Occidental Petroleum Corporation

Good morning and welcome to the Occidental's first quarter 2019 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your touch-tone phone. To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to Jeff Alvarez, Vice President of Investor Relations. Please go ahead.

Thank you, Allison. Good morning, everyone, and thank you for participating in Oxfam Petroleum's first quarter 2019 conference call. On the call with us today, are Vicki Holub, President and Chief Executive Officer, Cedric Berger, Senior Vice President and Chief Financial Officer, Ken Dillon, President, International Oil and Gas Operations, and Oscar Brown, Senior Vice President, Strategy, Business Development, and Integrated Supply. In just a moment, I will turn the call over to Vicki. As a reminder, today's conference call contains certain projections and other forward-looking statements within the meaning of the federal securities laws. These statements are subject to risks and uncertainties that may cause actual results to differ materially from those expressed or implied in these statements, as more fully described in our cautionary statement regarding forward-looking statements on slide two. Our earnings press release, the investor relations supplemental schedules, and our non-gap-to-gap reconciliations and the conference call presentation slides can be downloaded off our website, at www.oxy.com. I'll now turn the call over to Vicki. Vicki, please go ahead.

Thank you, Jeff, and good morning, everyone. I'd like to start by recognizing that many would like to discuss our proposal to acquire Anadarko, which we will address. But first, I plan to cover the excellent results we achieved in the first quarter and reiterate that our commitment to our value proposition remains unchanged. Creating shareholder value continues to be our number one priority. Our integrated business is delivering outstanding results, and we continue to be a leader in each area we operate. We are dedicated to returning cash to our shareholders, delivering industry-leading returns, and executing our strategy. During the first quarter, we did just that. We returned $800 million through dividends and share repurchases, driven by excellent results from all three of our business segments. Since 2002, we've returned $34 billion of capital to our shareholders, and our assets continue to generate free cash flow for future distributions. In the Permian Basin, our operational expertise and deep knowledge of the subsurface is unmatched, and the well productivity data is clear. We get more oil from our wells in the short and long term, which generates high value and low development costs. We are rapidly advancing our geomechanical and flow unit modeling, driving breakthroughs in completion design and well spacing, and mitigating parent-child impacts. Oxy has delivered 23 of the top 100 horizontal wells in the Permian, which is the most of any operator, while only drilling 4% of the total wells over the same time period. We also continue to delineate our acreage and new benches for future development with outstanding results from five different benches in New Mexico. Our leadership extends far beyond the Permian. We have a strong international reputation as a low-cost operator, maximizing the value of new and old fields, and delivering major projects around the world on time and on budget. Over the last year, we grew our position in Oman, the UAE, and Colombia by a total of over 6.5 million gross acres, and these assets will greatly enhance our value proposition for shareholders. We recently implemented a new completion design in the Middle East, which is generating more oil and improving returns for Oxy and our partners. We're excited about the impact these breakthroughs will have on our future development plan. Our unique low-carbon ventures business is also making progress on reducing our carbon footprint by advancing technologies and policies that support the capture and sequestration of anthropogenic CO2, which will reduce carbon emissions while enhancing the economic development of our reserves. We're currently working to advance a Midwest industrial carbon capture strategy that can capture a significant amount of industrial emissions and reduce our total carbon impact through the use of this CO2 in our EOR operations. This project will take partnership and advancement of technology, but we are motivated and have begun engagement to help promote this opportunity. We look forward to sharing more details on this project in the future. We also plan to release our 2019 climate report this month, which provides further details on the significant progress we've made on our long-term climate and sustainability strategy. On slide five, I want to highlight how our value proposition delivered leading return on and return of capital in 2018. Our ability to achieve best-in-class returns through investing in our high-quality assets was evident as we generated return on capital employed of 14% and cash return on capital employed of 27%, both significantly higher than 2017 and upper quartile performance versus our peer group. This was also the highest return on capital employed that we've generated since 2011. In addition, we return more than $3.6 billion to shareholders through our sector-leading dividend and share repurchases. No other company in our peer group has such a consistent record of providing a high return of capital to shareholders. These achievements reflect our commitment to our sustainable value proposition, the strength of our integrated business model, the high quality of our assets, and the incredible performance of our employees. After we have finished our review of our first quarter, we'll discuss the acquisition, so now I'll turn the call to Cedric.