Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - OCCIDENTAL PETROLEUM CORP /DE/ | form8k-20101210.htm |
| EX-99.1 - EXHIBIT 99.1 - OCCIDENTAL PETROLEUM CORP /DE/ | ex99_1-20101210.htm |
EXHIBIT 99.2
Divestment of Argentine Assets, Purchase of New U.S.
Assets, Dividend Increase
Assets, Dividend Increase
Occidental Petroleum Corporation
December 10, 2010
December 10, 2010
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• Divestment of Oxy’s Argentine oil and gas operations to
Sinopec for after-tax proceeds of approximately $2.5 billion
Sinopec for after-tax proceeds of approximately $2.5 billion
• Oxy to purchase oil and gas properties in South Texas and
North Dakota for about $3.2 billion
North Dakota for about $3.2 billion
• Oxy to increase its interest in General Partner (GP) ownership
in Plains All-American (PAA) by 13% to approximately 35%
in Plains All-American (PAA) by 13% to approximately 35%
• Oxy has agreed to acquire the remaining 50% joint venture
interest in the Elk Hills Power Plant from Sempra
interest in the Elk Hills Power Plant from Sempra
• 21% increase in our common share dividend rate from $0.38
to $0.46 per quarter effective with the 4/15/2011 payment
to $0.46 per quarter effective with the 4/15/2011 payment
Summary of Transactions & Announcements
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• These new acquisitions and the sale of Argentina will:
– be immediately accretive to our earnings, ROCE and cash flow after
capital;
capital;
– provide greater certainty in achieving both our short-term and long-term
average annual production growth outlook of 5 to 8%;
average annual production growth outlook of 5 to 8%;
– increase the domestic weighting of our Oil and Gas operations;
– not materially alter the mix between our oil and natural gas reserves or
production.
production.
• These properties, combined with acquisitions completed
earlier this year, will more than replace the production from
the sale of Argentina
earlier this year, will more than replace the production from
the sale of Argentina
• We expect that each of these new acquisitions together with
future drilling, potential exploration and consolidation
opportunities in these areas, over time, will grow to 50+
mboe/d
future drilling, potential exploration and consolidation
opportunities in these areas, over time, will grow to 50+
mboe/d
Impact of Transactions
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• Plains is one of the largest operators of oil pipelines in North
America with operations in Texas, California, and North
Dakota, among other areas
America with operations in Texas, California, and North
Dakota, among other areas
• PAA’s operations compliment Oxy’s domestic oil and gas
operations
operations
• Oxy’s purchase of Sempra’s 50% interest in the Elk Hills
Power Plant will improve efficiency and lower operating costs
at our Elk Hills business unit
Power Plant will improve efficiency and lower operating costs
at our Elk Hills business unit
• Oxy’s Argentine assets being sold currently produce ~ 44
mboe/d net to Oxy
mboe/d net to Oxy
• When the transaction closes, Oxy expects to report a gain on
the sale
the sale
Impact of Transactions
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• We expect all of these transactions to be completed no later
than the end of 1Q11, subject to normal regulatory approvals
than the end of 1Q11, subject to normal regulatory approvals
• Our outlook for improved free cash flow provides for the
substantial increase to our dividend
substantial increase to our dividend
• Oxy will finance the acquisitions from both existing balance
sheet cash and debt financing
sheet cash and debt financing
Impact of Transactions
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Production Improvement Post Acquisitions and
Argentina Divestiture
Argentina Divestiture
2011
2012
2013
2014
44
62
64
65
49
Argentina
Forecast
Forecast
Shell So. Texas
Acquisition
Acquisition
North Dakota
Acquisitions
Acquisitions
Other 2010
Acquisitions
Acquisitions
Current
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These properties, combined with
acquisitions completed earlier this
year, will more than replace the
production from the sale of Argentina
acquisitions completed earlier this
year, will more than replace the
production from the sale of Argentina
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• South Texas assets will be purchased from Shell for about
$1.8 billion and currently produce ~ 200 mmcf/d of gas
equivalent
$1.8 billion and currently produce ~ 200 mmcf/d of gas
equivalent
• Shell has owned and operated the properties for many years
• The assets will be 100% operated by Oxy and have an
excellent inventory of drilling opportunities
excellent inventory of drilling opportunities
• Fields in transaction: McAllen Ranch, Javelina, Slick Ranch,
McAllen Pharr & La Copita/North Rincon, and Lyda
McAllen Pharr & La Copita/North Rincon, and Lyda
• 109,000 gross acres / 92,800 net acres
• Over 550 active wells
• Working interests average 92%, net revenue interest (NRI)
averages ~ 85%
averages ~ 85%
Oxy - Shell South Texas Assets Transaction
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• Over 360 Bcfe proven developed reserves
– ~ 840 Bcfe of identified additional resource potential
• Condensate & NGLs have comprised ~ 30% of total revenue
• Lease Operating Expense (LOE) of $0.47-0.74/Mcfe
• Gathering capacity of ~ 500 mmcfe/d
• Aggregate compression capacity ~ 230 mmcfe/d
• Five field areas have cumulatively produced nearly 5 TCF
• Numerous Vicksburg and Frio infill and step-out drilling
opportunities
opportunities
– Vicksburg opportunities in 12,000’ to 17,000’ range, 3 to 7 Bcfe/well
– Frio opportunities at 9,000’ to 12,000’, 2 to 5 Bcfe/well
Oxy - Shell South Texas Assets Transaction
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Houston
Gulf
of
Mexico
Corpus Christi
TEXAS
Mexico
Starr County
Hidalgo County
La Copita /
North Rincon
Lyda
McAllen Ranch
Slick
Ranch
Ranch
Javelina
McAllen Pharr
Rio Grande
City
Edinburg
Oxy - Shell South Texas Assets Transaction
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• Purchasing from a private company all rights, title and interest
in ~ 180,000 contiguous net acres in North Dakota within the
southern extents of the Bakken and Three Forks Formations
in ~ 180,000 contiguous net acres in North Dakota within the
southern extents of the Bakken and Three Forks Formations
• The purchase price is approximately $1.4 billion
• Operated working interests average 63% with average net
revenue interest (NRI) of ~83%
revenue interest (NRI) of ~83%
• Acreage is located in Dunn, Billings and Stark Counties, ND
• Total of 44 operated and 17 non-operated wells producing
approximately 5,500 boe/d from Bakken and Madison
Formations
approximately 5,500 boe/d from Bakken and Madison
Formations
– Currently 5 active drilling rigs operating on acreage with plans to
increase rig count during 2011 to 8 rigs
increase rig count during 2011 to 8 rigs
– Five wells that are awaiting completion
Oxy - North Dakota Assets Transaction
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• Control of 200 operated Drilling Spacing Unit’s (DSU) and
interest in 110 non-operated DSU’s; over 98% of DSU’s are
1280 acre units
interest in 110 non-operated DSU’s; over 98% of DSU’s are
1280 acre units
• Prospective across entire acreage position for Three Forks
and deeper objectives
and deeper objectives
• Net risked reserve potential in excess of 250 mmboe from the
Middle Bakken and Upper Three Forks Formations
Middle Bakken and Upper Three Forks Formations
• Combined with existing Oxy assets in the Williston Basin, the
acquisition will result in total interest in over 200,000 net acres
and 50 operated wells producing over 6,000 boe/d
acquisition will result in total interest in over 200,000 net acres
and 50 operated wells producing over 6,000 boe/d
• Oxy expects to grow production in the Williston Basin to at
least 30,000 boe/d over the next five years
least 30,000 boe/d over the next five years
Oxy - North Dakota Assets Transaction
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NORTH DAKOTA
South Coteau
Nesson
Anticline
Elm Coulee
Field
Parshall-
Sanish
Fields
Russian Creek
Burke
Ward
McLean
Mercer
Stark
Oliver
Williams
Divide
Roosevelt
McKenzie
Mountrail
Dunn
Billings
Renville
Richland
Morton
MT
ND
Dawson
Golden
Valley
Other Notable Areas of
Williston Basin Production
Williston Basin Production
Other Oxy Operated
Acreage
Acreage
Oxy Acquisition Area
Burleigh
Sheridan
McHenry
Bottineau
Bismarck
SD
Oxy North Dakota - Williston Basin
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Portions of this presentation contain forward-looking statements and involve risks and uncertainties that could
materially affect expected results of operations, liquidity, cash flows and business prospects. Factors that could
cause results to differ materially include, but are not limited to: global commodity pricing fluctuations; supply and
demand considerations for Occidental’s products; not successfully completing, or any material delay of, any
development of new fields, expansion projects, capital expenditures, efficiency-improvement projects, acquisitions or
dispositions; potential failure to achieve expected production from existing and future oil and gas development
projects; exploration risks such as drilling unsuccessful wells; any general economic recession or slowdown
domestically or internationally; higher-than-expected costs; potential liability for remedial actions under existing or
future environmental regulations and litigation; potential liability resulting from pending or future litigation; general
domestic and international political conditions; potential disruption or interruption of Occidental’s production or
manufacturing or damage to facilities due to accidents, chemical releases, labor unrest, weather, natural disasters,
political events or insurgent activity; failure of risk management; changes in law or regulations; or changes in tax
rates. Finding and Development costs calculations inherently compare costs and reserves from separate periods.
The United States Securities and Exchange Commission (SEC) permits oil and natural gas companies, in their SEC
filings, to disclose only reserves anticipated to be economically producible, as of a given date, by application of
development projects to known accumulations. We use certain terms in this presentation, such as reported reserves,
EUR, expected ultimate recovery, potential reserves, discovery volumes, recoverable resources and oil in place, that
the SEC’s guidelines strictly prohibit us from using in our SEC filings. 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. U.S. investors are urged to consider carefully the disclosures in our 2009 Form 10-K, available
through the following toll-free number 1-888-OXYPETE (1-888-699-7383) or on the internet at http://www.oxy.com.
You also can obtain a copy form the SEC by calling 1-800-SEC-0330. We post or provide links to important
information on our website including investor and analyst presentations, certain board committee charters and
information that SEC requires companies and certain of its officers and directors to file or furnish. Such information
may be found in the “Investor Relations” and “Social Responsibility” portions of the website.
materially affect expected results of operations, liquidity, cash flows and business prospects. Factors that could
cause results to differ materially include, but are not limited to: global commodity pricing fluctuations; supply and
demand considerations for Occidental’s products; not successfully completing, or any material delay of, any
development of new fields, expansion projects, capital expenditures, efficiency-improvement projects, acquisitions or
dispositions; potential failure to achieve expected production from existing and future oil and gas development
projects; exploration risks such as drilling unsuccessful wells; any general economic recession or slowdown
domestically or internationally; higher-than-expected costs; potential liability for remedial actions under existing or
future environmental regulations and litigation; potential liability resulting from pending or future litigation; general
domestic and international political conditions; potential disruption or interruption of Occidental’s production or
manufacturing or damage to facilities due to accidents, chemical releases, labor unrest, weather, natural disasters,
political events or insurgent activity; failure of risk management; changes in law or regulations; or changes in tax
rates. Finding and Development costs calculations inherently compare costs and reserves from separate periods.
The United States Securities and Exchange Commission (SEC) permits oil and natural gas companies, in their SEC
filings, to disclose only reserves anticipated to be economically producible, as of a given date, by application of
development projects to known accumulations. We use certain terms in this presentation, such as reported reserves,
EUR, expected ultimate recovery, potential reserves, discovery volumes, recoverable resources and oil in place, that
the SEC’s guidelines strictly prohibit us from using in our SEC filings. 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. U.S. investors are urged to consider carefully the disclosures in our 2009 Form 10-K, available
through the following toll-free number 1-888-OXYPETE (1-888-699-7383) or on the internet at http://www.oxy.com.
You also can obtain a copy form the SEC by calling 1-800-SEC-0330. We post or provide links to important
information on our website including investor and analyst presentations, certain board committee charters and
information that SEC requires companies and certain of its officers and directors to file or furnish. Such information
may be found in the “Investor Relations” and “Social Responsibility” portions of the website.
Cautionary Statement
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Occidental Petroleum Corporation
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