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Oil & Gas DCF/NAV Modeling Training

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Excel 1997-2003 Excel 2007/2010/2013
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Financial Statement Model for OXY

General assumptions Circularity breaker

Company Name OXY Circular reference breaker
Latest Fiscal year end (mm/dd/yy) 12/31/06 Off=1, On=0 1
Current share price $49.31

Income Statement
Actual Actual Actual Projected Annual Forecast
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
12/31/04 12/31/05 12/31/06 12/31/07 12/31/08 12/31/09 12/31/10 12/31/11 12/31/12 12/31/13
Oil & Gas 7,093.0 9,805.0 12,676.0 10,482.1 10,891.8 11,301.0 11,746.4 12,135.7 12,508.4 12,966.7
Chemical 3,675.0 4,641.0 4,815.0 5,866.7 5,977.8 5,977.8 5,977.8 5,977.8 5,977.8 5,977.8
Other 111.0 151.0 170.0 144.0 144.0 144.0 144.0 144.0 144.0 144.0
Total Revenues 10,879.0 14,597.0 17,661.0 16,492.7 17,013.6 17,422.7 17,868.1 18,257.5 18,630.2 19,088.5
Cost of goods sold 4,418.0 5,425.0 6,284.0 6,078.9 6,340.8 6,503.2 6,692.7 6,859.5 7,016.7 7,200.1
Selling, general, & administrative 936.0 1,324.0 1,371.0 1,371.0 1,371.0 1,371.0 1,371.0 1,371.0 1,371.0 1,371.0
Depreciation, depletion, and amortization 1,251.0 1,422.0 2,042.0 2,400.0 2,400.0 2,400.0 2,400.0 2,400.0 2,400.0 2,400.0
Environmental remediation 59.0 62.0 47.0 47.0 47.0 47.0 47.0 47.0 47.0 47.0
Exploration expense 214.0 314.0 295.0 259.0 247.0 261.7 285.0 301.7 315.7 336.9
EBIT 4,001.0 6,050.0 7,622.0 6,336.9 6,607.8 6,839.8 7,072.5 7,278.3 7,479.7 7,733.5
Interest expense 260.0 293.0 291.0 229.9 222.2 192.2 152.5 139.5 109.2 41.6
Interest, dividends, and other income 144.0 181.0 214.0 179.7 179.7 179.7 179.7 179.7 179.7 179.7
Pretax income 3,885.0 5,938.0 7,545.0 6,286.7 6,565.3 6,827.2 7,099.6 7,318.5 7,550.2 7,871.6
Taxes 1,639.0 1,927.0 3,473.5 2,766.1 2,888.7 3,004.0 3,123.8 3,220.1 3,322.1 3,463.5
Minority interest in Earnings After Tax (enter as - ) (75.0) (73.0) (111.0) (111.0) (111.0) (111.0) (111.0) (111.0) (111.0) (111.0)
Equity in income of affiliates, after tax (enter as +) 113.0 232.0 182.0 182.0 182.0 182.0 182.0 182.0 182.0 182.0
Gain on Lyondell stock issuance 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Income from continuing operations 2,284.0 4,170.0 4,142.5 3,591.5 3,747.6 3,894.2 4,046.8 4,169.3 4,299.1 4,479.1
Discontinued operations, net 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Cumulative effect of changes in accounting principles 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Net income 2,284.0 4,170.0 4,142.5 3,591.5 3,747.6 3,894.2 4,046.8 4,169.3 4,299.1 4,479.1
Diluted shares outstanding 802.3 818.2 860.4 834.7 834.7 834.7 834.7 834.7 834.7 834.7
Diluted EPS $2.85 $5.10 $4.81 $4.30 $4.49 $4.67 $4.85 $4.99 $5.15 $5.37

EBITDA 5,252.0 7,472.0 9,664.0 8,736.9 9,007.8 9,239.8 9,472.5 9,678.3 9,879.7 10,133.5

Projection assumptions
Marginal Tax rate (%) 42.0% 42.0% 44.0% 44.0% 44.0% 44.0% 44.0% 44.0% 44.0% 44.0%
Select a case (1-best, 2-base, 3-weak) 2
Dividends data
Common dividends 424.0 483.0 646.0 805.7 972.1 1,172.8 1,415.0 1,707.3 2,059.9 2,485.3
Dividends per share $0.55 $0.65 $0.80 $0.97 $1.16 $1.41 $1.70 $2.05 $2.47 $2.98
Dividend growth 17% 24% 21% 21% 21% 21% 21% 21% 21%

Balance sheet
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Cash and cash equivalents (incl. ST investments) 2,440.0 1,579.0 1,897.2 4,162.1 5,705.2 7,652.8 9,620.0 10,825.3 11,545.3
Accounts receivable 3,099.0 3,324.0 3,104.1 3,202.2 3,279.2 3,363.0 3,436.3 3,506.4 3,592.7
Inventories 716.0 825.0 798.1 832.5 853.8 878.7 900.6 921.2 945.3
Prepaid expenses and other current assets 682.0 278.0 278.0 278.0 278.0 278.0 278.0 278.0 278.0
Long-term receivables 377.0 231.0 231.0 231.0 231.0 231.0 231.0 231.0 231.0
Investments in unconsolidated entities 1,209.0 1,344.0 1,526.0 1,708.0 1,890.0 2,072.0 2,254.0 2,436.0 2,618.0
PP&E, net 17,171.0 24,316.0 24,840.0 25,376.0 25,897.2 26,395.3 26,876.6 27,343.8 27,789.9
Other non-current assets 414.0 458.0 458.0 458.0 458.0 458.0 458.0 458.0 458.0
Total Assets 26,108.0 32,355.0 33,132.4 36,247.7 38,592.3 41,328.7 44,054.4 45,999.7 47,458.2

Accounts payable 2,046.0 2,263.0 2,189.1 2,283.4 2,341.9 2,410.2 2,470.2 2,526.9 2,592.9
Accrued expenses 1,569.0 1,575.0 1,575.0 1,575.0 1,575.0 1,575.0 1,575.0 1,575.0 1,575.0
Dividends payable 147.0 188.0 234.5 282.9 341.3 411.8 496.9 599.5 723.3
Domestic and foreign income taxes 326.0 396.0 315.4 329.3 342.5 356.1 367.1 378.7 394.9
Other current liabilities (non-debt) 138.0 131.0 131.0 131.0 131.0 131.0 131.0 131.0 131.0
Current portion of long-term debt 46.0 171.0 10.0 695.0 239.0 68.0 644.0 947.0 0.0
Short-term debt 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Long-term debt 2,873.0 2,619.0 2,609.0 1,914.0 1,675.0 1,607.0 963.0 16.0 16.0
Deferred and other income taxes 970.0 2,326.0 1,852.3 1,934.4 2,011.6 2,091.8 2,156.3 2,224.6 2,319.3
Other non-current liabilities 2,621.0 3,161.0 3,161.0 3,161.0 3,161.0 3,161.0 3,161.0 3,161.0 3,161.0
Total Liabilities 10,736.0 12,830.0 12,077.3 12,306.1 11,818.3 11,812.0 11,964.5 11,559.6 10,913.3

Minority interest 340.0 341.0 452.0 563.0 674.0 785.0 896.0 1,007.0 1,118.0
Common Stock and APIC 4,988.0 7,079.0 7,079.0 7,079.0 7,079.0 7,079.0 7,079.0 7,079.0 7,079.0
Treasury stock (contra account) (8.0) (1,481.0) (2,847.7) (2,847.7) (2,847.7) (2,847.7) (2,847.7) (2,847.7) (2,847.7)
Retained earnings 10,425.0 13,919.0 16,704.8 19,480.3 22,201.7 24,833.5 27,295.5 29,534.8 31,528.6
Comprehensive (accumulated) loss (373.0) (333.0) (333.0) (333.0) (333.0) (333.0) (333.0) (333.0) (333.0)
Total Shareholders' Equity 15,372.0 19,525.0 21,055.1 23,941.6 26,774.0 29,516.8 32,089.8 34,440.1 36,544.9

Total Liabilities + Shareholders' Equity 26,108.0 32,355.0 33,132.4 36,247.7 38,592.3 41,328.7 44,054.4 45,999.7 47,458.2
Balance check 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Supporting Schedules

Working Capital 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

1. Grow with revenues (default)

2. Override i: Days of revenues (Avg. collection period) 77.5 68.7
3. Overide ii: Absolute projection
Accounts receivable 3,324.0 3,104.1 3,202.2 3,279.2 3,363.0 3,436.3 3,506.4 3,592.7

1. Grow with COGS (default)

2. Override i: Inventory Days 48.2 47.9
3. Overide ii: Absolute projection
Inventories 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 137.7 131.4
3. Overide ii: Absolute projection
Accounts payable 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

1. Straight-line (default)
2. Overide: Absolute projection
Other current liabilities (non-debt) 131.0 131.0 131.0 131.0 131.0 131.0 131.0 131.0

Diluted Shares outstanding 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Treasury share repurchases 8.0 1,473.0 1,366.7
Expected average share price $48.39 $53.23
Expected rate of return 10.0%
Shares repurchased 29.3 25.7
Diluted shares outstanding 802.3 818.2 860.4 834.7 834.7 834.7 834.7 834.7 834.7 834.7

Debt
Cash @ beginning of the year (end of last year) 1,579.0 1,897.2 4,162.1 5,705.2 7,652.8 9,620.0 10,825.3
Plus: Free cash flows prior to debt during year % of sales 489.2 2,274.9 2,238.1 2,186.6 2,035.2 1,849.3 1,667.1
Less: Minimum cash balance 5.0% 824.6 850.7 871.1 893.4 912.9 931.5 954.4
Total cash available for debt paydown / (debt required) 1,243.6 3,321.4 5,529.0 6,998.4 8,775.1 10,537.8 11,537.9

Current portion of long-term debt 46.0 171.0 10.0 695.0 239.0 68.0 644.0 947.0 0.0
Long-term debt 2,873.0 2,619.0 2,609.0 1,914.0 1,675.0 1,607.0 963.0 16.0 16.0
Cash (shortfall) / surplus 1,072.6 3,311.4 4,834.0 6,759.4 8,707.1 9,893.8 10,590.9
Short-term debt 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Interest expense
Interest rate on long-term debt (CP and LT) 8.5% 8.5% 8.5% 8.5% 8.5% 8.5% 8.5% 8.5%
Interest rate on short term debt 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5%
Interest expense on long-term debt (CP and LT) 229.9 222.2 192.2 152.5 139.5 109.2 41.6
Interest expense on short term debt 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Total interest expense 291.0 229.9 222.2 192.2 152.5 139.5 109.2 41.6

Cash Flow Statement

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Net Income 3,591.5 3,747.6 3,894.2 4,046.8 4,169.3 4,299.1 4,479.1
DD&A 2,400.0 2,400.0 2,400.0 2,400.0 2,400.0 2,400.0 2,400.0
Deferred taxes (473.7) 82.1 77.2 80.3 64.5 68.3 94.7
Dry hole and impairment expense 259.0 247.0 261.7 285.0 301.7 315.7 336.9
Income from equity investments / Minority interest (71.0) (71.0) (71.0) (71.0) (71.0) (71.0) (71.0)
Working capital 92.3 (24.1) (26.7) (26.8) (24.1) (22.5) (28.2)
Other 46.5 48.4 58.4 70.5 85.0 102.6 123.8
Cash from operations 5,844.6 6,430.0 6,593.9 6,784.7 6,925.5 7,092.2 7,335.3

Capital Expenditures (3,383.0) (3,383.0) (3,383.0) (3,383.0) (3,383.0) (3,383.0) (3,383.0)

Asset Sales/ (Acquisitions) 200.0 200.0 200.0 200.0 200.0 200.0 200.0
Other 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Cash from investing (3,183.0) (3,183.0) (3,183.0) (3,183.0) (3,183.0) (3,183.0) (3,183.0)

Common and preferred dividends (805.7) (972.1) (1,172.8) (1,415.0) (1,707.3) (2,059.9) (2,485.3)
Treasury stock repurchases (1,366.7) 0.0 0.0 0.0 0.0 0.0 0.0
Other 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Increases / (decreases) in debt (171.0) (10.0) (695.0) (239.0) (68.0) (644.0) (947.0)
Cash from financing (2,343.4) (982.1) (1,867.8) (1,654.0) (1,775.3) (2,703.9) (3,432.3)

Total increase/decrease of cash 318.2 2,264.9 1,543.1 1,947.6 1,967.2 1,205.3 720.1
Discounted Cash Flow Model for OXY

General assumptions

Valuation / deal date 3/31/07

Last fiscal year end date 12/31/06
Stub year fraction 75.3%
Current Share Price $49.31
Weighted average cost of capital: 10.0%

Free cash flow buildup

Projected Annual Forecast
2007 2008 2009 2010 2011 2012 2013
12/31/07 12/31/08 12/31/09 12/31/10 12/31/11 12/31/12 12/31/13
Total Revenues 16,492.7 17,013.6 17,422.7 17,868.1 18,257.5 18,630.2 19,088.5
EBITDA 8,736.9 9,007.8 9,239.8 9,472.5 9,678.3 9,879.7 10,133.5
EBIT 6,336.9 6,607.8 6,839.8 7,072.5 7,278.3 7,479.7 7,733.5
Tax rate 44.0% 44.0% 44.0% 44.0% 44.0% 44.0% 44.0%
EBIAT 3,548.6 3,700.4 3,830.3 3,960.6 4,075.8 4,188.6 4,330.8
DD&A 2,400.0 2,400.0 2,400.0 2,400.0 2,400.0 2,400.0 2,400.0
Deferred tax liabilities (473.7) 82.1 77.2 80.3 64.5 68.3 94.7
Exploration expense (dry hole) 259.0 247.0 261.7 285.0 301.7 315.7 336.9
Working capital (increases) / decreases 92.3 (24.1) (26.7) (26.8) (24.1) (22.5) (28.2)
Capital expenditures (net of asset sales) (3,183.0) (3,183.0) (3,183.0) (3,183.0) (3,183.0) (3,183.0) (3,183.0)
Unlevered free cash flows 1,991.5 3,222.4 3,359.5 3,516.0 3,634.9 3,767.1 3,951.2
Discount factor 0.931 0.846 0.769 0.699 0.636 0.578 0.525
Midyear adjustment factor 1.037 1.049 1.049 1.049 1.049 1.049 1.049
Present value of free cash flows 1,921.3 2,859.5 2,710.2 2,578.6 2,423.4 2,283.3 2,177.1
Sum of present values of FCFs 16,953.4

Terminal value Equity value calculations

Growth in perpetuity method Enterprise value 48,895.9

Long term growth rate 0.0% Calculation of net debt:
Free cash flow (t+1) 3,951.2 Current portion of long-term debt 171.0
Terminal value 39,512.0 Short term debt 0.0
Mid-year adjusted terminal value 41,440.5 Long term debt 2,619.0
Present value of terminal value 21,771.2 Minority interest 341.0
Enterprise value 38,724.6 Less: Excess cash (1,579.0)
Less: Equity investments (1,344.0)
Exit multiple method Net debt 208.0
Exit EV / EBITDA multiple 6.0x Equity value 48,687.9
LTM EBITDA at end of projection period 10,133.5 Shares outstanding 841.8
Equity value / share $57.84
Exit EV / DACF multiple 10.0x
LTM DACF at end of projection period 3,951.2
Shares Outstanding Worksheet
Exit EV / daily production ($/boe/d) $50,000
LTM daily production (Mboe/d) at end of projecti 773.2 Basic Shares Outstanding : 838.10
Current Share Price: $49.31
Terminal value - Exit EV / EBITDA multiple 60,801.1 Options / Warrants Data
Terminal value - Exit EV / DACF multiple 39,512.0 # of options $ strike # In-the-$
Terminal value - Exit EV / daily production ($/boe 38,658.9 Batch 1 6.537 $21.23 6.537
Batch 2 0.000
EV/EBITDA multiple 1 Batch 3 0.000
EV/DACF multiple 2 Batch 4 0.000
EV/production 3 Batch 5 0.000
Batch 6 0.000
Exit multiple method to use 1 Total in-the-$ options: 6.537
Total $ proceeds: $138.8
Terminal value 60,801.1 Treasury stock method? (y/n) y
Present value of terminal value 31,942.5 Total shares repurchased: 2.8
Enterprise value 48,895.9 Basic shares outstanding 838.1
New shares from options: 3.7
Select a terminal value method Total Shares Outstanding: 841.8
Perpetual growth = 1 / Exit multiple = 2 2
Enterprise value 48,895.9
Terminal value as percent of total value 65.3%

Analysis of WACC

Cost of debt Capital structure

Cost of debt 5.2% Current capital structure Target capital structure
Marginal tax rate 44.0% Market value % Weight override % Weight
Cost of debt after tax shield 2.9% Net debt 208.0 0.5% 0.5%
Equity 41,510.3 99.5% 99.5%
Cost of equity Total 41,718.3
Risk-Free Rate (rf) 4.7%
Market Risk Premium (rm-rf) 6.0% Weighted average cost of capital
Raw (observed) beta 0.79 Weighted average cost of capital: 9.2%
Cost of equity using relevered industry beta 9.2%

Industry beta calculation

Comps Raw beta Share price Shares Market cap. Debt D/E Tax rate Unl. Beta Weigh. Beta Relev. Beta
OXY 0.79 $49.31 841.8 41,510.3 208.0 0.50% 44.00% 0.79 0.16
COP 0.85 $68.35 1,673.6 114,391.8 26,317.0 23.01% 45.00% 0.75 0.41
HES 0.78 $55.47 319.7 17,735.9 3,389.0 19.11% 55.65% 0.72 0.06
MRO 0.75 $98.83 347.9 34,386.7 5,947.0 17.29% 44.79% 0.68 0.11
208,024.6 Average: 0.74 0.75 0.75

Summary DCF Output

Equity value per share at various exit EBITDA m<-- Exit multiple method must be selected
Equity value / share
$57.84 6.0x 7.0x 8.0x 9.0x 10.0x
WACC of 12.0% $52.36 $57.96 $63.56 $69.16 $74.76
11.0% 55.01 60.96 66.91 72.86 78.81
10.0% 57.84 64.16 70.48 76.81 83.13
9.0% 60.86 67.58 74.31 81.03 87.76
8.0% 64.08 71.24 78.40 85.56 92.72

Equity / share at perpetual growth rate sensitivi <-- Growth in perpetuity method must be selected
Equity value / share
$57.84 0.0% 1.0% 1.5% 2.0% 2.5%
WACC of 12.0% $52.36 $52.36 $52.36 $52.36 $52.36
11.0% $55.01 $55.01 $55.01 $55.01 $55.01
10.0% $57.84 $57.84 $57.84 $57.84 $57.84
9.0% $60.86 $60.86 $60.86 $60.86 $60.86
8.0% $64.08 $64.08 $64.08 $64.08 $64.08
Net Asset Value (NAV) for OXY

E&P

Total development costs 6,859.0

% development/year 20%
Oil decline/year 2%
Natural gas decline/year 3%

Oil Natural Gas

Reserves Production Price Reserves Production Price
Bbbls MMbbls $/bbl Tcf Bcf $/MMcf

2006 2,263.7 3,810.0

2007 2,094.4 169.3 $50.72 3,511.0 299.0 $6.34
2008 1,918.8 175.7 $50.74 3,189.9 321.1 $6.16
2009 1,736.2 182.6 $50.77 2,854.7 335.2 $6.06
2010 1,547.6 188.5 $50.79 2,474.2 380.5 $5.71
2011 1,353.0 194.6 $50.81 2,071.1 403.1 $5.57
2012 1,152.0 201.0 $50.84 1,656.1 415.0 $5.52
2013 944.0 208.0 $50.86 1,210.7 445.4 $5.36
2014 740.2 203.8 $60.00 778.7 432.0 $7.00
2015 540.5 199.7 $60.00 359.6 419.1 $7.00
2016 344.7 195.7 $60.00 - 359.6 $7.00
2017 152.9 191.8 $60.00 - - $7.00
2018 - 152.9 $60.00 - - $7.00
2019 - - $60.00 - - $7.00
2020 - - $60.00 - - $7.00
2021 - - $60.00 - - $7.00
2022 - - $60.00 - - $7.00
2023 - - $60.00 - - $7.00
2024 - - $60.00 - - $7.00
2025 - - $60.00 - - $7.00
2026 - - $60.00 - - $7.00
2027 - - $60.00 - - $7.00
2028 - - $60.00 - - $7.00
2029 - - $60.00 - - $7.00
2030 - - $60.00 - - $7.00
2031 - - $60.00 - - $7.00
2032 - - $60.00 - - $7.00
2033 - - $60.00 - - $7.00
2034 - - $60.00 - - $7.00
2035 - - $60.00 - - $7.00
2036 - - $60.00 - - $7.00
2037 - - $60.00 - - $7.00
2038 - - $60.00 - - $7.00
2039 - - $60.00 - - $7.00
2040 - - $60.00 - - $7.00
 Total 2,263.7 3,810.0

NPV $34,599

Acreage

Implied
value
MM Acres Value ($MM) ($/acre)
U.S. 1.1 $400 $358
Latin America 14.5 $900 $62
Eastern Hemisphere 28.7 $1,600 $56
Total 44.3 $2,900 $476

Total E&P $37,499

Chemicals

2007 EBITDA 880.0

Target EV/EBITDA 7.5x
Estimated value 6,600.0

EV $44,099

Current portion of long-term debt 171.0

Short-term debt 0.0
Long-term debt 2,619.0
Minority interest 341.0
Cash & Investments 2,923.0
Equity investments 1,344.0
Net Debt 208.0

Equity Value 43,890.9

Shares outstanding 841.8

Share price $52.14

Asset-Based Valuation for OXY

E&P
Proved reserves 24,610.0
Unproved reserves 1,759.0

Implied
value
MM Acres Value ($MM) ($/acre)
U.S. 1.1 $400 $358
Latin America 14.5 $900 $62
Eastern Hemisphere 28.7 $1,600 $56
Total 44.3 $2,900 $476

Chemicals
2007 EBITDA 880.0
Target EV/EBITDA 7.5x
Estimated value 6,600.0

Cash & Investments 2,923.0

Working capital (excl. cash) 424.0
Equity investments
Other assets 458.0

EV 39,674.0

Current portion of long-term debt #REF!

Short-term debt #REF!
Long-term debt #REF!
Minority interest 341.0
Cash & Investments 1,579.0
Equity investments 1,344.0
Total non-equity claims #REF!

Equity Value #REF!

Shares outstanding 841.8

Share price #REF!

 Revenues Development Total Pre-Tax Tax After-Tax
Oil Natural Gas Total Production Costs Costs Cash Flows Rate Cash Flows
$MM $MM $MM $/boe $MM $MM $MM % $MM

$8,585.0 $1,897.1 $10,482.1 $11.24 $2,463.2 $1,371.8 $6,647.1 38% $4,134.4

8,914.8 1,977.0 10,891.8 $11.48 2,630.7 1,371.8 6,889.4 38% 4,243.9
9,270.6 2,030.4 11,301.0 $11.71 2,793.1 1,371.8 7,136.1 39% 4,353.2
9,574.6 2,171.8 11,746.4 $11.84 2,982.6 1,371.8 7,392.0 40% 4,471.5
9,889.7 2,246.0 12,135.7 $12.03 3,149.4 1,371.8 7,614.5 40% 4,562.1
10,217.4 2,291.0 12,508.4 $12.24 3,306.6 9,201.8 41% 5,455.5
10,578.3 2,388.5 12,966.7 $12.37 3,490.0 9,476.8 41% 5,556.2
12,229.1 3,024.2 15,253.3 $12.00 3,309.9 11,943.4 40% 7,166.1
11,984.5 2,933.5 14,918.0 $12.00 3,235.0 11,683.0 40% 7,009.8
11,744.8 2,517.4 14,262.2 $12.00 3,068.2 11,194.0 40% 6,716.4
11,509.9 - 11,509.9 $12.00 2,302.0 9,207.9 40% 5,524.8
9,174.5 - 9,174.5 $12.00 1,834.9 7,339.6 40% 4,403.7
- - - $12.00 - - 40% -
- - - $12.00 - - 40% -
- - - $12.00 - - 40% -
- - - $12.00 - - 40% -
- - - $12.00 - - 40% -
- - - $12.00 - - 40% -
- - - $12.00 - - 40% -
- - - $12.00 - - 40% -
- - - $12.00 - - 40% -
- - - $12.00 - - 40% -
- - - $12.00 - - 40% -
- - - $12.00 - - 40% -
- - - $12.00 - - 40% -
- - - $12.00 - - 40% -
- - - $12.00 - - 40% -
- - - $12.00 - - 40% -
- - - $12.00 - - 40% -
- - - $12.00 - - 40% -
- - - $12.00 - - 40% -
- - - $12.00 - - 40% -
- - - $12.00 - - 40% -
- - - $12.00 - - 40% -
147,149.9 34,565.5 6,859.0 105,725.4 63,597.5
Production Profile for OXY

Production assumptions
Conversion factor 6

Actual Actual Actual Projected Annual Forecast

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

United States
Crude oil & liquids (Mbbls/d)
California 78 76 86 86 86 85 84 83 81 79
Permian 154 161 167 172 177 182 187 192 196 199
Other 22 16 15 15 15 15 15 15 15 15
Total Crude Oils 254 253 268 273 278 283 286 289 292 294

Crude oil & liquids - (Decline)/Growth

California (2.6%) 13.2% 0.0% 0.0% (1.0%) (1.0%) (2.0%) (2.0%) (2.0%)
Permian 4.5% 3.7% 3.0% 3.0% 3.0% 2.5% 2.5% 2.0% 2.0%
Other (27.3%) (6.3%) 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Total Crude Oils (0.4%) 5.9% 1.9% 1.9% 1.6% 1.3% 1.0% 0.8% 0.8%

Natural gas (MMcf/d)

California 237 242 256 256 256 253 251 246 241 236
Hugoton 127 133 138 142 146 151 155 160 165 170
Permian 130 170 194 200 206 212 218 225 232 239
Other 13 8 7 7 7 7 7 7 7 7
Total natural gas 507 553 595 605 615 623 632 638 644 651

TOTAL (Mboe/d) - U.S. 339 345 367 374 381 386 392 396 399 402
% growth 2.0% 6.4% 1.8% 1.8% 1.5% 1.3% 1.0% 0.8% 0.9%

Latin America
Crude oil (Mbbls/d)
Argentina - - 33 35 36 38 40 42 44 46
Colombia 33 32 33 33 33 33 33 33 33 33
Total 33 32 66 68 69 71 73 75 77 79

Natural gas (MMcf/d)

Argentina - - 17 18 19 20 21 22 23 24
Bolivia - - 17 18 19 20 21 22 23 24
Total - - 34 36 37 39 41 43 46 48

Natural gas - (Decline)/Growth

Argentina 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0%
Bolivia 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0%
Total - - - 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0%

TOTAL (Mboe/d) - Latin America 33 32 72 74 76 78 80 82 85 87

% growth (3.0%) 124.0% 2.7% 2.8% 2.8% 2.9% 2.9% 3.0% 3.1%

Eastern Hemisphere
Crude oil (Mbbls/d)
Oman 13 17 18 19 20 21 22 23 24 25
Qatar 45 42 43 45 47 50 52 55 58 61
Pakistan 7 5 4 - - - - - - -
Russia 29 28 27 - - - - - - -
Yemen 33 29 30 30 31 31 31 32 32 32
Libya - 8 23 29 36 45 52 59 68 79
Total 127 129 145 123 134 146 157 169 182 197

Natural gas (MMcfd)

Pakistan 75 77 76 - - - - - - -
Oman 55 44 30 29 27 26 24 23 22 21
Qatar - - - 150 200 230 345 400 425 500
Total 130 121 106 179 227 256 369 423 447 521

Natural gas - (Decline)/Growth

Pakistan 2.7% (1.3%)
Oman (20.0%) (31.8%) (5.0%) (5.0%) (5.0%) (5.0%) (5.0%) (5.0%) (5.0%)
Qatar 33.3% 15.0% 50.0% 15.9% 6.3% 17.6%
Total (6.9%) (12.4%) 68.4% 27.2% 12.6% 44.5% 14.6% 5.6% 16.5%

TOTAL (Mboe/d) - Eastern Hemisphere 149 149 163 153 172 189 219 239 256 283
% growth 0.3% 9.1% (6.0%) 12.3% 10.2% 15.6% 9.5% 7.1% 10.5%

Total
Crude oil (MMbbls/d) 414 414 479 464 481 500 516 533 551 570
Natural gas (MMcf/d) 637 674 735 819 880 918 1,042 1,104 1,137 1,220
Total (BOE) - Worldwide 520 526 602 600 628 653 690 717 740 773
% growth 1.2% 14.3% (0.2%) 4.6% 4.0% 5.6% 3.9% 3.2% 4.5%
E&P Income Statement for OXY

E&P assumptions
Number of days in a year 365

E&P Results
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Revenues 6,811 9,458 12,256 10,482 10,892 11,301 11,746 12,136 12,508 12,967
Production Costs (1,277) (1,607) (2,365) (2,463) (2,631) (2,793) (2,983) (3,149) (3,307) (3,490)
Exploration Expense (208) (313) (295) (259) (247) (262) (285) (302) (316) (337)
Depreciation (988) (1,150) (1,761) (1,724) (1,779) (1,821) (1,888) (1,919) (1,933) (1,964)
Other (334) (422) (600) (559) (580) (600) (627) (647) (664) (688)
Pre-Tax 4,004 5,966 7,235 5,478 5,655 5,826 5,964 6,118 6,288 6,488
Taxes (1,407) (2,250) (2,911) (2,071) (2,172) (2,272) (2,356) (2,452) (2,560) (2,684)
Total E&P 2,597 3,716 4,324 3,407 3,484 3,554 3,608 3,665 3,728 3,804

Geographical Breakdown
United States: 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Revenues 4,467 6,000 7,066 6,720 6,844 6,949 7,040 7,113 7,171 7,233
Production Costs (1,016) (1,311) (1,717) (1,816) (1,919) (2,019) (2,117) (2,211) (2,302) (2,396)
Exploration Expense (117) (132) (88) (90) (91) (93) (94) (95) (96) (96)
Depreciation (622) (706) (926) (943) (960) (975) (988) (998) (1,006) (1,015)
Other (226) (291) (410) (417) (425) (432) (437) (442) (445) (449)
Taxes (689) (982) (1,151) (1,013) (1,011) (1,006) (998) (987) (974) (961)
Total 1,797 2,578 2,774 2,441 2,437 2,425 2,406 2,380 2,348 2,316

Latin America
Revenues 505 666 1,358 1,232 1,264 1,298 1,334 1,371 1,411 1,452
Production Costs (70) (74) (280) (301) (323) (346) (371) (397) (424) (453)
Exploration Expense (22) (53) (32) (33) (34) (35) (36) (37) (38) (39)
Depreciation (44) (55) (275) (282) (290) (298) (307) (316) (325) (335)
Other (15) (6) (47) (35) (36) (37) (38) (39) (40) (41)
Taxes (179) (224) (310) (249) (249) (249) (249) (250) (250) (250)
Total 175 254 414 332 332 333 333 333 333 333

Eastern Hemisphere
Revenues 1,839 2,792 3,832 2,530 2,784 3,054 3,372 3,652 3,926 4,281
Production Costs (191) (222) (368) (346) (388) (428) (495) (541) (580) (641)
Exploration Expense (69) (128) (175) (137) (122) (134) (155) (170) (182) (201)
Depreciation (322) (389) (560) (498) (528) (547) (593) (606) (602) (614)
Other (93) (125) (143) (106) (120) (132) (152) (167) (179) (197)
Taxes (539) (1,044) (1,450) (809) (911) (1,017) (1,109) (1,216) (1,336) (1,473)
Total 625 884 1,136 634 714 796 868 952 1,047 1,154

Production
Crude oil & liquids (Mbbls/d) 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
United States 254 253 268 273 278 283 286 289 292 294
Latin America 33 32 66 68 69 71 73 75 77 79
Eastern Hemisphere 127 129 145 123 134 146 157 169 182 197
Total Crude & NGL's 414 414 479 464 481 500 516 533 551 570

Natural gas (MMcfd)

United States 507 553 595 605 615 623 632 638 644 651
Latin America - - 34 36 37 39 41 43 46 48
Eastern Hemisphere 130 121 106 179 227 256 369 423 447 521
Total 637 674 735 819 880 918 1,042 1,104 1,137 1,220

Total Production (MBOED)

Crude Oil & Liquids 414 414 479 464 481 500 516 533 551 570
Natural Gas 106 112 123 137 147 153 174 184 190 203
Total 520 526 602 600 628 653 690 717 740 773

Geographical Basis
United States 339 345 367 374 381 386 392 396 399 402
Latin America 33 32 72 74 76 78 80 82 85 87
Eastern Hemisphere 149 149 163 153 172 189 219 239 256 283
Total 520 526 602 600 628 653 690 717 740 773

Cost Profile ($/BBL)

United States 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Production Costs $8.22 $10.41 $12.81 $13.31 $13.81 $14.31 $14.81 $15.31 $15.81 $16.31
Exploration Expense $0.95 $1.05 $0.66 $0.66 $0.66 $0.66 $0.66 $0.66 $0.66 $0.66
Depreciation $5.03 $5.60 $6.91 $6.91 $6.91 $6.91 $6.91 $6.91 $6.91 $6.91
Other $1.83 $2.31 $3.06 $3.06 $3.06 $3.06 $3.06 $3.06 $3.06 $3.06
Taxes 28% 28% 29% 29% 29% 29% 29% 29% 29% 29%

U.S. - Cost Escalations/(Declines)

Production Costs $0.50 $0.50 $0.50 $0.50 $0.50 $0.50 $0.50
Exploration Expense $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00
Depreciation $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00
Other $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00
Taxes 0% 0% 0% 0% 0% 0% 0%

Latin America
Production Costs $5.81 $6.34 $10.70 $11.20 $11.70 $12.20 $12.70 $13.20 $13.70 $14.20
Exploration Expense $1.83 $4.54 $1.22 $1.22 $1.22 $1.22 $1.22 $1.22 $1.22 $1.22
Depreciation $3.65 $4.71 $10.51 $10.51 $10.51 $10.51 $10.51 $10.51 $10.51 $10.51
Other $1.25 $0.51 $1.80 $1.30 $1.30 $1.30 $1.30 $1.30 $1.30 $1.30
Taxes 51% 47% 43% 43% 43% 43% 43% 43% 43% 43%

Latin America - Cost Escalations/(Declines)

Production Costs $0.50 $0.50 $0.50 $0.50 $0.50 $0.50 $0.50
Exploration Expense $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00
Depreciation $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00
Other ($0.50) $0.00 $0.00 $0.00 $0.00 $0.00 $0.00
Taxes 0% 0% 0% 0% 0% 0% 0%

Eastern Hemisphere
Production Costs $3.52 $4.08 $6.20 $6.20 $6.20 $6.20 $6.20 $6.20 $6.20 $6.20
Exploration Expense $1.27 $2.35 $2.95 $2.45 $1.95 $1.95 $1.95 $1.95 $1.95 $1.95
Depreciation $5.93 $7.14 $9.43 $8.93 $8.43 $7.93 $7.43 $6.93 $6.43 $5.93
Other $1.71 $2.30 $2.41 $1.91 $1.91 $1.91 $1.91 $1.91 $1.91 $1.91
Taxes 46% 54% 56% 56% 56% 56% 56% 56% 56% 56%

Total
Revenues $35.87 $49.23 $55.82 $47.84 $47.52 $47.39 $46.63 $46.35 $46.30 $45.95
Production Costs $6.73 $8.36 $10.77 $11.24 $11.48 $11.71 $11.84 $12.03 $12.24 $12.37
Exploration Expense $1.10 $1.63 $1.34 $1.18 $1.08 $1.10 $1.13 $1.15 $1.17 $1.19
Depreciation $5.20 $5.99 $8.02 $7.87 $7.76 $7.63 $7.49 $7.33 $7.16 $6.96
Other $1.76 $2.20 $2.73 $2.55 $2.53 $2.52 $2.49 $2.47 $2.46 $2.44
Taxes 35% 38% 40% 38% 38% 39% 40% 40% 41% 41%
Price Deck for OXY
Select an operating scenario
1 = Best case
2 = Base case 2
3 = Weak case

Actual Actual Actual Projected Annual Forecast

2004 2005 2006 2007 2008 2009 2010
Benchmarks
Select a case (1-best, 2-base, 3-weak) 2

Strong case 1 $70.00 $70.00 $70.00 $70.00

Base case 2 $55.00 $55.00 $55.00 $55.00
Weak case 3 $40.00 $40.00 $40.00 $40.00
North Sea Brent ($/Bbl) $38.12 $54.42 $65.12 $55.00 $55.00 $55.00 $55.00

Strong case 1 $70.00 $70.00 $70.00 $70.00

Base case 2 $55.00 $55.00 $55.00 $55.00
Weak case 3 $40.00 $40.00 $40.00 $40.00
West Texas Int. $41.30 $56.59 $66.11 $55.00 $55.00 $55.00 $55.00

Strong case 1 $9.00 $9.00 $9.00 $9.00

Base case 2 $8.00 $8.00 $8.00 $8.00
Weak case 3 $7.00 $7.00 $7.00 $7.00
US (NGW) ($/MMcf) $5.69 $8.34 $6.40 $8.00 $8.00 $8.00 $8.00

Realized prices
Crude oil & liquids (Mbbls/d) 2004 2005 2006 2007 2008 2009 2010
Select a case (1-best, 2-base, 3-weak) 1

Strong case 1 92% 92% 92% 92%

Base case 2 90% 90% 90% 90%
Weak case 3 88% 88% 88% 88%
United States $37.72 $50.80 $58.13 $50.60 $50.60 $50.60 $50.60
Differential 91% 90% 88% 92% 92% 92% 92%

Strong case 1 88% 88% 88% 88%

Base case 2 84% 84% 84% 84%
Weak case 3 80% 80% 80% 80%
Latin America $33.09 $44.79 $52.40 $48.40 $48.40 $48.40 $48.40
Differential 87% 82% 80% 88% 88% 88% 88%

Strong case 1 95% 95% 95% 95%

Base case 2 93% 93% 93% 93%
Weak case 3 91% 91% 91% 91%
Eastern Hemisphere $34.88 $49.88 $61.58 $52.25 $52.25 $52.25 $52.25
Differential 92% 92% 95% 95% 95% 95% 95%

Natural Gas ($/MMcf)

Strong case 1 95% 95% 95% 95%
Base case 2 90% 90% 90% 90%
Weak case 3 85% 85% 85% 85%
United States $5.35 $7.11 $6.51 $7.60 $7.60 $7.60 $7.60
Differential 94% 85% 102% 95% 95% 95% 95%

Strong case 1 35% 35% 35% 35%

Base case 2 30% 30% 30% 30%
Weak case 3 25% 25% 25% 25%
Latin America $0.00 $0.00 $2.00 $2.80 $2.80 $2.80 $2.80
Differential 31% 35% 35% 35% 35%

Strong case 1 35% 35% 35% 35%

Base case 2 30% 30% 30% 30%
Weak case 3 25% 25% 25% 25%
Eastern Hemisphere $2.94 $2.44 $2.25 $2.80 $2.80 $2.80 $2.80
Differential 52% 29% 35% 35% 35% 35% 35%

Reference prices
World Wide Oil $35.79 $49.18 $56.57 $50.72 $50.74 $50.77 $50.79
World Wide Gas $4.56 $5.98 $5.50 $6.34 $6.16 $6.06 $5.71

Data tables

2007 Natural Gas Benchmark Price

$4.30 $6.00 $7.00 $8.00 $9.00 $10.00
$50.00 #REF! #REF! #REF! #REF! #REF!
$55.00 #REF! #REF! #REF! #REF! #REF!
2007 Brent Price $60.00 #REF! #REF! #REF! #REF! #REF!
$65.00 #REF! #REF! #REF! #REF! #REF!
$70.00 #REF! #REF! #REF! #REF! #REF!
$75.00 #REF! #REF! #REF! #REF! #REF!
ted Annual Forecast
2011 2012 2013

$70.00 $70.00 $70.00

$55.00 $55.00 $55.00
$40.00 $40.00 $40.00
$55.00 $55.00 $55.00

$70.00 $70.00 $70.00

$55.00 $55.00 $55.00
$40.00 $40.00 $40.00
$55.00 $55.00 $55.00

$9.00 $9.00 $9.00

$8.00 $8.00 $8.00
$7.00 $7.00 $7.00
$8.00 $8.00 $8.00

2011 2012 2013

92% 92% 92%

90% 90% 90%
88% 88% 88%
$50.60 $50.60 $50.60
92% 92% 92%

88% 88% 88%

84% 84% 84%
80% 80% 80%
$48.40 $48.40 $48.40
88% 88% 88%

95% 95% 95%

93% 93% 93%
91% 91% 91%
$52.25 $52.25 $52.25
95% 95% 95%

95% 95% 95%

90% 90% 90%
85% 85% 85%
$7.60 $7.60 $7.60
95% 95% 95%

35% 35% 35%

30% 30% 30%
25% 25% 25%
$2.80 $2.80 $2.80
35% 35% 35%

35% 35% 35%

30% 30% 30%
25% 25% 25%
$2.80 $2.80 $2.80
35% 35% 35%

$50.81 $50.84 $50.86

$5.57 $5.52 $5.36
Morgan Stanley
Douglas Terreson, CFA OXY -NYSE
(713) 512-4480

CAPEX for OXY

Capital expenditures
Actual Actual Actual Projected Annual Forecast
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Oil & gas 1,526 2,137 2,721 3,200 3,200 3,200 3,200 3,200 3,200 3,200
Chemicals 155 173 251 150 150 150 150 150 150 150
Other 39 14 33 33 33 33 33 33 33 33
Total 1,720 2,324 3,005 3,383 3,383 3,383 3,383 3,383 3,383 3,383

DD&A
E&P 989 1,151 1,761 2,123 2,123 2,123 2,123 2,123 2,123 2,123
Chemicals 243 251 260 256 256 256 256 256 256 256
Other 19 20 21 21 21 21 21 21 21 21
Total 1,251 1,422 2,042 2,400 2,400 2,400 2,400 2,400 2,400 2,400

PP&E
Capital expenditures 2,324 3,005 3,383 3,383 3,383 3,383 3,383 3,383 3,383
Asset sales (185.0) (982.0) (200.0) (200.0) (200.0) (200.0) (200.0) (200.0) (200.0)
DD&A (1,422) (2,042) (2,400) (2,400) (2,400) (2,400) (2,400) (2,400) (2,400)
Exploration expense (313.0) (295.0) (259.0) (247.0) (261.7) (285.0) (301.7) (315.7) (336.9)
PP&E 17,171.0 24,316.0 24,840.0 25,376.0 25,897.2 26,395.3 26,876.6 27,343.8 27,789.9
Morgan Stanley
Douglas Terreson, CFA OXY - NYSE
(713) 512-4480

Chemicals for OXY

Actual Actual Actual Projected Annual Forecast

($ Million) 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Total Revenues 3,675 4,641 4,815 5,867 5,978 5,978 5,978 5,978 5,978 5,978
Total Operating Expenses 3,018 3,783 3,654 4,987 5,081 5,081 5,081 5,081 5,081 5,081
% of Sales 82.1% 81.5% 75.9% 79.8% 79.8% 79.8% 79.8% 79.8% 79.8% 79.8%
Total EBITDA 657 858 1,161 880 897 897 897 897 897 897
EBITDA Margin 17.9% 18.5% 24.1% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0%

DD&A 243 251 260 256 256 256 256 256 256 256
EBIT 414 607 901 624 641 641 641 641 641 641
Interest Expense 0 0 0 0 0 0 0 0 0 0
Earnings Before Tax 414 607 901 624 641 641 641 641 641 641
Taxes (32%) 132 194 288 200 205 205 205 205 205 205
Total Income 282 413 613 424 436 436 436 436 436 436

% of Sales
Base Chemicals 33% 42% 48%
Vinyls 57% 50% 48%
Performance Chemicals 10% 8% 4%

Sales Contribution by Product ($MM)

Base Chemicals 1,213 1,949 2,311
Vinyls 2,095 2,321 2,311
Performance Chemicals 368 371 193

Page 17
 Reserves

Reserves Profile for OXY

United States Latin America Middle East Other

Net Proved Reserves - Oil (MMbbls) FY04 FY05 FY06 FY04 FY05 FY06 FY04 FY05 FY06 FY04
Reserves at Begining of Year 1,500 1,494 1,636 46 67 50 326 322 296 60
Changes attributable to:
Revisions (4) 29 (28) (1) (13) 10 16 (34) 39 2
Improved Recovery 72 98 71 6 6 33 10 3 14 1
Extensions & discovery 9 7 3 - 3 7 3 36 14 2
Purchases 10 108 98 29 - 152 - 4 4 (4)
Sales - (8) (4) - - - - - - -
Production (93) (92) (98) (13) (13) (26) (33) (35) (40) (12)
Reserves at End of Year 1,494 1,636 1,678 67 50 226 322 296 327 49
Reserves w/o Sale/Purchases 1,484 1,536 1,584 38 50 74 322 292 323 53

Developed Reserves: 1,260 1,336 1,396 43 44 140 208 174 249 43

Percent Developed 84.4% 81.7% 83.2% 64.2% 88.0% 61.9% 64.6% 58.8% 76.1% 87.8%

Net Proved Reserves of Natural Gas (Bcf) FY04 FY05 FY06 FY04 FY05 FY06 FY04 FY05 FY06 FY04
Reserves at Begining of Year 1,826 2,101 2,338 - - - 654 768 1,051 114
Changes attributable to:
Revisions 94 53 (132) - - 45 134 (32) 59 4
Improved Recovery 180 129 123 - - - - - 7 5
Extensions & discovery 181 96 58 - - - - 331 - 10
Purchases 7 164 274 - - 161 - - - -
Sales (1) (3) (2) - - - - - - -
Production (186) (202) (217) - - (12) (20) (16) (11) (27)
Reserves at End of Year 2,101 2,338 2,442 - - 194 768 1,051 1,106 106
Reserves w/o Sale/Purchases 2,095 2,177 2,170 - - 33 768 1,051 1,106 106

Developed Reserves: 1,644 1,846 1,953 - - - 100 73 560

Percent Developed 78.3% 79.0% 80.0% 13.0% 6.9% 50.6%

Barrels of Equivilant (BOE) Reserves FY04 FY05 FY06 FY04 FY05 FY06 FY04 FY05 FY06 FY04
Reserves at Begining of Year 1,803.9 1,843.7 2,025.4 46.0 67.0 50.0 435.0 450.0 471.2 79.0
Changes attributable to:
Revisions 11.7 37.8 (50.0) (1.0) (13.0) 17.5 38.3 (39.3) 48.8 2.7
Improved Recovery 102.0 119.5 91.5 6.0 6.0 33.0 10.0 3.0 15.2 1.8
Extensions & discovery 39.2 23.0 12.7 - 3.0 7.0 3.0 91.2 14.0 3.7
Purchases 11.2 135.3 143.7 29.0 - 178.8 - 4.0 4.0 (4.0)
Sales (0.2) (8.5) (4.3) - - - - - - -
Production (124.0) (126.0) (134.2) (13.0) (13.0) (28.0) (36.3) (37.7) (41.8) (16.5)
Reserves at End of Year 1,843.7 2,024.9 2,084.7 67.0 50.0 258.3 450.0 471.2 511.3 66.7
Reserve Life, years 14.9 16.1 15.5 5.2 3.8 9.2 12.4 12.5 12.2 4.0
New Reserves * 164.0 315.7 197.8 34.0 (4.0) 236.3 51.3 58.8 82.0 4.2
New Reserves, plus sales 163.8 307.2 193.5 34.0 (4.0) 236.3 51.3 58.8 82.0 4.2
New Reserves - Sales - Purchases 152.8 180.3 54.2 5.0 (4.0) 57.5 51.3 54.8 78.0 8.2

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 Reserves

Cost Incurred (in millions)

Exploration 31 39 40 47 69 61 80 47 177 (12)
Property acq. 47 1,795 2,471 94 - 3,063 25 381 504 -
Development 581 942 1,344 156 142 320 726 834 792 11
Total Costs 659 2,776 3,855 297 211 3,444 831 1,262 1,473 (1)

D/F&D

Value Ratios ($/BOE)

All Sources - No Sales Average Cost/BOE - 1 Year $4.02 $8.79 $19.49 $8.74 ($52.75) $14.57 $16.19 $21.45 $17.96 ($0.24)
3-Year Average $10.76 $14.84 $18.56

Only Exp & Dev Average Cost/BOE - 1 Year $4.00 $5.44 $25.55 $40.60 ($52.75) $6.63 $15.70 $16.07 $12.42 ($0.12)
3-Year Average $7.69 $13.59 $14.42

All Sources (Incl. S and P) Average Cost/BOE - 1 Year $4.02 $9.04 $19.92 $8.74 ($52.75) $14.57 $16.19 $21.45 $17.96 ($0.24)
3-Year Average $10.97 $14.84 $18.56

Production Replacement Ratios

All Sources: 1- Year 132% 244% 144% 262% -31% 844% 141% 156% 196% 25%
3- Year 173% 493% 166%

Excluding P&S 1- Year 123% 143% 40% 38% -31% 205% 141% 146% 186% 49%
3- Year 101% 108% 159%

All Sources: Excluding Sales 1- Year 132% 251% 147% 262% -31% 844% 141% 156% 196% 25%
3- Year 176% 493% 166%

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 Reserves

Total

FY05 FY06 FY04 FY05 FY06

49 49 1,932 1,932 2,031

8 (6) 13 (10) 15
- (1) 89 107 117
1 - 14 47 24
- - 35 112 254
- - - (8) (4)
(9) (9) (151) (149) (173)
49 33 1,932 2,031 2,264
49 33 1,897 1,927 2,014

37 26 1,554 1,591 1,811

75.5% 78.8% 80.5% 78.3% 80.0%

FY05 FY06 FY04 FY05 FY06

106 89 2,594 2,975 3,478

15 8 232 36 (20)
2 6 185 131 136
- 1 191 427 59
- - 7 164 435
- - (1) (3) (2)
(34) (36) (233) (252) (276)
89 68 2,975 3,478 3,810
89 68 2,969 3,317 3,377

1,744 1,919 2,513

58.6% 55.2% 66.0%

FY05 FY06 FY04 FY05 FY06

66.7 63.8 2,363.9 2,427.4 2,610.4

10.5 (4.7) 51.7 (4.0) 11.7

0.3 - 119.8 128.8 139.7
1.0 0.2 45.8 118.2 33.8
- - 36.2 139.3 326.5
- - (0.2) (8.5) (4.3)
(14.7) (15.0) (189.8) (191.3) (219.0)
63.8 44.3 2,427.4 2,609.9 2,898.7
4.4 3.0 12.8 13.6 13.2
11.8 (4.5) 253.5 382.3 511.7
11.8 (4.5) 253.3 373.8 507.3
11.8 (4.5) 217.3 243.0 185.2

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 Reserves

102 38 146 257 316

4 3 166 2,180 6,041
14 46 1,474 1,932 2,502
120 87 1,786 4,369 8,859

91% 88% 89%

$10.14 ($19.33) $7.05 $11.43 $17.31

$17.91 $13.08

$9.80 ($18.67) $7.45 $9.01 $15.22

$12.84 $10.27

$10.14 ($19.33) $7.05 $11.69 $17.46

$17.91 $13.23

81% -30% 133% 195% 232%

25% 189%

81% -30% 114% 127% 85%

34% 108%

81% -30% 134% 200% 234%

25% 191%

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