EX-99 2 ex991-20090203.htm EXHIBIT 99.1 Exhibit 99.1

EXHIBIT 99.1

February 3, 2009

Stephen I. Chazen

President and

Chief Financial Officer

Credit Suisse

2009 Energy Summit

1

 

2

Full Year 2008 Results – Summary

($ in millions, except EPS data)

2008

2007

Core Results 1

$7,348

$4,405

Core EPS (diluted)

$8.95

$5.25

+70% year-over-year

Net Income

$6,857

$5,400

Reported EPS (diluted)

$8.35

$6.44

Oil and Gas sales volumes (mboe/day)

601

570

+5.4% year-over-year

Capital Spending

$4,664

$3,360

Cash Flow from Operations

$10,700

$6,800

ROE

27%

26%

ROCE 1

25%

24%

1See attached for GAAP reconciliation.

2

 

3

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 discipline

Create value

Capture EOR projects with large volumes of oil in place

Acquire assets with upside potential

Maintain top quartile financial returns

Maximize free cash flow from chemicals

Continue to increase the dividend regularly

3

 

4

Worldwide Oil & Gas Operations

Joslyn

Piceance

Hugoton

California

Permian Basin

Colombia

Bolivia

Argentina

Libya

Qatar

UAE

Oman

Yemen

4

 

5

Worldwide Production Outlook

Thousand BOE/Day

466

2005

545

2006

570

2007

601

2008

660

620

2009E

CAGR
= 8.3%

Note:  Importantly this forecast is based only on existing projects and does not contemplate any new projects or future acquisitions.

5

 

6

2008 Reserve Replacement

We estimate that we replaced approximately 200% of our oil
and gas production in 2008.  

This excludes the effect of price changes from 2007 to 2008.

Including the effect of price changes, we estimate that we
replaced around 150% of our 2008 production.

Slightly over half of the 2008 reserve additions, excluding
effect of price changes, came from internal sources resulting
in over 100% reserve replacement.

Major reserve increases were in:

the California properties;

the Permian and the Rockies, and;

Oman.

In aggregate, these areas constituted more than half of such reserve
adds.

6

 

7

Business Risk Factors

Level of Risk Acceptable to Occidental

Risk Factor

Low

Middle

High

Exploratory

ü

Commodity

ü

Political

ü

Engineering

ü

Reinvestment

ü

Financial

ü

7

 

8

Capital Allocation Philosophy

New projects must meet expectations for good returns

Return Targets*

Domestic – 15+%

International – 20+%

Compare new projects and asset acquisitions with share
repurchases

Pursue only those opportunities which meet our standards
for ROCE and complement our existing assets

Make decisions based on creating long-term value for
shareholders

*Assumes Moderate Product Prices

8

 

9

Capital Spending Program

2008 capital program was about $4.7 billion, and we spent
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 in line with product prices.

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.

Service company cost structure is more reflective of an $80 oil environment
rather than a $40 one.

About 80% of the capital will be in Oil and Gas and the remainder in
Midstream and Chemical.

An illustration of our ability to defer drilling is that we have 5
mm net acres in the US;

70% of this acreage is held by production;

about 10% consists of long-term leases, with many years on average to run,
and;

the remainder is in mineral acres held in perpetuity.

9

 

10

Capital Spending Program

Gas drilling with less than $5 per mcf gas is unattractive.

We will continue to fully fund much of our Middle East
operations, successful exploration programs in California,
Utah, and exploration in Argentina.

Formerly "quick payout" wells in the Permian and California
will be deferred until they become "quick payout" again.

We will continue to fund our Midstream and CO2 programs.

Expect our capital run rate in 1Q09 to be greater than the $3.5
billion level and will decline all year unless economic
conditions improve.

The effect of this program on our production should be modest in 2009, around
10 mboe/d, with a probable production range of 620 to 660 mboe/d and, with
about 630 to 650 mboe/d in 1Q09.

Year-over-year, Argentina and Oman will show the most growth.

10

 

11

Capital Spending Program

We are renegotiating our supplier contracts to further reduce
costs and are laying down rigs, including paying cancellation
costs when that makes sense.

We expect these efforts to result in a reduction in the cost of executing our
capital programs, as well as, a reduction of our operating expenses.

When costs and prices are inline, our capital program will be
boosted and the project inventory worked down faster.

We are also focusing on internal costs.

Some reductions in overhead will be made this year which should improve our
overhead levels by at least $1/boe.

Oxy’s focus has been and will continue to be delivering
returns well in excess of our cost of capital.

11

 

12

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

12

 

13

US Oil & Gas Operations

Elk Hills

&

California

Properties

Bakersfield

Los Angeles

Long Beach

Piceance Basin

Sheep Mountain

Hugoton

Bravo Dome

Oxy Permian

Houston

2008 net production*

361 mboe/day

60% of worldwide total

2007 reserves*

2.15 billion boe

75% of worldwide total

* See attached for GAAP reconciliation.

13

 

14

US Oil & Gas Operations

Thousand BOE/Day

US Oil and Gas Production

331

2005

354

2006

359

2007

361

2008

383

357

2009E

Key Operations/Assets:

Permian Basin

California/Elk Hills Field

Mid-Continent/Rockies

2008 Financial Data1

Pre-tax Income

$5.8 Billion

After-tax Cash

$3.3 Billion

Capital

$1.8 Billion

ROANCC**

25%

**ROANCC = Return On Average Net Capitalized Costs.

A-T Cash = Income from continuing operations after US income
taxes, plus DD&A, and minus exploration and development costs
incurred.

1See attached for GAAP reconciliation.

14

 

15

Permian Basin Operations

Colorado

Sheep Mountain

Kansas

Hugoton

Bravo Dome

To Cushing, OK

New Mexico

Denver City Unit

Lubbock

Salt Creek

Indian Basin

Area

Cogdell

Hobbs

Midland

Sharon Ridge

Seminole

Texas

Oxy Acreage

CO2 Pipelines

New Centurion Pipelines

Old Centurion Pipelines

Large resource inventory — Oxy
owns 1.7 mm acres

2008 production of 198 mboe/day

Low decline rate & long-lived
properties

Significant cash generation

Significant investment in long-lead
CO2 projects (SandRidge)

Integrated assets acquired from PXP

Response to lower oil & gas prices

Reduced drilling rig count to 8 active
rigs, down from 15

Reduced workover rig count to 80
from a peak of 185

Natural area for consolidation

15

 

16

Permian – Century CO2 Plant Project

McCamey
Hub

NGL

Pipelines

Oil

Pipelines

CO2

Pipelines

County

Mitchell

Pikes

Peak

Gray Ranch

Oxy

Pinon Field

Pakenham

New Plant

“Century”

Oxy

JM – Brown Bassett

SandRidge

Acreage

Terrell

(Oxy)

1,300 mi2 3D

5 phases

County

TX

Gas Plants

SD Plant

CO2 Pipelines

Oxy to invest $1.1 B in
CO2 plant and pipeline
facilities.

CO2 to be used in Oxy’s
Permian EOR projects.

New CO2 resources
expected to expand
Oxy’s Permian
production by at least 50
mb/day within 5 years.

Allows Oxy to exploit at
least 3.5 tcf of CO2 for
EOR use.

Enables Oxy to accelerate
and enhance development
of existing assets.

16

 

17

California Operations

2008 production of 128 mboe/day

Oxy is the largest acreage holder in
the state

Continue to build inventory of drilling
opportunities

Planning various EOR and
waterflood expansion projects.

Expect to increase production by
expanding our drilling program in
the various shale plays and deeper
pay zones where we have had
recent exploration successes.

Continue to fund development and
exploration even in the current
product price environment

17

 

18

Middle East/North Africa Oil & Gas

2008 net production*

164 mboe/day

27% of worldwide total

Libya

Qatar

UAE

Oman

Yemen

2007 reserves*

468 million boe

16% of worldwide total

* See attached for GAAP reconciliation.

18

 

19

Middle East/North Africa Oil & Gas

Thousand BOE/Day

Middle East/North Africa

Oil and Gas Production

103

2005

119

2006

135

2007

164

2008

194

185

2009E

Key Operations/Assets:

Dolphin Project

Qatar ISND

Oman/Mukhaizna

Libya

2008 Financial Data1

Pre-tax Income

$4.5 Billion

After-tax Cash

$1.3 Billion

Capital

$1.1 Billion

ROANCC**

41%

**ROANCC = Return On Average Net Capitalized Costs.

A-T Cash = Income from continuing operations minus income tax

owed by Oxy and paid by governmental entities on its behalf plus

DD&A minus exploration and development costs incurred.

1See attached for GAAP reconciliation.

19

 

20

Oman – Mukhaizna Project

Continuing large scale steam flood
EOR project – drilled 370+ wells
thru 2008

Gross production at year-end 2008
was 6x higher vs. Sept. 2005

Expect to drill approximately 215
new wells in 2009

Met targeted 2008 production exit
rate of 50 mb/d (gross)

Completing all multiple water
treatment facilities to supply the
steam generators in order to:

increase gross production to year-
end 2009 exit rate of 80 mb/d;

Expect to increase gross
production to 150 mb/d by 2012

Arabian Gulf

Fujairah

Gulf of Oman

Sohar

Al Ain

UAE

Blocks 9 & 27

9

27

PDO Block 6

Saudi Arabia

54

53

Oman

Mukhaizna

Arabian Sea

Salalah

Oxy Blocks

20

 

21

Oman – Gas Project

PSA signed on November 24th

Newly formed contract area –
“Habiba” - Block 62

20-year agreement covers 2,269
km2

Development of four gas fields

Exploration potential

Partners

Oxy (operator) 48%, Mubadala
32%, Oman 20%

Development Plan

First production by 2010

Gross production approximately
27 to 28 mboe/d by year-end 2011

Arabian Gulf

Arabian Sea

Gulf of Oman

UAE

Saudi Arabia

Oman

Fujairah

Sohar

Al Ain

Salalah

PDO Block 6

54

Habiba

Muscat

9

27

Oxy Blocks

21

 

22

Abu Dhabi – New Concessions

Agreement signed with
ADNOC to appraise and
develop of Jarn Yaphour and
Ramhan fields

Oxy will operate and hold a
100% interest in both fields

First production at Jarn
Yaphour expected in 2010

First production at Ramhan
anticipated in 2011

When fully operational, we
expect these two projects to
produce approximately 20
mboe/d (gross)

Qatar

Saudi Arabia

UAE

Oman

Maqta

Abu Dhabi

Taweelah

Dubai

Al

Ain

0

100

200 Km

Jarn

Yaphour

Field

Ramhan

Field

22

 

23

Oxy selected by Bahrain National
Oil and Gas Authority to develop oil
and gas assets in the Kingdom

Field discovered in 1932

12 billion BOE originally in place

We are now finalizing the relevant
technical and financial agreements

We hope to have the completed
agreement approved by the Bahrain
Parliament before year-end

State

of

Qatar

Arabian

Gulf

Kingdom

of

Saudi
Arabia

Kingdom

of

Bahrain

Bahrain

Field

Bahrain Field Development Project

23

 

24

Latin America Oil & Gas Operations

Colombia

Bolivia

Argentina

2008 net production*

76 mboe/day

13% of worldwide total

2007 reserves*

244 million boe

9% of worldwide total

* See attached for GAAP reconciliation.

24

 

25

Latin America Oil & Gas Operations

Key Operations/Assets:

Colombia

Argentina

2008 Financial Data1

Pre-tax Income

$0.5 Billion

After-tax Cash

$0.5 Billion

Capital

$1.0 Billion

ROANCC**

14%

32

72

76

2005

2006

2007

Thousand BOE/Day

Latin America

Oil and Gas Production

**ROANCC = Return On Average Net Capitalized Costs.  

76

78

83

2008

2009E

A-T Cash = Income from continuing operations minus income tax

owed by Oxy and paid by governmental entities on its behalf plus

DD&A minus exploration and development costs incurred.

1See attached for GAAP reconciliation.

25

 

26

Argentina Operations

2008 production – 36 mboe/day

Drilled 162 new wells in 2008 and
performed a number of recompletions

Inventory of more than 700 drilling
locations

Near field exploration program
continues to be successful and has
identified new drilling opportunities

Expect to increase production
significantly over the next four years
through drilling, waterflooding and
EOR projects

Oxy Blocks

San Jorge Basin

Cuyo Basin

Neuquen Basin

Argentina

Uruguay

Brazil

26

 

27

Other Value Enhancing Initiatives

Chemicals Operations

Midstream Assets – Pipelines

Dividend Growth

27

 

28

Chemicals Operations

($ Millions)

Period ending 12/31/08*

3-Year*

5-Year*

Average

Average

2007

2008

Pre-tax Earnings

$755

$693

$601

$759

Free Cash Flow1

$808

$767

$660

$830

Capital Spending

$244

$210

$245

$240

1See attached for GAAP reconciliation.

28

 

29

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

$520

$367

Net Book Value

$2,930

$1,935

Capex & Acquisition costs

$880

$430

Funds will be spent enhancing our CO2 production, investing in construction of
the W. Texas gas processing plant, and expanding our pipeline capacity.  

29

 

$12,700

$4,700

$1,500

$950

$940

$1,800

Available

Cash

Capex

Acquisitions

Share

Repurchase

Dividends

Other

Ending Cash

Balance

12/31/08

Cash

Flow From

Operations

$10,700

($ in millions)

Debt

Beginning

Cash

$2,000

$4,700

$10

Full Year 2008 Cash Flow

30

 

31

Creating Shareholder Value – Dividends

$0.52

$0.55

$0.645

$0.80

Annual Dividend Payout per share

$0.50

$0.94

Establishing a track record of consistent dividend increases

$1.21

31

 

32

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 to differ
materially include, but are not limited to: global commodity pricing fluctuations and
supply/demand considerations for oil, gas and chemicals; exploration risks such as
drilling of unsuccessful wells, higher than expected costs; operational interruptions;
political risks; changes in tax rates; unrealized acquisition benefits or higher than
expected integration costs; and not successfully completing (or any material delay in) any
expansion, capital expenditure, acquisition or disposition.  You should not place undue
reliance on these forward-looking statements which speak only as of the date of this
presentation.  Unless legally required, Occidental does not undertake any obligation to
update any forward-looking statements as a result of new information, future events or
otherwise.  Additionally, the SEC requires oil and natural gas companies, in their filings,
to disclose non-financial statistical information about their consolidated entities separately
from such information about their equity holdings and not to show combined totals.  The
United States Securities and Exchange Commission (SEC) permits oil and natural gas
companies, in their filings with the SEC, to disclose only proved reserves demonstrated
by actual production or conclusive formation tests to be economically producible under
existing economic and operating conditions.  We use certain terms in this presentation,
such as price unadjusted reserves, that the SEC's guidelines strictly prohibit us from
using in filings with the SEC.  Certain information in this presentation is shown on a
combined basis; however, the information is disclosed separately on our web site at
www.oxy.com .  U.S. investors are urged to consider carefully the disclosure in our Form
10-K, available through 1-888-699-7383 or at www.oxy.com.  You also can obtain a copy
from the SEC by calling 1-800-SEC-0330.

32

 

33

33

 

 

Occidental Petroleum Corporation

Reconciliation to Generally Accepted Accounting Principles (GAAP)

For the Twelve Months Ended December 31,

($ Millions)

 

 

 

2008

 

2007

 

 

 

 

 

 

Diluted

 

 

 

 

 

Diluted

 

 

 

 

 

 

EPS

 

 

 

 

 

EPS

Reported Income

 

$

6,857

 

 

$

8.35

 

 

$

5,400

 

 

$

6.44

 

Add: significant items affecting earnings

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain on sale of Russia joint venture *

 

 

–

 

 

 

 

 

 

 

(412

)

 

 

 

 

Legal settlements *

 

 

–

 

 

 

 

 

 

 

(112

)

 

 

 

 

Gain on sale of oil and gas interests

 

 

–

 

 

 

 

 

 

 

(35

)

 

 

 

 

Asset impairments

 

 

599

 

 

 

 

 

 

 

74

 

 

 

 

 

Sale of exploration properties

 

 

–

 

 

 

 

 

 

 

(103

)

 

 

 

 

Rig contract terminations

 

 

58

 

 

 

 

 

 

 

–

 

 

 

 

 

Plant closure and impairment

 

 

90

 

 

 

 

 

 

 

–

 

 

 

 

 

Debt purchase expense

 

 

–

 

 

 

 

 

 

 

167

 

 

 

 

 

Facility closure

 

 

–

 

 

 

 

 

 

 

47

 

 

 

 

 

Gain on sale of Lyondell shares

 

 

–

 

 

 

 

 

 

 

(326

)

 

 

 

 

Severance accrual

 

 

–

 

 

 

 

 

 

 

25

 

 

 

 

 

Tax effect of pre-tax adjustments

 

 

(238

)

 

 

 

 

 

 

2

 

 

 

 

 

Discontinued operations, net *

 

 

(18

)

 

 

 

 

 

 

(322

)

 

 

 

 

Core Results

 

$

7,348

 

 

$

8.95

 

 

$

4,405

 

 

$

5.25

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

* Amount shown after-tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Diluted Common Shares Outstanding

 

 

 

 

 

 

820.8

 

 

 

 

 

 

 

839.1

 

 

 

Occidental Petroleum Corporation

Return on Capital Employed (% )

($ Millions)

 

Reconciliation to Generally Accepted Accounting Principles (GAAP)

 

2007

 

2008

GAAP measure – earnings applicable to common shareholders

 

5,400

 

 

6,857

 

Interest expense

 

199

 

 

26

 

Tax effect of interest expense

 

(70

)

 

(9

)

Earnings before tax-effected interest expense

 

5,529

 

 

6,874

 

 

 

 

 

 

 

 

GAAP stockholders' equity

 

22,823

 

 

27,300

 

 

 

 

 

 

 

 

DEBT

 

 

 

 

 

 

GAAP debt

 

 

 

 

 

 

Debt, including current maturities

 

1,788

 

 

2,747

 

Non-GAAP debt

 

 

 

 

 

 

Capital lease obligation

 

25

 

 

25

 

Total debt

 

1,813

 

 

2,772

 

 

 

 

 

 

 

 

Total capital employed

 

24,636

 

 

30,072

 

 

 

 

 

 

 

 

Return on Capital Employed (%)

 

24

 

 

25

 

 

 

Worldwide Sales Volumes

Thousand Barrels of Oil Equilavent per Day

Reconciliation to Generally Accepted Accounting Principles (GAAP)

 

 

 

Consolidated Subsidiaries

 

Other Interests

 

Worldwide

 

 

2008

 

OIL

GAS

BOE

 

OIL

GAS

BOE

 

OIL

GAS

BOE

 

% of Total

SALES VOLUMES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

US

 

263

 

587

 

361

 

 

–

 

–

 

–

 

 

263

 

587

 

361

 

 

60%

Latin America

 

75

 

42

 

82

 

 

(6

)

–

 

(6

)

 

69

 

42

 

76

 

 

13%

Middle East / North Africa

 

127

 

208

 

162

 

 

2

 

–

 

2

 

 

129

 

208

 

164

 

 

27%

Total

 

465

 

837

 

605

 

 

(4

)

–

 

(4

)

 

461

 

837

 

601

 

 

100%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Natural gas volumes have been converted to equivalent BOE based on energy content of 6,000 cubic feet of gas to one barrel of oil

 

Worldwide Reserves

Reconciliation to Generally Accepted Accounting Principles (GAAP)

 

 

 

Consolidated Subsidiaries

 

Other Interests

 

Worldwide

 

 

2007

 

OIL

GAS

BOE

 

OIL

GAS

BOE

 

OIL

GAS

BOE

 

% of Total

RESERVES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

US

 

1,707

 

2,672

 

2,152

 

 

–

 

–

 

–

 

 

1,707

 

2,672

 

2,152

 

 

75%

Latin America

 

214

 

208

 

249

 

 

(5

)

–

 

(5

)

 

209

 

208

 

244

 

 

9%

Middle East / North Africa

 

305

 

963

 

465

 

 

3

 

–

 

3

 

 

308

 

963

 

468

 

 

16%

Total

 

2,226

 

3,843

 

2,866

 

 

(2

)

–

 

(2

)

 

2,224

 

3,843

 

2,864

 

 

100%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Occidental Petroleum Corporation

Reconciliation to Generally Accepted Accounting Principles (GAAP)

For the Year Ended December 31, 2008

 

 

 

Consolidated Subsidiaries

 

 

United

 

Latin

 

Middle East

 

Other

 

 

 

 

States

 

America

 

North Africa

 

Eastern

 

TOTAL

Capitalized Costs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Proved properties

 

22,543

 

 

5,177

 

 

9,829

 

 

–

 

 

37,549

 

Unproved properties

 

1,855

 

 

–

 

 

74

 

 

4

 

 

1,933

 

 

 

24,398

 

 

5,177

 

 

9,903

 

 

4

 

 

39,482

 

Accumulated DD&A

 

(6,669

)

 

(1,693

)

 

(4,021

)

 

–

 

 

(12,383

)

Capitalized cost

 

17,729

 

 

3,484

 

 

5,882

 

 

4

 

 

27,099

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs Incurred

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property Acquisition Costs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Proved Properties

 

1,819

 

 

8

 

 

4

 

 

–

 

 

1,831

 

Unproved Properties

 

1,362

 

 

–

 

 

9

 

 

–

 

 

1,371

 

Exploration Costs

 

130

 

 

96

 

 

115

 

 

–

 

 

341

 

Development Costs

 

1,740

 

 

864

 

 

1,835

 

 

–

 

 

4,439

 

Cost Incurred

 

5,051

 

 

968

 

 

1,963

 

 

–

 

 

7,982

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Results of Operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

9,581

 

 

2,009

 

 

6,253

 

 

–

 

 

17,843

 

Production costs

 

1,666

 

 

429

 

 

590

 

 

–

 

 

2,685

 

Taxes other than on income

 

544

 

 

36

 

 

–

 

 

–

 

 

580

 

Exploration expenses

 

93

 

 

54

 

 

265

 

 

(3

)

 

409

 

Other operating expenses

 

350

 

 

44

 

 

158

 

 

1

 

 

553

 

Impairment of suspended costs

 

–

 

 

476

 

 

–

 

 

–

 

 

476

 

DD&A

 

1,094

 

 

453

 

 

760

 

 

–

 

 

2,307

 

Pretax income

 

5,834

 

 

517

 

 

4,480

 

 

2

 

 

10,833

 

Income taxes

 

1,857

 

 

37

 

 

2,284

 

 

–

 

 

4,178

 

Results of operations

 

3,977

 

 

480

 

 

2,196

 

 

2

 

 

6,655

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

After-tax Cash

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

After-tax income

 

3,977

 

 

480

 

 

2,196

 

 

2

 

 

6,655

 

+ DD&A

 

1,094

 

 

453

 

 

760

 

 

–

 

 

2,307

 

+ Impairment of suspended costs

 

–

 

 

476

 

 

–

 

 

–

 

 

476

 

+ Exploration expense

 

93

 

 

54

 

 

265

 

 

(3

)

 

409

 

- Costs incurred (development)

 

(1,740

)

 

(864

)

 

(1,835

)

 

–

 

 

(4,439

)

- Costs incurred (exploration)

 

(130

)

 

(96

)

 

(115

)

 

–

 

 

(341

)

After-tax cash

 

3,294

 

 

503

 

 

1,271

 

 

(1

)

 

5,067

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on Average Net Capitalized Costs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capitalized costs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2008

 

17,729

 

 

3,484

 

 

5,882

 

 

4

 

 

27,099

 

2007

 

13,782

 

 

3,490

 

 

4,895

 

 

–

 

 

22,167

 

Average

 

15,756

 

 

3,487

 

 

5,389

 

 

2

 

 

24,633

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

After-tax income

 

3,977

 

 

480

 

 

2,196

 

 

2

 

 

6,655

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return %

 

25%

 

14%

 

41%

 

 

 

27%

 

 

Chemicals Free Cash Flow

Reconciliation to Generally Accepted Accounting Principles (GAAP)

($ Millions)

 

 

2004

2005

2006

2007

2008

Occidental Petroleum Consolidated Statement of Cash Flows

Cash flow from operating activities

3,878

 

5,337

 

6,353

 

6,798

 

10,652

 

Cash flow from investing activities

(2,428

)

(3,161

)

(4,383

)

(3,128

)

(9,457

)

Cash flow from financing activities

(821

)

(1,187

)

(2,819

)

(3,045

)

(1,382

)

Change in cash

629

 

989

 

(849

)

625

 

(187

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Chemicals Free Cash Flow

 

 

 

 

 

 

 

 

 

 

Core results (see reconciliation below)

416

 

784

 

906

 

601

 

759

 

Depreciation & amortization expense

260

 

268

 

279

 

304

 

311

 

Roundings

–

 

1

 

(2

)

–

 

–

 

Capital expenditures (excluding acquisitions)

(151

)

(168

)

(248

)

(245

)

(240

)

Free cash flow

525

 

885

 

935

 

660

 

830

 

 

 

 

 

 

 

 

 

 

 

 

 

Core

Cash

Capital

 

 

 

 

 

Results

Flow

Spending

 

 

 

 

3-Year Average (2006–2008)

755

 

808

 

244

 

 

 

 

 

5-Year Average (2004–2008)

693

 

767

 

210

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment income

416

 

614

 

906

 

601

 

669

 

Add: significant items affecting earnings

 

 

 

 

 

 

 

 

 

 

Plant closure and impairments

–

 

–

 

–

 

–

 

90

 

Hurricane insurance charges

–

 

11

 

–

 

–

 

–

 

Write-off of plants

–

 

159

 

–

 

–

 

–

 

Core results

416

 

784

 

906

 

601

 

759