slide 20: Bahrain Field Development Project
20 Bahrain Field Development Project • Oxy and Mubadala have signed a Arabian Development and Production Sharing Gulf Agreement (DPSA) with the NOGA of Kingdom of Bahrain for the further development of Bahrain the Bahrain Field. Bahrain Field • Will form a Joint OpCo. to serve as operator under the
Slide 21: Latin America Oil & Gas Operations
21 Latin America Oil & Gas Operations Colombia 2008 net production* • 76 mboe/day • 13% of worldwide total Bolivia Argentina 2008 reserves* • 255 million boe • 8% of worldwide total ** See See attached attached for for GAAP GAAP reconciliation. reconciliation.
Slide 22: Latin America Oil & Gas Operations
22 Latin America Oil & Gas Operations Thousand BOE/Day 120 Latin America Key Operations/Assets: Oil and Gas Production 100 – Colombia 83 – Argentina 80 76 76 72 78 1 2008 Financial Data 60 Pre-tax Income $0.5 Billion 40 32 After-tax Cash $0.5 Billion Capital $1.0 Billion 20 ROANCC** 14% 0 2005 2006
Slide 23: Argentina Operations
23 Argentina Operations • 2008 production – 36 mboe/day Brazil • Drilled 162 new wells in 2008 and Cuyo Basin Uruguay performed a number of recompletions Neuquen Basin • Inventory of more than 700 drilling ile Ch locations Argentina • Near field exploration program continues to be successful and has
Slide 24: Other Value Enhancing Initiatives
24 Other Value Enhancing Initiatives • Chemicals Operations – consistent free cash generator • Midstream Assets – Pipelines – adds value to Oil and Gas operations • Dividend Growth – consistent track record of dividend increases
Slide 25: Chemicals Operations
25 Chemicals Operations ($ Millions) Period ending 12/31/08* 3-Year* 5-Year* Average Average 2007 2008 Pre-tax Earnings $755 $693 $601 $759 1 Free Cash Flow $808 $767 $660 $830 Capital Spending $244 $210 $245 $240 11 See See attached attached for for GAAP GAAP reconciliation. reconciliation.
Slide 26: Midstream, Marketing and Other
26 Midstream, Marketing and Other Midstream assets reclassified out of the Oil and Gas segment • The assets are comprised of the following businesses: Marketing, Gas processing plants, Pipelines, Power generation, CO2 source fields and facilities ($ in millions) Midstream Data 2008 2007 Core Results
Slide 27: First Quarter 2009 – Cash Flow
27 First Quarter 2009 – Cash Flow ($ in millions) $3,100 $500 Operating Cash $1,200 Before Working Capital $1,300 $260 $40 $1,100 Beginning Cash $1,800 12/31/08 Available Working Capex & Dividends Other Ending Cash Cash Capital Acquisitions 3/31/09
Slide 28: Creating Shareholder Value – Dividends
28 Creating Shareholder Value – Dividends Establishing a track record of consistent dividend increases • Annual dividend rate was increased to $1.32 per share from $1.28 on 4/30/09 $1.21 Annual Dividend Payout per share $0.94 5.9% 1 = A GR $0.80 C 2008 2007 $0.645 2006 $0.55 $0.50 $0.52 2005 2002 20
Slide 29: Summary – Corporate Strategy/Philosophy
29 Summary – Corporate Strategy/Philosophy • Focus on core areas – long-term production growth of 5 - 8% CAGR • US - Permian Basin, California, and Mid-continent/Rockies • Middle East/North Africa • Latin America • Maintain strong balance sheet – Maintain “A” credit rating – Maintain investment disc
Slide 30: Occidental Petroleum Corporation
30 Occidental Petroleum Corporation Statements in this presentation that contain words such as "will," "expect" or "estimate," or otherwise relate to the future, are forward-looking and involve risks and uncertainties that could significantly affect expected results. Factors that could cause results
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