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Oil & Gas DCF/NAV Modeling Training

IMPORTANT: Before you begin - set Excel to the following settings:
Excel 1997-2003

Excel 2007/2010/2013

1. Tools ---> Options ---> Calculation Tab ---> Set calculation to automatic except tables

1. Office Button ---> Excel Options ---> Formulas Tab ---> Set calculation to automatic except tables

2. Tools ---> Options ---> Calculation Tab ---> Set Iterations to 100 (check box)

2. Office Button ---> Excel Options ---> Formulas Tab ---> Set Iterations to 100 (check box)

Copyright Wall Street Prep, Inc.

Financial Statement Model for OXY

General assumptions
Company Name
Latest Fiscal year end (mm/dd/yy)
Current share price

Circularity breaker
Circular reference breaker
Off=1, On=0

OXY
12/31/06
$49.31

Income Statement
Actual

Actual

Actual

Projected Annual Forecast

2009
2010
2011
12/31/09
12/31/10
12/31/11
11,301.0
11,746.4
12,135.7
5,977.8
5,977.8
5,977.8
144.0
144.0
144.0
17,422.7
17,868.1
18,257.5
6,503.2
6,692.7
6,859.5
1,371.0
1,371.0
1,371.0
2,400.0
2,400.0
2,400.0
47.0
47.0
47.0
261.7
285.0
301.7
6,839.8
7,072.5
7,278.3
192.2
152.5
139.5
179.7
179.7
179.7
6,827.2
7,099.6
7,318.5
3,004.0
3,123.8
3,220.1
(111.0)
(111.0)
(111.0)
182.0
182.0
182.0
0.0
0.0
0.0
3,894.2
4,046.8
4,169.3
0.0
0.0
0.0
0.0
0.0
0.0
3,894.2
4,046.8
4,169.3
834.7
834.7
834.7
$4.67
$4.85
$4.99

2004
12/31/04
7,093.0
3,675.0
111.0
10,879.0
4,418.0
936.0
1,251.0
59.0
214.0
4,001.0
260.0
144.0
3,885.0
1,639.0
(75.0)
113.0
0.0
2,284.0
0.0
0.0
2,284.0
802.3
$2.85

2005
12/31/05
9,805.0
4,641.0
151.0
14,597.0
5,425.0
1,324.0
1,422.0
62.0
314.0
6,050.0
293.0
181.0
5,938.0
1,927.0
(73.0)
232.0
0.0
4,170.0
0.0
0.0
4,170.0
818.2
$5.10

2006
12/31/06
12,676.0
4,815.0
170.0
17,661.0
6,284.0
1,371.0
2,042.0
47.0
295.0
7,622.0
291.0
214.0
7,545.0
3,473.5
(111.0)
182.0
0.0
4,142.5
0.0
0.0
4,142.5
860.4
$4.81

2007
12/31/07
10,482.1
5,866.7
144.0
16,492.7
6,078.9
1,371.0
2,400.0
47.0
259.0
6,336.9
229.9
179.7
6,286.7
2,766.1
(111.0)
182.0
0.0
3,591.5
0.0
0.0
3,591.5
834.7
$4.30

2008
12/31/08
10,891.8
5,977.8
144.0
17,013.6
6,340.8
1,371.0
2,400.0
47.0
247.0
6,607.8
222.2
179.7
6,565.3
2,888.7
(111.0)
182.0
0.0
3,747.6
0.0
0.0
3,747.6
834.7
$4.49

5,252.0

7,472.0

9,664.0

8,736.9

9,007.8

9,239.8

9,472.5

42.0%

42.0%

44.0%
2

44.0%

44.0%

44.0%

44.0%

424.0
$0.55

483.0
$0.65
17%

646.0
$0.80
24%

805.7
$0.97
21%

972.1
$1.16
21%

1,172.8
$1.41
21%

2004
Cash and cash equivalents (incl. ST investments)
Accounts receivable
Inventories
Prepaid expenses and other current assets
Long-term receivables
Investments in unconsolidated entities
PP&E, net
Other non-current assets
Total Assets

2005
2,440.0
3,099.0
716.0
682.0
377.0
1,209.0
17,171.0
414.0
26,108.0

2006
1,579.0
3,324.0
825.0
278.0
231.0
1,344.0
24,316.0
458.0
32,355.0

2007
1,897.2
3,104.1
798.1
278.0
231.0
1,526.0
24,840.0
458.0
33,132.4

2008
4,162.1
3,202.2
832.5
278.0
231.0
1,708.0
25,376.0
458.0
36,247.7

Accounts payable
Accrued expenses
Dividends payable
Domestic and foreign income taxes
Other current liabilities (non-debt)
Current portion of long-term debt
Short-term debt
Long-term debt
Deferred and other income taxes
Other non-current liabilities
Total Liabilities

2,046.0
1,569.0
147.0
326.0
138.0
46.0
0.0
2,873.0
970.0
2,621.0
10,736.0

2,263.0
1,575.0
188.0
396.0
131.0
171.0
0.0
2,619.0
2,326.0
3,161.0
12,830.0

2,189.1
1,575.0
234.5
315.4
131.0
10.0
0.0
2,609.0
1,852.3
3,161.0
12,077.3

Minority interest
Common Stock and APIC
Treasury stock (contra account)
Retained earnings
Comprehensive (accumulated) loss
Total Shareholders' Equity

340.0
4,988.0
(8.0)
10,425.0
(373.0)
15,372.0

341.0
7,079.0
(1,481.0)
13,919.0
(333.0)
19,525.0

Total Liabilities + Shareholders' Equity

Balance check

26,108.0
0.0

Oil & Gas

Chemical
Other
Total Revenues
Cost of goods sold
Selling, general, & administrative
Depreciation, depletion, and amortization
Environmental remediation
Exploration expense
EBIT
Interest expense
Interest, dividends, and other income
Pretax income
Taxes
Minority interest in Earnings After Tax (enter as - )
Equity in income of affiliates, after tax (enter as +)
Gain on Lyondell stock issuance
Income from continuing operations
Discontinued operations, net
Cumulative effect of changes in accounting principles
Net income
Diluted shares outstanding
Diluted EPS
EBITDA
Projection assumptions
Marginal Tax rate (%)
Select a case (1-best, 2-base, 3-weak)
Dividends data
Common dividends
Dividends per share
Dividend growth

2012
12/31/12
12,508.4
5,977.8
144.0
18,630.2
7,016.7
1,371.0
2,400.0
47.0
315.7
7,479.7
109.2
179.7
7,550.2
3,322.1
(111.0)
182.0
0.0
4,299.1
0.0
0.0
4,299.1
834.7
$5.15

2013
12/31/13
12,966.7
5,977.8
144.0
19,088.5
7,200.1
1,371.0
2,400.0
47.0
336.9
7,733.5
41.6
179.7
7,871.6
3,463.5
(111.0)
182.0
0.0
4,479.1
0.0
0.0
4,479.1
834.7
$5.37

9,678.3

9,879.7

10,133.5

44.0%

44.0%

44.0%

1,415.0
$1.70
21%

1,707.3
$2.05
21%

2,059.9
$2.47
21%

2,485.3
$2.98
21%

2009
5,705.2
3,279.2
853.8
278.0
231.0
1,890.0
25,897.2
458.0
38,592.3

2010
7,652.8
3,363.0
878.7
278.0
231.0
2,072.0
26,395.3
458.0
41,328.7

2011
9,620.0
3,436.3
900.6
278.0
231.0
2,254.0
26,876.6
458.0
44,054.4

2012
10,825.3
3,506.4
921.2
278.0
231.0
2,436.0
27,343.8
458.0
45,999.7

2013
11,545.3
3,592.7
945.3
278.0
231.0
2,618.0
27,789.9
458.0
47,458.2

2,283.4
1,575.0
282.9
329.3
131.0
695.0
0.0
1,914.0
1,934.4
3,161.0
12,306.1

2,341.9
1,575.0
341.3
342.5
131.0
239.0
0.0
1,675.0
2,011.6
3,161.0
11,818.3

2,410.2
1,575.0
411.8
356.1
131.0
68.0
0.0
1,607.0
2,091.8
3,161.0
11,812.0

2,470.2
1,575.0
496.9
367.1
131.0
644.0
0.0
963.0
2,156.3
3,161.0
11,964.5

2,526.9
1,575.0
599.5
378.7
131.0
947.0
0.0
16.0
2,224.6
3,161.0
11,559.6

2,592.9
1,575.0
723.3
394.9
131.0
0.0
0.0
16.0
2,319.3
3,161.0
10,913.3

452.0
7,079.0
(2,847.7)
16,704.8
(333.0)
21,055.1

563.0
7,079.0
(2,847.7)
19,480.3
(333.0)
23,941.6

674.0
7,079.0
(2,847.7)
22,201.7
(333.0)
26,774.0

785.0
7,079.0
(2,847.7)
24,833.5
(333.0)
29,516.8

896.0
7,079.0
(2,847.7)
27,295.5
(333.0)
32,089.8

1,007.0
7,079.0
(2,847.7)
29,534.8
(333.0)
34,440.1

1,118.0
7,079.0
(2,847.7)
31,528.6
(333.0)
36,544.9

32,355.0
0.0

33,132.4
0.0

36,247.7
0.0

38,592.3
0.0

41,328.7
0.0

44,054.4
0.0

45,999.7
0.0

47,458.2
0.0

2005

2006

2007

2008

2009

2010

2011

2012

2013

77.5

68.7

Balance sheet

Supporting Schedules
Working Capital

2004

1. Grow with revenues (default)

2. Override i: Days of revenues (Avg. collection period)
3. Overide ii: Absolute projection
Accounts receivable

3,324.0

1. Grow with COGS (default)

2. Override i: Inventory Days
3. Overide ii: Absolute projection
Inventories

48.2

3,104.1

3,202.2

3,279.2

3,363.0

3,436.3

3,506.4

3,592.7

47.9
825.0

798.1

832.5

853.8

878.7

900.6

921.2

945.3

1. Grow with SG&A (default)

2. Overide: Absolute projection
Prepaid expenses

278.0

278.0

278.0

278.0

278.0

278.0

278.0

278.0

1. Straight-line (default)
2. Overide: Absolute projection
Long-term receivables

231.0

231.0

231.0

231.0

231.0

231.0

231.0

231.0

1. Grow with COGS (default)

2. Override i. Payables Payment Period
3. Overide ii: Absolute projection
Accounts payable

137.7

131.4
2,263.0

2,189.1

2,283.4

2,341.9

2,410.2

2,470.2

2,526.9

2,592.9

1. Grow with SG&A (default)

2. Overide: Absolute projection
Accrued expenses

1,575.0

1,575.0

1,575.0

1,575.0

1,575.0

1,575.0

1,575.0

1,575.0

1. Grow with taxes (default)

2. Overide: Absolute projection
Taxes payable

396.0

315.4

329.3

342.5

356.1

367.1

378.7

394.9

131.0

131.0

131.0

131.0

131.0

131.0

131.0

131.0

2006
1,473.0
$48.39

2007
1,366.7
$53.23
10.0%
25.7
834.7

2008

2009

2010

2011

834.7

834.7

834.7

834.7

834.7

834.7

1,579.0
489.2
824.6
1,243.6

1,897.2
2,274.9
850.7
3,321.4

4,162.1
2,238.1
871.1
5,529.0

5,705.2
2,186.6
893.4
6,998.4

7,652.8
2,035.2
912.9
8,775.1

9,620.0
1,849.3
931.5
10,537.8

10,825.3
1,667.1
954.4
11,537.9

10.0
2,609.0
1,072.6
0.0

695.0
1,914.0
3,311.4
0.0

239.0
1,675.0
4,834.0
0.0

68.0
1,607.0
6,759.4
0.0

644.0
963.0
8,707.1
0.0

947.0
16.0
9,893.8
0.0

0.0
16.0
10,590.9
0.0

8.5%
1.5%
229.9
0.0
229.9

8.5%
1.5%
222.2
0.0
222.2

8.5%
1.5%
192.2
0.0
192.2

8.5%
1.5%
152.5
0.0
152.5

8.5%
1.5%
139.5
0.0
139.5

8.5%
1.5%
109.2
0.0
109.2

8.5%
1.5%
41.6
0.0
41.6

2007
3,591.5
2,400.0
(473.7)
259.0
(71.0)
92.3
46.5
5,844.6

2008
3,747.6
2,400.0
82.1
247.0
(71.0)
(24.1)
48.4
6,430.0

2009
3,894.2
2,400.0
77.2
261.7
(71.0)
(26.7)
58.4
6,593.9

2010
4,046.8
2,400.0
80.3
285.0
(71.0)
(26.8)
70.5
6,784.7

2011
4,169.3
2,400.0
64.5
301.7
(71.0)
(24.1)
85.0
6,925.5

2012
4,299.1
2,400.0
68.3
315.7
(71.0)
(22.5)
102.6
7,092.2

2013
4,479.1
2,400.0
94.7
336.9
(71.0)
(28.2)
123.8
7,335.3

Capital Expenditures
Asset Sales/ (Acquisitions)
Other
Cash from investing

(3,383.0)
200.0
0.0
(3,183.0)

(3,383.0)
200.0
0.0
(3,183.0)

(3,383.0)
200.0
0.0
(3,183.0)

(3,383.0)
200.0
0.0
(3,183.0)

(3,383.0)
200.0
0.0
(3,183.0)

(3,383.0)
200.0
0.0
(3,183.0)

(3,383.0)
200.0
0.0
(3,183.0)

Common and preferred dividends

Treasury stock repurchases
Other
Increases / (decreases) in debt
Cash from financing

(805.7)
(1,366.7)
0.0
(171.0)
(2,343.4)

(972.1)
0.0
0.0
(10.0)
(982.1)

(1,172.8)
0.0
0.0
(695.0)
(1,867.8)

(1,415.0)
0.0
0.0
(239.0)
(1,654.0)

(1,707.3)
0.0
0.0
(68.0)
(1,775.3)

(2,059.9)
0.0
0.0
(644.0)
(2,703.9)

(2,485.3)
0.0
0.0
(947.0)
(3,432.3)

318.2

2,264.9

1,543.1

1,947.6

1,967.2

1,205.3

720.1

1. Straight-line (default)
2. Overide: Absolute projection
Other current liabilities (non-debt)
Diluted Shares outstanding
Treasury share repurchases
Expected average share price
Expected rate of return
Shares repurchased
Diluted shares outstanding

2004

802.3

2005
8.0

818.2

Debt
Cash @ beginning of the year (end of last year)
Plus: Free cash flows prior to debt during year
Less: Minimum cash balance
Total cash available for debt paydown / (debt required)

29.3
860.4

% of sales

5.0%

Current portion of long-term debt

Long-term debt
Cash (shortfall) / surplus
Short-term debt

46.0
2,873.0

171.0
2,619.0

0.0

0.0

Interest expense
Interest rate on long-term debt (CP and LT)
Interest rate on short term debt
Interest expense on long-term debt (CP and LT)
Interest expense on short term debt
Total interest expense

8.5%
1.5%

291.0

2012

2013

Cash Flow Statement

2004
Net Income
DD&A
Deferred taxes
Dry hole and impairment expense
Income from equity investments / Minority interest
Working capital
Other
Cash from operations

Total increase/decrease of cash

2005

2006

Discounted Cash Flow Model for OXY

General assumptions
Valuation / deal date
Last fiscal year end date
Stub year fraction
Current Share Price
Weighted average cost of capital:

3/31/07
12/31/06
75.3%
$49.31
10.0%

Free cash flow buildup

Total Revenues
EBITDA
EBIT
Tax rate
EBIAT
DD&A
Deferred tax liabilities
Exploration expense (dry hole)
Working capital (increases) / decreases
Capital expenditures (net of asset sales)
Unlevered free cash flows
Discount factor
Midyear adjustment factor
Present value of free cash flows
Sum of present values of FCFs

2007
12/31/07
16,492.7
8,736.9
6,336.9
44.0%
3,548.6
2,400.0
(473.7)
259.0
92.3
(3,183.0)
1,991.5
0.931
1.037
1,921.3
16,953.4

Terminal value

2008
12/31/08
17,013.6
9,007.8
6,607.8
44.0%
3,700.4
2,400.0
82.1
247.0
(24.1)
(3,183.0)
3,222.4
0.846
1.049
2,859.5

Projected Annual Forecast

2009
2010
2011
12/31/09
12/31/10
12/31/11
17,422.7
17,868.1
18,257.5
9,239.8
9,472.5
9,678.3
6,839.8
7,072.5
7,278.3
44.0%
44.0%
44.0%
3,830.3
3,960.6
4,075.8
2,400.0
2,400.0
2,400.0
77.2
80.3
64.5
261.7
285.0
301.7
(26.7)
(26.8)
(24.1)
(3,183.0)
(3,183.0)
(3,183.0)
3,359.5
3,516.0
3,634.9
0.769
0.699
0.636
1.049
1.049
1.049
2,710.2
2,578.6
2,423.4

2012
12/31/12
18,630.2
9,879.7
7,479.7
44.0%
4,188.6
2,400.0
68.3
315.7
(22.5)
(3,183.0)
3,767.1
0.578
1.049
2,283.3

2013
12/31/13
19,088.5
10,133.5
7,733.5
44.0%
4,330.8
2,400.0
94.7
336.9
(28.2)
(3,183.0)
3,951.2
0.525
1.049
2,177.1

Equity value calculations

Growth in perpetuity method

Long term growth rate
Free cash flow (t+1)
Terminal value
Mid-year adjusted terminal value
Present value of terminal value
Enterprise value

0.0%
3,951.2
39,512.0
41,440.5
21,771.2
38,724.6

Exit multiple method

Exit EV / EBITDA multiple
LTM EBITDA at end of projection period

6.0x
10,133.5

Exit EV / DACF multiple

LTM DACF at end of projection period

10.0x
3,951.2

Exit EV / daily production ($/boe/d)

LTM daily production (Mboe/d) at end of projectio

$50,000
773.2

Terminal value - Exit EV / EBITDA multiple

Terminal value - Exit EV / DACF multiple
Terminal value - Exit EV / daily production ($/boe/

60,801.1
39,512.0
38,658.9

Enterprise value
Calculation of net debt:
Current portion of long-term debt
Short term debt
Long term debt
Minority interest
Less: Excess cash
Less: Equity investments
Net debt
Equity value
Shares outstanding
Equity value / share

48,895.9
171.0
0.0
2,619.0
341.0
(1,579.0)
(1,344.0)
208.0
48,687.9
841.8
$57.84

Shares Outstanding Worksheet

EV/EBITDA multiple
EV/DACF multiple
EV/production

1
2
3

Exit multiple method to use

Terminal value
Present value of terminal value
Enterprise value

60,801.1
31,942.5
48,895.9

Select a terminal value method

Perpetual growth = 1 / Exit multiple = 2
Enterprise value
Terminal value as percent of total value

2
48,895.9
65.3%

Basic Shares Outstanding :

Current Share Price:
Options / Warrants Data
# of options
$ strike
Batch 1
6.537
$21.23
Batch 2
Batch 3
Batch 4
Batch 5
Batch 6
Total in-the-$ options:
Total $ proceeds:
Treasury stock method? (y/n)
Total shares repurchased:
Basic shares outstanding
New shares from options:
Total Shares Outstanding:

838.10
$49.31
# In-the-$
6.537
0.000
0.000
0.000
0.000
0.000
6.537
$138.8
y
2.8
838.1
3.7
841.8

Analysis of WACC
Cost of debt
Cost of debt
Marginal tax rate
Cost of debt after tax shield

Capital structure
5.2%
44.0%
2.9%

Cost of equity
Risk-Free Rate (rf)
Market Risk Premium (rm-rf)
Raw (observed) beta
Cost of equity using relevered industry beta

Current capital structure

Net debt
Equity
Total

4.7%
6.0%
0.79
9.2%

Market value
208.0
41,510.3
41,718.3

% Weight
0.5%
99.5%

Target capital structure

override

Weighted average cost of capital

Weighted average cost of capital:

% Weight
0.5%
99.5%

9.2%

Industry beta calculation

Comps

OXY
COP
HES
MRO

Raw beta

Share price

Shares

Market cap.

Debt

D/E

0.79
0.85
0.78
0.75

$49.31
$68.35
$55.47
$98.83

841.8
1,673.6
319.7
347.9

41,510.3
114,391.8
17,735.9
34,386.7
208,024.6

208.0
26,317.0
3,389.0
5,947.0

0.50%
23.01%
19.11%
17.29%

Summary DCF Output

Equity value per share at various exit EBITDA mu<-- Exit multiple method must be selected
Equity value / share
$57.84
6.0x
7.0x
8.0x
WACC of 12.0%
$52.36
$57.96
$63.56
11.0%
55.01
60.96
66.91
10.0%
57.84
64.16
70.48
9.0%
60.86
67.58
74.31
8.0%
64.08
71.24
78.40

9.0x
$69.16
72.86
76.81
81.03
85.56

10.0x
$74.76
78.81
83.13
87.76
92.72

Equity / share at perpetual growth rate sensitivit<-- Growth in perpetuity method must be selected
Equity value / share
$57.84
0.0%
1.0%
1.5%
WACC of 12.0%
$52.36
$52.36
$52.36
11.0%
$55.01
$55.01
$55.01
10.0%
$57.84
$57.84
$57.84
9.0%
$60.86
$60.86
$60.86
8.0%
$64.08
$64.08
$64.08

2.0%
$52.36
$55.01
$57.84
$60.86
$64.08

2.5%
$52.36
$55.01
$57.84
$60.86
$64.08

Tax rate

44.00%
45.00%
55.65%
44.79%
Average:

Unl. Beta

Weigh. Beta

Relev. Beta

0.79
0.75
0.72
0.68
0.74

0.16
0.41
0.06
0.11
0.75

0.75

Net Asset Value (NAV) for OXY

E&P
Total development costs
% development/year
Oil decline/year
Natural gas decline/year

6,859.0
20%
2%
3%

Reserves
Bbbls
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040

2,263.7
2,094.4
1,918.8
1,736.2
1,547.6
1,353.0
1,152.0
944.0
740.2
540.5
344.7
152.9
-

Oil
Production
MMbbls

169.3
175.7
182.6
188.5
194.6
201.0
208.0
203.8
199.7
195.7
191.8
152.9
-

Price
$/bbl

$50.72
$50.74
$50.77
$50.79
$50.81
$50.84
$50.86
$60.00
$60.00
$60.00
$60.00
$60.00
$60.00
$60.00
$60.00
$60.00
$60.00
$60.00
$60.00
$60.00
$60.00
$60.00
$60.00
$60.00
$60.00
$60.00
$60.00
$60.00
$60.00
$60.00
$60.00
$60.00
$60.00
$60.00

Natural Gas
Reserves Production Price
Tcf
Bcf
$/MMcf
3,810.0
3,511.0
3,189.9
2,854.7
2,474.2
2,071.1
1,656.1
1,210.7
778.7
359.6
-

299.0
321.1
335.2
380.5
403.1
415.0
445.4
432.0
419.1
359.6
-

$6.34
$6.16
$6.06
$5.71
$5.57
$5.52
$5.36
$7.00
$7.00
$7.00
$7.00
$7.00
$7.00
$7.00
$7.00
$7.00
$7.00
$7.00
$7.00
$7.00
$7.00
$7.00
$7.00
$7.00
$7.00
$7.00
$7.00
$7.00
$7.00
$7.00
$7.00
$7.00
$7.00
$7.00

Total
NPV

2,263.7

3,810.0

$34,599

Acreage

U.S.
Latin America
Eastern Hemisphere
Total
Total E&P

MM Acres Value ($MM)

1.1
$400
14.5
$900
28.7
$1,600
44.3
$2,900

Implied
value
($/acre)
$358
$62
$56
$476

$37,499

Chemicals
2007 EBITDA
Target EV/EBITDA
Estimated value

880.0
7.5x
6,600.0

EV

$44,099

Current portion of long-term debt

Short-term debt
Long-term debt
Minority interest
Cash & Investments
Equity investments
Net Debt

171.0
0.0
2,619.0
341.0
2,923.0
1,344.0
208.0

Equity Value
Shares outstanding
Share price

43,890.9
841.8
$52.14

Asset-Based Valuation for OXY

E&P
Proved reserves
Unproved reserves

24,610.0
1,759.0

MM Acres Value ($MM)

Implied
value
($/acre)

U.S.
Latin America
Eastern Hemisphere
Total
Chemicals
2007 EBITDA
Target EV/EBITDA
Estimated value
Cash & Investments
Working capital (excl. cash)
Equity investments
Other assets
EV
Current portion of long-term debt
Short-term debt
Long-term debt
Minority interest
Cash & Investments
Equity investments
Total non-equity claims

1.1
14.5
28.7
44.3

880.0
7.5x
6,600.0
2,923.0
424.0
458.0
39,674.0
#REF!
#REF!
#REF!
341.0
1,579.0
1,344.0
#REF!

Equity Value

#REF!

Shares outstanding

841.8

Share price

#REF!

$400
$900
$1,600
$2,900

$358
$62
$56
$476

Oil
$MM

$8,585.0
8,914.8
9,270.6
9,574.6
9,889.7
10,217.4
10,578.3
12,229.1
11,984.5
11,744.8
11,509.9
9,174.5
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###

Revenues
Natural Gas
$MM

$1,897.1
1,977.0
2,030.4
2,171.8
2,246.0
2,291.0
2,388.5
3,024.2
2,933.5
2,517.4
-

Total
$MM

$10,482.1
10,891.8
11,301.0
11,746.4
12,135.7
12,508.4
12,966.7
15,253.3
14,918.0
14,262.2
11,509.9
9,174.5
-

Development Total Pre-Tax Tax

After-Tax
Production Costs
Costs
Cash Flows Rate Cash Flows
$/boe
$MM
$MM
$MM
%
$MM

$11.24
$11.48
$11.71
$11.84
$12.03
$12.24
$12.37
$12.00
$12.00
$12.00
$12.00
$12.00
$12.00
$12.00
$12.00
$12.00
$12.00
$12.00
$12.00
$12.00
$12.00
$12.00
$12.00
$12.00
$12.00
$12.00
$12.00
$12.00
$12.00
$12.00
$12.00
$12.00
$12.00
$12.00

$2,463.2
2,630.7
2,793.1
2,982.6
3,149.4
3,306.6
3,490.0
3,309.9
3,235.0
3,068.2
2,302.0
1,834.9
-

$1,371.8
1,371.8
1,371.8
1,371.8
1,371.8

$6,647.1
6,889.4
7,136.1
7,392.0
7,614.5
9,201.8
9,476.8
11,943.4
11,683.0
11,194.0
9,207.9
7,339.6
-

38%
38%
39%
40%
40%
41%
41%
40%
40%
40%
40%
40%
40%
40%
40%
40%
40%
40%
40%
40%
40%
40%
40%
40%
40%
40%
40%
40%
40%
40%
40%
40%
40%
40%

$4,134.4
4,243.9
4,353.2
4,471.5
4,562.1
5,455.5
5,556.2
7,166.1
7,009.8
6,716.4
5,524.8
4,403.7
-

147,149.9

34,565.5

6,859.0

105,725.4

63,597.5

Production Profile for OXY

Production assumptions
Conversion factor

United States
Crude oil & liquids (Mbbls/d)
California
Permian
Other
Total Crude Oils

6
Actual
2004

Actual
2005

Actual
2006

78
154
22
254

76
161
16
253

86
167
15
268

Crude oil & liquids - (Decline)/Growth

California
Permian
Other
Total Crude Oils
Natural gas (MMcf/d)
California
Hugoton
Permian
Other
Total natural gas

(2.6%)
4.5%
(27.3%)
(0.4%)

13.2%
3.7%
(6.3%)
5.9%

2007

86
172
15
273

0.0%
3.0%
0.0%
1.9%

2008

###
177
###
278

0.0%
3.0%
0.0%
1.9%

2012

2013

85
182
15
283

84
187
15
286

83
192
15
289

81
196
15
292

79
199
15
294

(1.0%)
3.0%
0.0%
1.6%

(1.0%)
2.5%
0.0%
1.3%

(2.0%)
2.5%
0.0%
1.0%

(2.0%)
2.0%
0.0%
0.8%

(2.0%)
2.0%
0.0%
0.8%

253
151
212
7
623

251
155
218
7
632

246
160
225
7
638

241
165
232
7
644

236
170
239
7
651

386
1.5%

392
1.3%

396
1.0%

399
0.8%

402
0.9%

237
127
130
13
507

242
133
170
8
553

256
138
194
7
595

256
142
200
7
605

339

345
2.0%

367
6.4%

374
1.8%

Latin America
Crude oil (Mbbls/d)
Argentina
Colombia
Total

33
33

32
32

33
33
66

35
33
68

36
###
69

38
33
71

40
33
73

42
33
75

44
33
77

46
33
79

Natural gas (MMcf/d)

Argentina
Bolivia
Total

17
17
34

18
18
36

19
19
37

20
20
39

21
21
41

22
22
43

23
23
46

24
24
48

5.0%
5.0%
5.0%

5.0%
5.0%
5.0%

5.0%
5.0%
5.0%

5.0%
5.0%
5.0%

5.0%
5.0%
5.0%

5.0%
5.0%
5.0%

5.0%
5.0%
5.0%

74
2.7%

76
2.8%

78
2.8%

80
2.9%

82
2.9%

85
3.0%

87
3.1%

TOTAL (Mboe/d) - U.S.

% growth

Natural gas - (Decline)/Growth

Argentina
Bolivia
Total
TOTAL (Mboe/d) - Latin America
% growth

381
1.8%

33

32
(3.0%)

Eastern Hemisphere
Crude oil (Mbbls/d)
Oman
Qatar
Pakistan
Russia
Yemen
Libya
Total

13
45
7
29
33
127

17
42
5
28
29
8
129

18
43
4
27
30
23
145

19
45
30
29
123

20
47
###
###
31
36
134

21
50
31
45
146

22
52
31
52
157

23
55
32
59
169

24
58
32
68
182

25
61
32
79
197

Natural gas (MMcfd)

Pakistan
Oman
Qatar
Total

75
55
130

77
44
121

76
30
106

29
150
179

###
27
200
227

26
230
256

24
345
369

23
400
423

22
425
447

21
500
521

2.7% (1.3%)
(20.0%) (31.8%)

(5.0%)

(6.9%) (12.4%)

68.4%

(5.0%)
33.3%
27.2%

(5.0%)
15.0%
12.6%

(5.0%)
50.0%
44.5%

(5.0%)
15.9%
14.6%

(5.0%)
6.3%
5.6%

(5.0%)
17.6%
16.5%

Natural gas - (Decline)/Growth

Pakistan
Oman
Qatar
Total
TOTAL (Mboe/d) - Eastern Hemisphere
% growth
Total
Crude oil (MMbbls/d)
Natural gas (MMcf/d)
Total (BOE) - Worldwide
% growth

72
124.0%

###
146
206
###
615

Projected Annual Forecast

2009
2010
2011

149

149
0.3%

163
9.1%

153
(6.0%)

172
12.3%

189
10.2%

219
15.6%

239
9.5%

256
7.1%

283
10.5%

414
637
520

414
674
526
1.2%

479
735
602
14.3%

464
819
600
(0.2%)

481
880
628
4.6%

500
918
653
4.0%

516
1,042
690
5.6%

533
1,104
717
3.9%

551
1,137
740
3.2%

570
1,220
773
4.5%

E&P Income Statement for OXY

E&P assumptions
Number of days in a year

365

E&P Results
Revenues
Production Costs
Exploration Expense
Depreciation
Other
Pre-Tax
Taxes
Total E&P

2004
6,811
(1,277)
(208)
(988)
(334)
4,004
(1,407)
2,597

2005
9,458
(1,607)
(313)
(1,150)
(422)
5,966
(2,250)
3,716

2006
2007
2008
2009
2010
2011
2012
2013
12,256 10,482 10,892 11,301 11,746 12,136 12,508 12,967
(2,365) (2,463) (2,631) (2,793) (2,983) (3,149) (3,307) (3,490)
(295)
(259)
(247)
(262)
(285)
(302)
(316)
(337)
(1,761) (1,724) (1,779) (1,821) (1,888) (1,919) (1,933) (1,964)
(600)
(559)
(580)
(600)
(627)
(647)
(664)
(688)
7,235
5,478
5,655
5,826
5,964
6,118
6,288
6,488
(2,911) (2,071) (2,172) (2,272) (2,356) (2,452) (2,560) (2,684)
4,324
3,407
3,484
3,554
3,608
3,665
3,728
3,804

Geographical Breakdown
United States:
Revenues
Production Costs
Exploration Expense
Depreciation
Other
Taxes
Total

2004
4,467
(1,016)
(117)
(622)
(226)
(689)
1,797

2005
6,000
(1,311)
(132)
(706)
(291)
(982)
2,578

2006
7,066
(1,717)
(88)
(926)
(410)
(1,151)
2,774

2007
6,720
(1,816)
(90)
(943)
(417)
(1,013)
2,441

2008
6,844
(1,919)
(91)
(960)
(425)
(1,011)
2,437

2009
6,949
(2,019)
(93)
(975)
(432)
(1,006)
2,425

2010
7,040
(2,117)
(94)
(988)
(437)
(998)
2,406

2011
7,113
(2,211)
(95)
(998)
(442)
(987)
2,380

2012
7,171
(2,302)
(96)
(1,006)
(445)
(974)
2,348

2013
7,233
(2,396)
(96)
(1,015)
(449)
(961)
2,316

Latin America
Revenues
Production Costs
Exploration Expense
Depreciation
Other
Taxes
Total

505
(70)
(22)
(44)
(15)
(179)
175

666
(74)
(53)
(55)
(6)
(224)
254

1,358
(280)
(32)
(275)
(47)
(310)
414

1,232
(301)
(33)
(282)
(35)
(249)
332

1,264
(323)
(34)
(290)
(36)
(249)
332

1,298
(346)
(35)
(298)
(37)
(249)
333

1,334
(371)
(36)
(307)
(38)
(249)
333

1,371
(397)
(37)
(316)
(39)
(250)
333

1,411
(424)
(38)
(325)
(40)
(250)
333

1,452
(453)
(39)
(335)
(41)
(250)
333

Eastern Hemisphere
Revenues
Production Costs
Exploration Expense
Depreciation
Other
Taxes
Total

1,839
(191)
(69)
(322)
(93)
(539)
625

2,792
(222)
(128)
(389)
(125)
(1,044)
884

3,832
(368)
(175)
(560)
(143)
(1,450)
1,136

2,530
(346)
(137)
(498)
(106)
(809)
634

2,784
(388)
(122)
(528)
(120)
(911)
714

3,054
(428)
(134)
(547)
(132)
(1,017)
796

3,372
(495)
(155)
(593)
(152)
(1,109)
868

3,652
(541)
(170)
(606)
(167)
(1,216)
952

3,926
(580)
(182)
(602)
(179)
(1,336)
1,047

4,281
(641)
(201)
(614)
(197)
(1,473)
1,154

Production
Crude oil & liquids (Mbbls/d)
United States
Latin America
Eastern Hemisphere
Total Crude & NGL's

2004
254
33
127
414

2005
253
32
129
414

2006
268
66
145
479

2007
273
68
123
464

2008
278
69
134
481

2009
283
71
146
500

2010
286
73
157
516

2011
289
75
169
533

2012
292
77
182
551

2013
294
79
197
570

Natural gas (MMcfd)

United States
Latin America
Eastern Hemisphere
Total

507
130
637

553
121
674

595
34
106
735

605
36
179
819

615
37
227
880

623
39
256
918

632
41
369
1,042

638
43
423
1,104

644
46
447
1,137

651
48
521
1,220

Total Production (MBOED)

Crude Oil & Liquids
Natural Gas
Total

414
106
520

414
112
526

479
123
602

464
137
600

481
147
628

500
153
653

516
174
690

533
184
717

551
190
740

570
203
773

Geographical Basis
United States
Latin America
Eastern Hemisphere

339
33
149

345
32
149

367
72
163

374
74
153

381
76
172

386
78
189

392
80
219

396
82
239

399
85
256

402
87
283

Total
Cost Profile ($/BBL)
United States
Production Costs
Exploration Expense
Depreciation
Other
Taxes

520

526

2004
2005
$8.22 $10.41
$0.95
$1.05
$5.03
$5.60
$1.83
$2.31
28%
28%

602

$0.50
$0.00
$0.00
$0.00
0%

$5.81
$1.83
$3.65
$1.25
51%

$6.34
$4.54
$4.71
$0.51
47%

Total
Revenues
Production Costs
Exploration Expense
Depreciation
Other
Taxes

$3.52
$1.27
$5.93
$1.71
46%

$4.08
$2.35
$7.14
$2.30
54%

$35.87 $49.23
$6.73
$8.36
$1.10
$1.63
$5.20
$5.99
$1.76
$2.20
35%
38%

653

690

717

740

773

$0.50
$0.00
$0.00
$0.00
0%

$0.50
$0.00
$0.00
$0.00
0%

$0.50
$0.00
$0.00
$0.00
0%

$0.50
$0.00
$0.00
$0.00
0%

$0.50
$0.00
$0.00
$0.00
0%

$0.50
$0.00
$0.00
$0.00
0%

$10.70 $11.20 $11.70 $12.20 $12.70 $13.20 $13.70 $14.20

$1.22
$1.22
$1.22
$1.22
$1.22
$1.22
$1.22
$1.22
$10.51 $10.51 $10.51 $10.51 $10.51 $10.51 $10.51 $10.51
$1.80
$1.30
$1.30
$1.30
$1.30
$1.30
$1.30
$1.30
43%
43%
43%
43%
43%
43%
43%
43%

Latin America - Cost Escalations/(Declines)

Production Costs
Exploration Expense
Depreciation
Other
Taxes
Eastern Hemisphere
Production Costs
Exploration Expense
Depreciation
Other
Taxes

628

2006
2007
2008
2009
2010
2011
2012
2013
$12.81 $13.31 $13.81 $14.31 $14.81 $15.31 $15.81 $16.31
$0.66
$0.66
$0.66
$0.66
$0.66
$0.66
$0.66
$0.66
$6.91
$6.91
$6.91
$6.91
$6.91
$6.91
$6.91
$6.91
$3.06
$3.06
$3.06
$3.06
$3.06
$3.06
$3.06
$3.06
29%
29%
29%
29%
29%
29%
29%
29%

U.S. - Cost Escalations/(Declines)

Production Costs
Exploration Expense
Depreciation
Other
Taxes
Latin America
Production Costs
Exploration Expense
Depreciation
Other
Taxes

600

$6.20
$2.95
$9.43
$2.41
56%

$0.50
$0.00
$0.00
($0.50)
0%

$0.50
$0.00
$0.00
$0.00
0%

$0.50
$0.00
$0.00
$0.00
0%

$0.50
$0.00
$0.00
$0.00
0%

$0.50
$0.00
$0.00
$0.00
0%

$0.50
$0.00
$0.00
$0.00
0%

$0.50
$0.00
$0.00
$0.00
0%

$6.20
$2.45
$8.93
$1.91
56%

$6.20
$1.95
$8.43
$1.91
56%

$6.20
$1.95
$7.93
$1.91
56%

$6.20
$1.95
$7.43
$1.91
56%

$6.20
$1.95
$6.93
$1.91
56%

$6.20
$1.95
$6.43
$1.91
56%

$6.20
$1.95
$5.93
$1.91
56%

$55.82 $47.84 $47.52 $47.39 $46.63 $46.35 $46.30 $45.95

$10.77 $11.24 $11.48 $11.71 $11.84 $12.03 $12.24 $12.37
$1.34
$1.18
$1.08
$1.10
$1.13
$1.15
$1.17
$1.19
$8.02
$7.87
$7.76
$7.63
$7.49
$7.33
$7.16
$6.96
$2.73
$2.55
$2.53
$2.52
$2.49
$2.47
$2.46
$2.44
40%
38%
38%
39%
40%
40%
41%
41%

Price Deck for OXY

Select an operating scenario
1 = Best case
2 = Base case
3 = Weak case

2
Actual Actual Actual
2004
2005
2006

Benchmarks
Select a case (1-best, 2-base, 3-weak)
Strong case
Base case
Weak case
North Sea Brent ($/Bbl)
Strong case
Base case
Weak case
West Texas Int.
Strong case
Base case
Weak case
US (NGW) ($/MMcf)

2008

1
2
3
$38.12 $54.42 $65.12

$70.00
$55.00
$40.00
$55.00

$70.00
$55.00
$40.00
$55.00

$70.00
$55.00
$40.00
$55.00

$70.00
$55.00
$40.00
$55.00

1
2
3
$66.11

$70.00
$55.00
$40.00
$55.00

$70.00
$55.00
$40.00
$55.00

$70.00
$55.00
$40.00
$55.00

$70.00
$55.00
$40.00
$55.00

$9.00
$8.00
$7.00
$8.00

$9.00
$8.00
$7.00
$8.00

$9.00
$8.00
$7.00
$8.00

$9.00
$8.00
$7.00
$8.00

$41.30 $56.59

$5.69

$8.34

1
2
3
$6.40

Realized prices
Crude oil & liquids (Mbbls/d)
Select a case (1-best, 2-base, 3-weak)

2004

2005

2006

Strong case
Base case
Weak case
United States
Differential
Strong case
Base case
Weak case
Latin America
Differential
Strong case
Base case
Weak case

Projected Annual Forecast

2009
2010

2007

2007

2008

2009

2010

1
2
3
$37.72 $50.80 $58.13
91%
90%
88%

92%
90%
88%
$50.60
92%

92%
90%
88%
$50.60
92%

92%
90%
88%
$50.60
92%

92%
90%
88%
$50.60
92%

1
2
3
$33.09 $44.79 $52.40
87%
82%
80%

88%
84%
80%
$48.40
88%

88%
84%
80%
$48.40
88%

88%
84%
80%
$48.40
88%

88%
84%
80%
$48.40
88%

1
2
3

95%
93%
91%

95%
93%
91%

95%
93%
91%

95%
93%
91%

Eastern Hemisphere
Differential
Natural Gas ($/MMcf)
Strong case
Base case
Weak case
United States
Differential
Strong case
Base case
Weak case
Latin America
Differential
Strong case
Base case
Weak case
Eastern Hemisphere
Differential

Reference prices
World Wide Oil
World Wide Gas

$34.88 $49.88 $61.58

92%
92%
95%

$52.25
95%

$52.25
95%

$52.25
95%

$52.25
95%

1
2
3
$6.51
102%

95%
90%
85%
$7.60
95%

95%
90%
85%
$7.60
95%

95%
90%
85%
$7.60
95%

95%
90%
85%
$7.60
95%

1
2
3
$2.00
31%

35%
30%
25%
$2.80
35%

35%
30%
25%
$2.80
35%

35%
30%
25%
$2.80
35%

35%
30%
25%
$2.80
35%

1
2
3
$2.25
35%

35%
30%
25%
$2.80
35%

35%
30%
25%
$2.80
35%

35%
30%
25%
$2.80
35%

35%
30%
25%
$2.80
35%

$35.79 $49.18 $56.57

$4.56
$5.98
$5.50

$50.72
$6.34

$50.74
$6.16

$50.77
$6.06

$50.79
$5.71

$5.35
94%

$0.00

$2.94
52%

$7.11
85%

$0.00

$2.44
29%

Data tables

2007 Brent Price

$4.30
$50.00
$55.00
$60.00
$65.00
$70.00
$75.00

2007 Natural Gas Benchmark Price

$6.00
$7.00
$8.00
$9.00 $10.00
#REF! #REF!
#REF!
#REF!
#REF!
#REF! #REF!
#REF!
#REF!
#REF!
#REF! #REF!
#REF!
#REF!
#REF!
#REF! #REF!
#REF!
#REF!
#REF!
#REF! #REF!
#REF!
#REF!
#REF!
#REF! #REF!
#REF!
#REF!
#REF!

ted Annual Forecast

2011

2012

2013

$70.00
$55.00
$40.00
$55.00

$70.00
$55.00
$40.00
$55.00

$70.00
$55.00
$40.00
$55.00

$70.00
$55.00
$40.00
$55.00

$70.00
$55.00
$40.00
$55.00

$70.00
$55.00
$40.00
$55.00

$9.00
$8.00
$7.00
$8.00

$9.00
$8.00
$7.00
$8.00

$9.00
$8.00
$7.00
$8.00

2011

2012

2013

92%
90%
88%
$50.60
92%

92%
90%
88%
$50.60
92%

92%
90%
88%
$50.60
92%

88%
84%
80%
$48.40
88%

88%
84%
80%
$48.40
88%

88%
84%
80%
$48.40
88%

95%
93%
91%

95%
93%
91%

95%
93%
91%

$52.25
95%

$52.25
95%

$52.25
95%

95%
90%
85%
$7.60
95%

95%
90%
85%
$7.60
95%

95%
90%
85%
$7.60
95%

35%
30%
25%
$2.80
35%

35%
30%
25%
$2.80
35%

35%
30%
25%
$2.80
35%

35%
30%
25%
$2.80
35%

35%
30%
25%
$2.80
35%

35%
30%
25%
$2.80
35%

$50.81
$5.57

$50.84
$5.52

$50.86
$5.36

Morgan Stanley
Douglas Terreson, CFA
(713) 512-4480

OXY -NYSE

CAPEX for OXY

Capital expenditures
Actual
Oil & gas
Chemicals
Other
Total

2004
1,526
155
39
1,720

DD&A
E&P
Chemicals
Other
Total

989
243
19
1,251

PP&E
Capital expenditures
Asset sales
DD&A
Exploration expense
PP&E

Actual
2005
2,137
173
14
2,324

1,151
251
20
1,422

2,324
(185.0)
(1,422)
(313.0)
17,171.0

Actual
2006
2,721
251
33
3,005

1,761
260
21
2,042

3,005
(982.0)
(2,042)
(295.0)
24,316.0

2007
3,200
150
33
3,383

2008
3,200
150
33
3,383

Projected Annual Forecast

2009
2010
2011
3,200
3,200
3,200
150
150
150
33
33
33
3,383
3,383
3,383

2012
3,200
150
33
3,383

2013
3,200
150
33
3,383

2,123
256
21
2,400

2,123
256
21
2,400

2,123
256
21
2,400

2,123
256
21
2,400

2,123
256
21
2,400

2,123
256
21
2,400

3,383
(200.0)
(2,400)
(301.7)
26,876.6

3,383
(200.0)
(2,400)
(315.7)
27,343.8

3,383
(200.0)
(2,400)
(259.0)
24,840.0

3,383
(200.0)
(2,400)
(247.0)
25,376.0

3,383
(200.0)
(2,400)
(261.7)
25,897.2

2,123
256
21
2,400

3,383
(200.0)
(2,400)
(285.0)
26,395.3

3,383
(200.0)
(2,400)
(336.9)
27,789.9

Morgan Stanley
Douglas Terreson, CFA
(713) 512-4480

OXY - NYSE

Chemicals for OXY

Actual
2004
3,675
3,018
82.1%
657
17.9%

Actual
2005
4,641
3,783
81.5%
858
18.5%

Actual
2006
4,815
3,654
75.9%
1,161
24.1%

2007
5,867
4,987
79.8%
880
15.0%

DD&A
EBIT
Interest Expense
Earnings Before Tax
Taxes (32%)
Total Income

243
414
0
414
132
282

251
607
0
607
194
413

260
901
0
901
288
613

256
624
0
624
200
424

% of Sales
Base Chemicals
Vinyls
Performance Chemicals

33%
57%
10%

42%
50%
8%

48%
48%
4%

1,213
2,095
368

1,949
2,321
371

2,311
2,311
193

($ Million)
Total Revenues
Total Operating Expenses
% of Sales
Total EBITDA
EBITDA Margin

Sales Contribution by Product ($MM)

Base Chemicals
Vinyls
Performance Chemicals

Page 18

Projected Annual Forecast

2008
2009
2010
2011
2012
5,978 5,978 5,978 5,978 5,978
5,081 5,081 5,081 5,081 5,081
79.8% 79.8% 79.8% 79.8% 79.8%
897
897
897
897
897
15.0% 15.0% 15.0% 15.0% 15.0%
256
641
0
641
205
436

256
641
0
641
205
436

256
641
0
641
205
436

256
641
0
641
205
436

256
641
0
641
205
436

2013
5,978
5,081
79.8%
897
15.0%
256
641
0
641
205
436

Reserves

Reserves Profile for OXY

United States

Latin America

Net Proved Reserves - Oil (MMbbls)

Reserves at Begining of Year

FY04
1,500

FY05
1,494

FY06
1,636

FY04

Middle East

46

FY05
67

FY06
50

FY04
326

Other
FY05
322

FY06
296

FY04
60

Changes attributable to:

Revisions

(4)

29

(28)

(1)

(13)

10

16

(34)

39

Improved Recovery
Extensions & discovery

72
9

98
7

71
3

6
-

6
3

33
7

10
3

3
36

14
14

1
2

10
-

108
(8)

98
(4)

29
-

152
-

4
-

4
-

(4)
-

Production
Reserves at End of Year

Purchases
Sales

(93)
1,494

(92)
1,636

(98)
1,678

(13)
67

(13)
50

(26)
226

(33)
322

(35)
296

(40)
327

(12)
49

Reserves w/o Sale/Purchases

1,484

1,536

1,584

38

50

74

322

292

323

53

Developed Reserves:
Percent Developed

1,260
84.4%

1,336
81.7%

1,396
83.2%

43
64.2%

44
88.0%

140
61.9%

208
64.6%

174
58.8%

249
76.1%

43
87.8%

FY04
1,826

FY05
2,101

FY06
2,338

Net Proved Reserves of Natural Gas (Bcf)

Reserves at Begining of Year

FY04

FY05

FY06

FY04
654

FY05
768

FY06
1,051

FY04
114

Changes attributable to:

Revisions

94

53

(132)

45

134

(32)

59

180
181

129
96

123
58

331

7
-

5
10

7
(1)

164
(3)

274
(2)

161
-

Production
Reserves at End of Year

(186)
2,101

(202)
2,338

(217)
2,442

(12)
194

(20)
768

(16)
1,051

(11)
1,106

(27)
106

Reserves w/o Sale/Purchases

2,095

2,177

2,170

33

768

1,051

1,106

106

Developed Reserves:
Percent Developed

1,644
78.3%

1,846
79.0%

1,953
80.0%

100
13.0%

73
6.9%

560
50.6%

Improved Recovery
Extensions & discovery
Purchases
Sales

Barrels of Equivilant (BOE) Reserves

Reserves at Begining of Year
Changes attributable to:

FY04
1,803.9

Revisions

FY05
1,843.7

FY06
2,025.4

FY04

FY05

FY06

FY04

FY05

FY06

FY04

46.0

67.0

50.0

435.0

450.0

471.2

79.0

11.7

37.8

(50.0)

(1.0)

(13.0)

17.5

38.3

(39.3)

48.8

2.7

102.0
39.2

119.5
23.0

91.5
12.7

6.0
-

6.0
3.0

33.0
7.0

10.0
3.0

3.0
91.2

15.2
14.0

1.8
3.7

11.2
(0.2)

135.3
(8.5)

143.7
(4.3)

29.0
-

178.8
-

4.0
-

4.0
-

(4.0)
-

(124.0)
1,843.7

(126.0)
2,024.9

(134.2)
2,084.7

(13.0)
67.0

(13.0)
50.0

(28.0)
258.3

(36.3)
450.0

(37.7)
471.2

(41.8)
511.3

(16.5)
66.7

Reserve Life, years

New Reserves *

14.9
164.0

16.1
315.7

15.5
197.8

5.2
34.0

3.8
(4.0)

9.2
236.3

12.4
51.3

12.5
58.8

12.2
82.0

4.0
4.2

New Reserves, plus sales

New Reserves - Sales - Purchases

163.8
152.8

307.2
180.3

193.5
54.2

34.0
5.0

(4.0)
(4.0)

236.3
57.5

51.3
51.3

58.8
54.8

82.0
78.0

4.2
8.2

Improved Recovery
Extensions & discovery
Purchases
Sales
Production
Reserves at End of Year

Page 19

Reserves

Cost Incurred (in millions)

Exploration
Property acq.
Development
Total Costs

31

39

40

47

69

61

80

47

177

(12)

47
581

1,795
942

2,471
1,344

94
156

142

3,063
320

25
726

381
834

504
792

11

659

2,776

3,855

297

211

3,444

831

1,262

1,473

(1)

$4.02

$8.79

$19.49

$8.74

$14.57

$16.19

$21.45

$17.96

($0.24)

D/F&D
Value Ratios ($/BOE)
All Sources - No Sales

Average Cost/BOE - 1 Year

3-Year Average

($52.75)

$10.76

$14.84

$18.56

Only Exp & Dev

Average Cost/BOE - 1 Year

3-Year Average

$4.00

$5.44

$25.55
$7.69

$40.60

($52.75)

$6.63
$13.59

$15.70

$16.07

$12.42
$14.42

($0.12)

All Sources (Incl. S and P)

Average Cost/BOE - 1 Year

3-Year Average

$4.02

$9.04

$19.92
$10.97

$8.74

($52.75)

$14.57
$14.84

$16.19

$21.45

$17.96
$18.56

($0.24)

144%
173%

262%

-31%

844%
493%

141%

156%

196%
166%

25%

40%

38%

-31%

205%

141%

146%

186%

49%

Production Replacement Ratios

All Sources:

1- Year
3- Year

132%

244%

Excluding P&S

1- Year

123%

143%

3- Year
All Sources: Excluding Sales

1- Year
3- Year

101%
132%

251%

147%
176%

Page 20

108%
262%

-31%

844%
493%

159%
141%

156%

196%
166%

25%

Reserves

Total
FY05

FY06

FY04
1,932

FY05
1,932

FY06
2,031

49

49

(6)

13

(10)

15

(1)
-

89
14

107
47

117
24

112
(8)

254
(4)

(9)
49

(9)
33

(151)
1,932

(149)
2,031

(173)
2,264

49

33

1,897

1,927

2,014

37
75.5%

26
78.8%

1,554
80.5%

1,591
78.3%

1,811
80.0%

FY05
106

35
-

FY06
89

FY04
2,594

15

232

36

(20)

6
1

185
191

131
427

136
59

7
(1)

164
(3)

435
(2)

FY05
2,975

FY06
3,478

(34)
89

(36)
68

(233)
2,975

(252)
3,478

(276)
3,810

89

68

2,969

3,317

3,377

1,744
58.6%

1,919
55.2%

2,513
66.0%

FY05

FY06

FY04

66.7

63.8

2,363.9

10.5

(4.7)

51.7

0.3
1.0

0.2

119.8
45.8

(14.7)
63.8

FY05
2,427.4
(4.0)

FY06
2,610.4
11.7

128.8
118.2

139.7
33.8

36.2
(0.2)

139.3
(8.5)

326.5
(4.3)

(15.0)
44.3

(189.8)
2,427.4

(191.3)
2,609.9

(219.0)
2,898.7

4.4
11.8

3.0
(4.5)

12.8
253.5

13.6
382.3

13.2
511.7

11.8
11.8

(4.5)
(4.5)

253.3
217.3

373.8
243.0

507.3
185.2

Page 21

Reserves

102

38

146

257

316

4
14

3
46

166
1,474

2,180
1,932

6,041
2,502

120

87

1,786

4,369

8,859

$10.14

($19.33)

91%

88%

89%

$7.05

$11.43

$17.31

$17.91

$13.08

$9.80

($18.67)
$12.84

$7.45

$9.01

$15.22
$10.27

$10.14

($19.33)
$17.91

$7.05

$11.69

$17.46
$13.23

81%

-30%
25%

133%

195%

232%
189%

81%

-30%

114%

127%

34%
81%

-30%
25%

85%
108%

134%

Page 22

200%

234%
191%