Good morning. And welcome to the Occidental Petroleum Corporation First Quarter 2016 Earnings Conference Call. All participants will be in a listen-only mode. After today's presentation there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Chris Degner. Please go ahead

Thank you, Emily. Good morning, everyone, and thank you for participating in Occidental Petroleum's First Quarter 2016 Conference Call. On the call with us today are Vicki Hollub, President and Chief Executive Officer; Jody Elliott, President of Oxy Domestic Oil & Gas; Sandy Lowe, President of Oxy International Oil and Gas; Chris Stavros, Chief Financial Officer; Rob Peterson, President of OxyChem. In just a moment I will turn the call over to Vicki Hollub. 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. Additional information on factors that could cause results to differ is available on the company's most recent Form 10-K. Our first quarter 2016 earnings press release, the investor relations supplemental schedules, our non-GAAP to GAAP reconciliations, and the conference call presentation slides can be downloaded off of our website at www.oxy.com. I'll now turn the call over to Vicki Hollub. Vicki, please go ahead. Vicki A. Hollub - President, Chief Executive Officer & Director: Thank you, Chris. Good morning, everyone. This quarter was another extremely difficult one for the industry. But we stayed focused on our game plan, addressing the things that are within our sphere of influence, so that we not only survive through this time but thrive. We'll do this through full cycle cost leadership, optimal capital allocation, and maintaining our balance sheet. Superior access to and lower costs of capital positions us to invest in opportunities that will grow our business organically or through acquisitions. We believe the world will continue to need oil. And when markets demand production growth, they will first look to the Permian. And…

Thank you, Chris, and good morning, everyone. Today I'll review the highlights of our Permian Resources and Permian EOR results in the first quarter, provide guidance on our program for the remainder of the year. As Vicki highlighted previously with regard to capital priorities, due to the current oil price environment, our focus has been to prudently allocate capital to our Permian Basin businesses. With this in mind our Permian Resources operation is being managed to maximize the value of our workforce and enhance operational capabilities, invest in areas with existing infrastructure, and gather critical appraisal information to drive better well productivity. In Permian EOR we've proportionally increased the capital allocated to this long lived business to expand CO2 injection capacity and facilities and to bring forward the resource potential. We continue to invest heavily in the application of geoscience and data analytics into our development strategy to ensure we are competitively positioned to take advantage of a sustained improvement in commodity prices. Turning to Permian Resources. In the first quarter we achieved record daily production of 128,000 BOE per day, a 31% increase versus the prior year. Oil production increased to 84,000 barrels per day, an 11% increase from the previous quarter and a 35% increase from a year ago. Additionally, we have leveraged and extended our industry leading practices from our EOR business to drive improvements in base management in order to minimize decline. Our Delaware Basin well performance continues to be strong. We placed 15 horizontal wells on production in the Wolfcamp A benches in the first quarter. We continued to increase well productivity by increasing contact with a reservoir near the wellbore, utilizing higher cluster density, higher proppant loads, and drilling longer laterals. For example, the Vanguard 3 number 15-H achieved a peak rate of 2,099…

Thank you, Jody. And, Emily, we'd now like to open up the call for Q&A.

Thank you. Our first question is from Evan Calio of Morgan Stanley. Please go ahead Evan Calio - Morgan Stanley & Co. LLC: Hey, good morning. And congratulations, Vicki, on officially assuming the CEO role. Vicki A. Hollub - President, Chief Executive Officer & Director: Thank you. Evan Calio - Morgan Stanley & Co. LLC: To start, Vicki, as new CEO, any general strategic thoughts on how you see Oxy's portfolio changing over time? Or through an ultimate upcycle? I know the portfolio was in the middle of a restructuring when the commodity market began falling apart. And should we expect that strategy reasserts in a recovery? Or what are your thoughts there? Vicki A. Hollub - President, Chief Executive Officer & Director: Well, we've almost done all that we wanted to do with our portfolio optimization. The main thing that we wanted to do was to exit those areas that were not core for us, where we didn't really have a competitive advantage and therefore were going to have a really hard time truly adding value at the rate and the delivery that Permian Resources and the Permian EOR can give us. So we – the remaining area that we are now that's non-core that we will be continuing to reduce our exposure to will be in Bahrain. Libya, where we've stopped all investment there. So now we're down to the core areas of Abu Dhabi, Oman, and Qatar in the Middle East, Colombia in South America, the Permian in the U.S. along with South Texas. So we view the Permian, Colombia, and the three areas in the Middle East to still have opportunities for us to continue to grow. And we're going to try to restrict our activities to just those areas, because the one thing that we…

Our next question is from Doug Leggate of Bank of America. Please go ahead.

Thanks. And I'm assuming Steve is listening in somewhere, so we wish him well. And, Vicki, congratulations. Vicki A. Hollub - President, Chief Executive Officer & Director: Thank you.

I have a follow-up actually to Evan's question on CO2. And it goes back to an announcement at the beginning of the year that you had been awarded the Pinon Field in the West Texas Overthrust from SandRidge, and all the facilities went along with that. Well, I seem to recall that then essentially gives you a CO2 source. And I'm wondering how that fits into the CO2 strategy as it relates to potentially additional capacity? So I wonder if you could speak to that first? Then I have a follow up please. Vicki A. Hollub - President, Chief Executive Officer & Director: Yeah. We – as you said we just got that. We haven't had it very long. But our teams are already starting to work there and to see potential there. When SandRidge was developing it, they were developing it more for the hydrocarbons. Our teams are looking more – at it more from a standpoint of looking for CO2. And they're – so they're seeing some opportunities for us to increase our delivery through Century Plant for CO2. So that's going to help us going forward. Now that for us is not something that we absolutely have to have to begin our acceleration. But it does help. And it could help to lower our cost. So that will play a part in our strategy.

Perhaps a related question. Vicki, you continue to show this lovely bubble map with all your CO2 competitors. And of course there's been a lot of chatter about whether M&A could be a factor there. So any additional thoughts you could give us on how this – the acquisition opportunity to look in that part of the business? And I do have one final one, if I may please? Vicki A. Hollub - President, Chief Executive Officer & Director: Okay. We – as I said Permian will be our highest priority in terms of looking for growth potential and for acquisitions of assets. As other companies are still in the process of streamlining their portfolios, we're hoping that there will be properties that come available, assets that they may decide that are no longer core to them. We're staying abreast of that. And we're actually – we are proactively talking to other companies, some not on the list that you see on the slide. Some are companies that may have just water flood opportunities that we can expand into for future CO2 development. But we're certainly interested in both EOR assets, as well as resources. But the problem with the resources assets currently is that the prices are still very high for those.

Okay. Thank you. And my final one if I may. I think this might be for Chris. A couple of – a couple quarters ago you gave us a slide showing the cash burn in the non-core assets, the stuff that basically you're trying to exit. I think it was at $100 oil. I wonder if you could you share with us what that cash burn associated with those was at the – in the first quarter? And I'll leave it there. Thanks Christopher G. Stavros - Chief Financial Officer & Senior Vice President: It really wasn't much, Doug, because to some extent we – or to a large extent we really exited most of those areas. So the cash burn that we had seen was really for the most part over with. And through the fourth quarter there may have been a little bit in the way of working capital. If you want to call it sort of $100 million more or less, as we continue to look at exiting scenarios internationally. But by and large it's largely through. I'd point out too that the only thing left really in terms of the difference between what we've defined as sort of core – non-core or core and not the ongoing operations at this point is really the Bahrain assets or operations. So that's really it. And so I think we're most of the way through

Chris, does that explain the DD&A drop on the Middle East as well? Christopher G. Stavros - Chief Financial Officer & Senior Vice President: Well, that's part of it. And also the uplift or continued ramp at Al Hosn.

Got it. Thanks, everybody.

Our next question is from Philip Gresh of JPMorgan. Please go ahead.

Hey. Good morning. Vicki A. Hollub - President, Chief Executive Officer & Director: Good morning.

The first question is just on the Permian Resources and just the overall volume outlook for the year. If I look at what you achieved in 1Q on the core piece, and then your guidance for 2Q, that's running – at the midpoint you're running at about 597,000 BOE per day. So it's already toward the upper end of the full year outlook. So just wondering maybe what moving pieces we should think about in the back half? And I guess in particular Permian Resources, how you might think about at the current prices what the exit rate would be there in the fourth quarter? Vicki A. Hollub - President, Chief Executive Officer & Director: Again getting back to what I said earlier, we're seeing better productivity from our wells. And we're particularly excited about the New Mexico wells. So we're really reluctant at this point to give a forecast. And Jody and his team would like to have at least one more quarter to see how that development will progress to determine not only what we expect Q3 and Q4 to look like. But also whether or not he might add another rig. Jody? You might have some more comments on that?

Yeah, Vicki. I think the other thing that we want to see is the effect of our base management programs. We're having some really good success there with pump maintenance, with surveillance activities, re-completions. And that's providing some uplift as well. So we want to see all those play out before kind of committing to the back half

Yeah. Sure. Okay. And I guess there was a comment in the slides about the development and resources focusing on fields with existing infrastructure. So I was just curious is there a point at which you think you might need to add some chunky infrastructure spend in resources that could come up against a constraint?

At this point we've got a pretty good inventory in those areas with the infrastructure that meet a pretty low price hurdle. So we'll have some infrastructure, but not the really big stuff in the near term.

Okay. My last question is just on Midstream. Obviously you highlighted the multiple elements of what's been hampering that business for the past few quarters. I guess if you look out in a more normalized world – I know I asked this of Steve a couple quarters ago – but I mean what do you think, Vicki, is the kind of true earnings power of this business in terms of just higher level or maybe the sub-component? So any color you could provide? Vicki A. Hollub - President, Chief Executive Officer & Director: I think it's in a normal world – and that would be one where we would expect to see production increasing in the Permian and NGL and gas prices recovering to some degree – we would expect to see in the neighborhood of $100 million to $200 million income at least from the Midstream business.

Okay. Thanks.

Our next question is from Ed Westlake of Credit Suisse. Please go ahead. Edward George Westlake - Credit Suisse Securities (USA) LLC (Broker): Yeah. I wanted to come back to the Bone Springs. I mean obviously you've got a big acreage position there. So the improvement there obviously has a big impact on your resource base. So maybe just a bit of additional color around whether this is a particular geological sweet spot? Or whether you think the results you've seen extend across a large portion of your acreage?

Yeah. Thanks, Ed. I think we see this extending across a good portion of that acreage. It's not just in that Cedar Canyon area that we've showed some highlights on. We're really encouraged with New Mexico. Edward George Westlake - Credit Suisse Securities (USA) LLC (Broker): And in terms of stack pay potential outside of the Bone Springs?

Multiple benches. And again that's going to be a function of where you are. Some benches are better and some geographic areas. But at least two and in some cases upwards of four. Edward George Westlake - Credit Suisse Securities (USA) LLC (Broker): Okay. And then a different trajectory just on costs. Obviously costs are very low today. And that's helping everyone in the industry. As the industry starts to get back to work, costs may start to inflate. Any thoughts about trying to lock in some of these sort of lower margins for longer – very low cost structures, I should say.

Yeah. Good question, Ed. Trying to predict the time where that supply/demand balance occurs is a little bit like trying to predict oil prices. Today there's a pretty good excessive capacity in the market. But having said that a significant portion of our improvements are due to things like design changes, technology improvements, utilizing some proprietary things such as Oxy Drilling Dynamics. We've invented some special stabilizers and drilling. Integrated planning, manufacturing mode, all those things are really driving the portion of – the big portion of our cost improvements. And those are sustainable. We've maintained our workforce. So when we ramp back up we won't have to access high cost consultants to run rigs and run frac cores. And we've recently made an alignment change with our supply chain organization, where they've been integrated into operations as part of our integrated planning teams. And so the result of that is we've got better alignment of our commercial and our technical strategies to the actual value drivers in each one of those programs. And that lets us drive productivity, utilization, logistics improvements. And that takes cost out of the system, not only for us but for our suppliers. And so in most cases price is important, but it's not the needle mover. So but we are in conversations with our strategic suppliers to determine ways we can better align our operations, drive out combined system costs, and focus on goals where we've got common success. And given our scale in the Permian, we're getting pretty considerable interest. So we continue to make immediate improvements to cash flow and cost. We're proactively taking actions to mitigate against inflation in a higher WTI environment. I mean at the end of the day we'll be ready Edward George Westlake - Credit Suisse Securities (USA) LLC (Broker): And then, sorry, small one. Just on the EURs in the Bone Springs, any update?

Again we take a pretty measured approach to updating our EURs in our inventory. We want to see more production, better understand GOR modeling. And so with a little bit more time we'll update our EURs. But we are really encouraged by the results we're seeing with kind of generation two, generation three, not only frac designs but our modeling efforts. We would expect those to help across the board Edward George Westlake - Credit Suisse Securities (USA) LLC (Broker): Thanks.

Our next question is from Roger Read of Wells Fargo. Please go ahead.

Thank you. Good morning. Vicki A. Hollub - President, Chief Executive Officer & Director: Good morning.

Sorry, I did get pulled away briefly, so I apologize if this was asked. But as you think about increasing spending, increasing the rig count, what oil price and what magnitude should we think about in either of those categories? Vicki A. Hollub - President, Chief Executive Officer & Director: Well, what I'd say about that is we really don't have a set price at which we would increase. We want to see some sustainable improvement with prices. And we want to make sure that the fundamentals support prices. I know a lot of people are saying that around $50 they would start to ramp up. We have a very deep inventory in both resources and the EOR business that would generate really good returns at $50. We're pretty committed to staying at the $3 billion capital range for this year. But Jody and his team in the Permian business are looking at opportunities to ramp up in those areas where they've already started development. And we're prepared to do it when prices do recover. But we would expect that to be maybe adding a rig toward the end of this year. And then ramping up at some point next year again, if prices look like they're going to be in a range that's sustainable.

Okay. And kind of following up I think originally on Evan's question about the portfolio. And again I apologize. I did get pulled away. But the – you've done the disposition side. A few more things you might do. Acquisition wise, you've talked a lot here about opportunities in Southeast New Mexico and all that. Are there other areas you want to expand your footprint in within the Permian Basin? Vicki A. Hollub - President, Chief Executive Officer & Director: Yeah. We're looking at all areas within the Permian Basin. We're – for Resources we would look in Delaware [Basin], Midland Basin, Central Basin Platform. We'd also look in some of those same areas, particularly Central Basin Platform and parts of the Midland Basin for EOR opportunities. So we're definitely looking around the Permian.

And just a final follow-up on that. We've heard obviously prices in the Permian have stayed stronger than most other regions. Any movement? I mean does anything look more affordable today? Or as you think about maybe a more sustained $50 to $60 oil price environment, are there things that look more attractive than maybe they have over the last several quarters? Vicki A. Hollub - President, Chief Executive Officer & Director: Well, we look at the long view of things. So the issue has not been with us in terms of what we would be willing to go out and do from a pricing standpoint, because we – especially around EOR assets, those are assets that produce 50 years, 60 years, 70 years. So we're taking a long view on looking at acquisition opportunities with both EOR assets and Resources. The issue has been with some of the sellers who seem to believe that prices were going to really spike back up to $80, $90, $100. And it seems now that both the outlook for prices is starting to come closer together between the buyers and the sellers. But not quite on the Resources side, where we think it ought to be.

Okay. Thanks. I guess we can all dream about $80 to $90 oil, even if we don't see it. Vicki A. Hollub - President, Chief Executive Officer & Director: Right.

Thanks.

Our next question is from Guy Baber of Simmons. Please go ahead. Guy A. Baber IV - Simmons & Company: Thanks for taking my question. Vicki, Oxy has not made the head count reductions that many of your peers have made. Can you talk about that decision and the internal capability that you're maintaining? And then in your prepared comments you noted that the workforce is focused on initiatives that could have a step function improvement on your performance. Can you just elaborate on those comments? The value you can create and how you retain capability to respond when higher activity levels might be necessary? And does that differentiate Oxy from peers in your mind? Vicki A. Hollub - President, Chief Executive Officer & Director: I think that what we've done with our staff has definitely differentiated us from our competition. And I think it's a contrarian view to how one should manage through a cycle like this. What we've done is we made the commitment to our employees that we were going to keep our staffing level. We did have just a voluntary separation program at the beginning, where some of our later career people who had family issues and needs to go and to leave the company. We allowed some people to leave. But we were selective in terms of trying to make sure that we lost no capability internally. And so those people that did leave had in most cases done a great job of training and mentoring people to take their place. So what we've ended up with is a very capable workforce that has the skills and experience necessary in the mid-career to later career experiences. But also some early career people who have done just a phenomenal job of helping us through this down…

Thank you, Vicki. We are – we've entered into an agreement with ADNOC on the Hail and Ghasha fields. These are fields that have been producing oil for some time. And they have had the gas discoveries, some going back 40 years. So we've worked up an appraisal program for a number of fields. And there's been a few additional fields thrown in, called the Dalma fields to determine just what and when we should be developing. Make a recommendation to the state as to how they can both increase their available gas supply, but also further develop some of the hydrocarbons that have not yet been developed, other liquids included. We've just amended that agreement to add a partner of – the Austrian state oil company, who we've partnered with in many places. So there's a pretty robust team working appraisal and engineering development. One other area of more immediate growth is that we recently – Vicki went to the region to participate in the inauguration of the Al Hosn facilities. And it appears that we are well along the way to getting an agreement to expand the Al Hosn plant. Engineering is underway. And we're having further discussions later this month to determine just on what schedule and how we would do that. So those are the good areas of growth, both medium term and long term. Guy A. Baber IV - Simmons & Company: Thanks, Sandy. Very helpful.

This concludes our question...

Thank you, Sandy, and – operator?

This concludes our question-and-answer session today. I'd like to turn the conference back over to Chris Degner for any closing remarks.

Thank you, Emily. I know everyone has a very busy day with earnings. And appreciate taking the time to join our conference call. Happy Cinco de Mayo.