EXHIBIT 99.4
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Occidental Petroleum Corporation
Second Quarter 2010 Earnings Conference Call
July 27, 2010
Second Quarter 2010 Earnings Conference Call
July 27, 2010
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Second Quarter 2010 Earnings - Highlights
Second Quarter 2010 Earnings - Highlights
• Core Results - $1.1 Billion vs. $689 Million in 2Q09
– Core EPS $1.31 (diluted) vs. $0.85 in 2Q09.
• Net Income - $1.1 Billion vs. $682 Million in 2Q09
– EPS $1.31 (diluted) vs. $0.84 in 2Q09.
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$1,083
$841
$83
$71
$19
$64
$1,853
Sales
Price
Price
Sales
Volume
Volume
*Higher operating costs and CO2 expense
2Q09
2Q10
($ in millions)
Higher DD&A
Rates
Rates
Exploration
Expense
Expense
All
Others*
Others*
Second Quarter 2010 Earnings - Oil & Gas
Segment Variance Analysis - 2Q10 vs. 2Q09
Segment Variance Analysis - 2Q10 vs. 2Q09
• Core Results for 2Q10 of $1.853 B vs. $1.083 B in 2Q09
– Improvement in 2010 driven mostly by higher commodity prices with additional contributions
from higher volumes. Partially offsetting these gains were higher DD&A rates and higher
operating expenses, partly resulting from fully expensing CO2 costs in 2010.
from higher volumes. Partially offsetting these gains were higher DD&A rates and higher
operating expenses, partly resulting from fully expensing CO2 costs in 2010.
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2Q10 2Q09
Reported Segment Earnings ($ mm) $1,853 $1,083
WTI Oil Price ($/bbl) $78.03 $59.62
NYMEX Gas Price ($/mcf) $4.18 $3.83
Oxy’s Realized Prices
Worldwide Oil ($/bbl) $72.13 $52.97
US Natural Gas ($/mcf) $4.19 $2.87
Second Quarter 2010 Earnings - Oil & Gas Segment
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Second Quarter 2010 Earnings - Oil & Gas Segment
2Q10 2Q09
Oil and Gas Production Volumes (mboe/d) 743 717
– Year-over-year increase of over 3.5%.
• 2Q10 production was lower than our guidance due primarily to shortfalls in
California and adjustments resulting from the mechanics of PSCs in the
Middle East. Our production in California continues to be affected by the gas
plants' and related infrastructures' inability to process all gas that could be
produced.
California and adjustments resulting from the mechanics of PSCs in the
Middle East. Our production in California continues to be affected by the gas
plants' and related infrastructures' inability to process all gas that could be
produced.
• Year-over-year production was negatively impacted by 29 mboe/d in MENA,
Long Beach and Colombia, as a result of higher oil prices affecting our PSC
and similar contracts.
Long Beach and Colombia, as a result of higher oil prices affecting our PSC
and similar contracts.
• 2Q10 includes volumes in Bahrain of 3,000 bbls of oil and 161 mmcf of gas
and 16 mboe of higher volumes in the Mukhaizna field of Oman. Our
domestic operations added 11 mboe. Volume gains in the Kern County
discovery area were moderated by production declines in Elk Hills, which
were caused by gas gathering and processing issues.
and 16 mboe of higher volumes in the Mukhaizna field of Oman. Our
domestic operations added 11 mboe. Volume gains in the Kern County
discovery area were moderated by production declines in Elk Hills, which
were caused by gas gathering and processing issues.
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Second Quarter 2010 Earnings - Oil & Gas
Segment - Cash Production Costs and Taxes
Segment - Cash Production Costs and Taxes
Second Quarter 2010 Earnings - Oil & Gas
Segment - Cash Production Costs and Taxes
Segment - Cash Production Costs and Taxes
• Oil and gas cash production costs, excluding production
and property taxes, were $9.90 per boe for 1H10.
and property taxes, were $9.90 per boe for 1H10.
– 2Q10 per boe production costs were slightly lower than this
figure.
figure.
– Full-year 2009 costs were $9.37 a boe.
– The increase reflects $0.30 per boe higher CO2 costs, due to our
decision to expense 100% of injected CO2 beginning in 2010, and
higher field support operations and maintenance costs.
decision to expense 100% of injected CO2 beginning in 2010, and
higher field support operations and maintenance costs.
• Taxes - other than on income were $1.80 per boe for the
first six months of 2010 compared to $1.60 per barrel for
all of 2009. These costs, which are sensitive to product
prices, reflect the effect of higher crude oil and gas prices
in 2010.
first six months of 2010 compared to $1.60 per barrel for
all of 2009. These costs, which are sensitive to product
prices, reflect the effect of higher crude oil and gas prices
in 2010.
• Exploration expense was $73 million in 2Q10.
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$115
$8
$151
$125
$25
$108
Sales
Price
Price
Sales
Volume / Mix
Volume / Mix
*Higher feedstock costs
2Q10
2Q10
($ in millions)
Operations /
Manufacturing *
Manufacturing *
All
Others
Others
Second Quarter 2010 Earnings - Chemical
Segment Variance Analysis - 2Q10 vs. 2Q09
Segment Variance Analysis - 2Q10 vs. 2Q09
• Core Results for 2Q10 of $108 mm vs. $115 mm in 2Q09
– Results reflect improvement from the first quarter 2010 in margins and volumes across most
product lines.
product lines.
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$63
$16
$7
$6
$13
Marketing and
Trading
Trading
Gas
Processing
2Q09
2Q10
($ in millions)
All Others
Pipelines
$14
Power
Generation
Generation
$81
Second Quarter 2010 Earnings - Midstream
Segment Variance Analysis - 2Q10 vs. 2Q09
Segment Variance Analysis - 2Q10 vs. 2Q09
• Core Results for 2Q10 of $13 mm vs. $63 mm in 2Q09
– The decrease in earnings was mainly due to a pre-tax $104 million ($0.07 after-tax per
diluted share) loss at Phibro, the bulk of which resulted from marking its quarter-end open
positions to market. This was partially offset by higher margins in the marketing, gas
processing and pipeline businesses.
diluted share) loss at Phibro, the bulk of which resulted from marking its quarter-end open
positions to market. This was partially offset by higher margins in the marketing, gas
processing and pipeline businesses.
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Second Quarter 2010 Earnings -
Six Months Results & Capital Spending
Six Months Results & Capital Spending
Second Quarter 2010 Earnings -
Six Months Results & Capital Spending
Six Months Results & Capital Spending
YTD2010 YTD2009
• Net Income ($ mm) $2,127 $1,050
• EPS (diluted) $2.61 $1.29
• Capital spending for 2Q10 was about $865 million and
$1.7 billion for 1H10.
$1.7 billion for 1H10.
– Year to-date capital expenditures by segment were 81% in Oil and Gas,
13% in Midstream with the remainder in Chemicals.
13% in Midstream with the remainder in Chemicals.
– Our total year capital is expected to be about $4.5 billion.
– The capital spending rate will increase in the second half of the year
largely resulting from Iraq, Bahrain and California.
largely resulting from Iraq, Bahrain and California.
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$5,500
$300
$540
$760
$2,300
Available
Cash
Capex
Debt
Reduction
Dividends
Acquisitions
& Foreign
Contracts
Ending Cash
Balance
6/30/10
Cash
Flow From
Operations
$4,300
($ in millions)
Beginning
Cash
$1,200
12/31/09
$1,700
Other
$100
– Free Cash Flow for 1H10 after capex and dividends but before
acquisition activity and debt retirements was about $2.1 billion.
acquisition activity and debt retirements was about $2.1 billion.
Second Quarter 2010 Earnings -
Cash Flow 2010 YTD
Cash Flow 2010 YTD
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Second Quarter 2010 Earnings -
Shares Outstanding and Debt
Shares Outstanding and Debt
Shares Outstanding (mm) YTD10 6/30/10
Weighted Average Basic 812.3
Weighted Average Diluted 813.7
Basic Shares Outstanding 812.8
Diluted Shares Outstanding 814.2
6/30/10 12/31/09
Debt/Capital 8% 9%
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Second Quarter 2010 Earnings -
Oil and Gas Production - 3Q10 Outlook
Oil and Gas Production - 3Q10 Outlook
• We expect oil and gas production and sales volumes to
be in the range of 750 to 760 mboe/d at about current oil
prices.
be in the range of 750 to 760 mboe/d at about current oil
prices.
• Volume increases in 3Q10 are expected to come from
California, Oman's Mukhaizna field and Dolphin.
California, Oman's Mukhaizna field and Dolphin.
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Second Quarter 2010 Earnings - 3Q10 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
$37 mm;
impacts oil and gas quarterly earnings before income taxes by about
$37 mm;
– A swing of $0.50 per mm BTU in domestic gas prices has a $30 mm
impact on quarterly pretax income; the current NYMEX gas price is
around $4.80 p/mcf.
impact on quarterly pretax income; the current NYMEX gas price is
around $4.80 p/mcf.
• We expect 3Q10 exploration expense to be about $90
mm for seismic and drilling for our exploration
programs.
mm for seismic and drilling for our exploration
programs.
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Second Quarter 2010 Earnings - 3Q10 Outlook
Second Quarter 2010 Earnings - 3Q10 Outlook
• For the Chemical segment:
– Modest volume and margin improvement is expected over 2Q10
levels for chlor-alkali and vinyl products.
levels for chlor-alkali and vinyl products.
– The Chemical segment is expected to provide earnings for 3Q10
of about $125 million.
of about $125 million.
– While the domestic market continues to be lackluster, export
volumes are up about 13% compared to 2009.
volumes are up about 13% compared to 2009.
– Chlorine exports are averaging about 42% of total production.
• We successfully renegotiated and extended our
hydrocarbon concessions in the Santa Cruz province of
Argentina, increasing our oil and gas proved reserves
from 129 mm to 202 mm barrels.
hydrocarbon concessions in the Santa Cruz province of
Argentina, increasing our oil and gas proved reserves
from 129 mm to 202 mm barrels.
– The current quarter DD&A expense reflects the resulting
decrease in the DD&A rate.
decrease in the DD&A rate.
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Second Quarter 2010 Earnings -
Acquisitions - 3Q10 Outlook
Acquisitions - 3Q10 Outlook
Second Quarter 2010 Earnings -
Acquisitions - 3Q10 Outlook
Acquisitions - 3Q10 Outlook
• We have recently negotiated a number of asset
acquisitions in the Oil and Gas business that in
aggregate would be about $1.5 billion.
acquisitions in the Oil and Gas business that in
aggregate would be about $1.5 billion.
– These expected acquisitions are mainly from private individuals
largely in the gassier parts of the Permian basin where there
have been several much more expensive deals announced.
largely in the gassier parts of the Permian basin where there
have been several much more expensive deals announced.
– When the acquisitions are concluded they will add to production
mostly in the Midcontinent Gas business unit, which includes
these parts of the Permian basin.
mostly in the Midcontinent Gas business unit, which includes
these parts of the Permian basin.
– Virtually all of the improvement in the production rate will be in
subsequent years.
subsequent years.
• We expect our combined worldwide tax rate in the third quarter of
2010 to be about 42 percent.
2010 to be about 42 percent.
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Second Quarter 2010 Earnings - California Update
Second Quarter 2010 Earnings - California Update
• Conventional Drilling Opportunities:
– During 1H10, we drilled 6 conventional exploration and extension
wells in California.
wells in California.
– Of these, 5 were outside of the Kern County Discovery area.
– Two of these new wells are currently being tested.
– In 2H10, we are planning to drill 2 conventional exploration wells
in the Kern County Discovery area and one exploration well
outside this area.
in the Kern County Discovery area and one exploration well
outside this area.
– In addition, we have drilled 10 conventional exploitation wells in
the Kern County Discovery area in 1H10 and plan to drill 23 more
during 2H10.
the Kern County Discovery area in 1H10 and plan to drill 23 more
during 2H10.
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Second Quarter 2010 Earnings - California Update
Second Quarter 2010 Earnings - California Update
• Unconventional Drilling Opportunities:
– We also drilled 7 unconventional exploration wells in 1H10, of
which 2 were successful and 2 are being tested.
which 2 were successful and 2 are being tested.
– We plan to drill 15 additional unconventional exploration wells
during 2H10.
during 2H10.
– We have also drilled 10 unconventional exploitation wells in
California in 1H10, with 25 more expected to be drilled during
2H10.
California in 1H10, with 25 more expected to be drilled during
2H10.
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