-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Tf0WNJzr8C8FMHO27Kv+TTwOQf593yd2aJZlxZVPicdJZC3nglymOCKvW6tugOkS RU4QgJdk2Utr31ig7ZPWNw== 0000797468-07-000034.txt : 20070424 0000797468-07-000034.hdr.sgml : 20070424 20070424112909 ACCESSION NUMBER: 0000797468-07-000034 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 23 CONFORMED PERIOD OF REPORT: 20070424 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Other Events FILED AS OF DATE: 20070424 DATE AS OF CHANGE: 20070424 FILER: COMPANY DATA: COMPANY CONFORMED NAME: OCCIDENTAL PETROLEUM CORP /DE/ CENTRAL INDEX KEY: 0000797468 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 954035997 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-09210 FILM NUMBER: 07783543 BUSINESS ADDRESS: STREET 1: 10889 WILSHIRE BLVD CITY: LOS ANGELES STATE: CA ZIP: 90024 BUSINESS PHONE: 3102088800 MAIL ADDRESS: STREET 1: 10889 WILSHIRE BOULEVARD CITY: LOS ANGELES STATE: CA ZIP: 90024 8-K 1 form8k-20070424.htm FORM 8-K Occidental Petroleum Corporation

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) April 24, 2007

OCCIDENTAL PETROLEUM CORPORATION

(Exact name of registrant as specified in its charter)

Delaware

1-9210

95-4035997

(State or other jurisdiction
of incorporation)

(Commission
File Number)

(I.R.S. Employer
Identification No.)

10889 Wilshire Boulevard
Los Angeles, California

90024

(Address of principal executive offices)

(ZIP code)

Registrant’s telephone number, including area code:

(310) 208-8800

 

Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions (see General Instruction A.2. below):

[    ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[    ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[    ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[    ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Section 2 – Financial Information

Item 2.02.  Results of Operations and Financial Condition

On April 24, 2007, Occidental Petroleum Corporation released information regarding its results of operations for the three months ended March 31, 2007. The exhibits to this Form 8-K and the information set forth in this Item 2.02 are being furnished pursuant to Item 2.02, Results of Operations and Financial Condition. The full text of the press release is attached to this report as Exhibit 99.1. The full text of the speeches given by Dr. Ray R. Irani and Stephen I. Chazen is attached to this report as Exhibit 99.2. Investor Relations Supplemental Schedules are attached to this report as Exhibit 99.3. Earnings Conference Call Slides are attached to this report as Exhibit 99.4.

Section 8 – Other Events

Item 8.01.  Other Events

On April 24, 2007, Occidental Petroleum Corporation announced net income for the first quarter 2007 was $1.212 billion ($1.43 per diluted share), compared with $1.231 billion ($1.43 per diluted share) for the first quarter 2006. Core results for the first quarter 2007 were $831 million ($0.98 per diluted share), compared with $1.153 billion ($1.34 per diluted share) for the same period in 2006. See the attached schedule for a reconciliation of net income to core results.

Oil and Gas

Oil and gas segment earnings were $2.070 billion for the first quarter 2007, compared with $1.910 billion for the same period in 2006. Oil and gas earnings were $1.549 billion for the first quarter 2007, after excluding gains from the sale of Oxy's investment in the Russian Vanyoganneft joint venture and litigation settlements, compared with $1.910 billion for the first quarter 2006. See the attached schedule for a reconciliation of segment earnings to core results. The decline in the first quarter 2007 reflected $233 million of decreases from lower crude oil and natural gas prices, increased DD&A rates and higher operating expenses, partially offset by higher crude oil production.

The average price for West Texas Intermediate crude oil in the first quarter 2007 was $58.24 per barrel compared to $63.48 per barrel in the first quarter 2006. Oxy's realized price for worldwide crude oil was $51.78 per barrel for the first quarter 2007, compared with $55.38 per barrel for the first quarter 2006. The average price for NYMEX gas in the first quarter 2007 was $7.17 per MCF, compared with $11.42 per MCF in the first quarter 2006. Domestic realized gas prices decreased from $8.36 per MCF in the first quarter 2006 to $6.38 per MCF for the first quarter 2007.

Production

For the first quarter 2007, daily oil and gas production from continuing operations averaged 587,000 barrels of oil equivalent (BOE), a 24,000 BOE increase over the 563,000 equivalent barrels per day produced in the first quarter 2006. The improvement was a result of the Vintage and Plains acquisitions and higher Middle East production in the first quarter, partially offset by an incident at Elk Hills involving the natural gas gathering lines. The Elk Hills incident negatively impacted Oxy's net production for the quarter by 14,000 barrels per day.

Chemicals

Chemical first quarter 2007 segment earnings were $137 million, compared with first quarter 2006 segment earnings of $250 million. The first quarter 2007 results reflect lower margins for caustic soda and polyvinyl chloride.

Items Affecting Net Income

The first quarter 2007 core results of $831 million excludes, net of tax: a $109 million gain for litigation settlements, a $412 million gain resulting from the sale of Oxy's 50-percent investment in the Russian Vanyoganneft joint venture, a $110 million charge for the completion of a cash tender offer for various debt issues, and a $30 million provision for a plant closure and related environmental remediation reserve.

Forward-Looking Statements

Statements in this release that contain words such as "will," "expect" or "estimate," or otherwise relate to the future, are forward-looking and involve risks and uncertainties that could significantly affect expected results. Factors that could cause results to differ materially include, but are not limited to: exploration risks, such as drilling of unsuccessful wells; global commodity pricing fluctuations and supply/demand considerations for oil, gas and chemicals; higher-than-expected costs; political risk; changes in tax rates and not successfully completing (or any material delay in) any expansion, capital expenditure, acquisition, or disposition. You should not place undue reliance on these forward-looking statements which speak only as of the date of this release. Unless legally required, Occidental does not undertake any obligation to update any forward-looking statements as a result of new information, future events or otherwise. U.S. investors are urged to consider carefully the disclosure in our Form 10-K, available through the following toll-free telephone number, 1-888-OXYPETE (1-888-699-7383) or on the Internet at http://www.oxy.com. You also can obtain a copy from the SEC by calling 1-800-SEC-0330.

2

SUMMARY OF SEGMENT NET SALES AND EARNINGS

 

 

First Quarter

 

 

 

----------------

 

(In millions, except per-share amounts)

 

2007

 

2006

 

==========================================

 

=======

 

=======

 

SEGMENT NET SALES

 

 

 

 

 

Oil and Gas

 

$ 3,009

 

$ 3,125

 

Chemical

 

1,060

 

1,241

 

Other

 

39

 

30

 

 

 

-------

 

-------

 

Net sales

 

$ 4,108

 

$ 4,396

 

==========================================

 

=======

 

=======

 

SEGMENT EARNINGS

 

 

 

 

 

Oil and Gas (a)

 

$ 2,070

 

$ 1,910

 

Chemical

 

137

 

250

 

 

 

-------

 

-------

 

 

 

2,207

 

2,160

 

Unallocated Corporate Items

 

 

 

 

 

Interest expense, net (b)

 

(181

)

(29

)

Income taxes

 

(703

)

(907

)

Other (c)

 

(111

)

(71

)

 

 

-------

 

-------

 

Income from Continuing Operations

 

1,212

 

1,153

 

Discontinued operations, net

 

--

 

78

 

 

 

-------

 

-------

 

NET INCOME

 

$ 1,212

 

$ 1,231

 

 

 

=======

 

=======

 

BASIC EARNINGS PER COMMON SHARE

 

 

 

 

 

Income from continuing operations

 

$  1.44

 

$  1.36

 

Discontinued operations, net

 

--

 

0.09

 

 

 

-------

 

-------

 

 

 

$  1.44

 

$  1.45

 

 

 

=======

 

=======

 

DILUTED EARNINGS PER COMMON SHARE

 

 

 

 

 

Income from continuing operations

 

$  1.43

 

$  1.34

 

Discontinued operations, net

 

--

 

0.09

 

 

 

-------

 

-------

 

 

 

$  1.43

 

$  1.43

 

 

 

=======

 

=======

 

AVERAGE BASIC COMMON SHARES OUTSTANDING

 

 

 

 

 

BASIC

 

841.0

 

848.5

 

DILUTED

 

846.5

 

860.9

 

==========================================

 

=======

 

=======

 

See footnotes on following page.

3

(a)

In January 2007, Occidental sold its 50-percent interest in the Russian Vanyoganneft joint venture to TNK-BP for approximately $485 million and recorded an after-tax gain of $412 million. Also in the first quarter 2007, Occidental resolved certain legal disputes that resulted in an after-tax gain of $109 million.

(b)

The first quarter 2007 includes a $172 million pre-tax interest charge for the cash tender offer of $659 million principal of various debt issues.

(c)

The first quarter 2007 includes a $47 million pre-tax charge for a plant closure and related environmental remediation reserve.

SUMMARY OF CAPITAL EXPENDITURES AND DD&A EXPENSE

 

 

First Quarter

 

 

 

----------------

 

($ millions)

 

2007

 

2006

 

==========================================

 

=======

 

=======

 

CAPITAL EXPENDITURES

 

$   784

 

$   596

 

 

 

=======

 

=======

 

DEPRECIATION, DEPLETION AND
 AMORTIZATION OF ASSETS

 

$   588

 

$   463

 

==========================================

 

=======

 

=======

 

4

SUMMARY OF OPERATING STATISTICS

 

 

First Quarter

 

 

 

----------------

 

 

 

2007

 

2006

 

==========================================

 

=======

 

=======

 

NET OIL, GAS AND LIQUIDS
PRODUCTION PER DAY

 

 

 

 

 

United States

 

 

 

 

 

Crude oil and liquids (MBBL)

 

 

 

 

 

California

 

85

 

82

 

Permian

 

165

 

166

 

Horn Mountain

 

10

 

15

 

Hugoton and other

 

4

 

3

 

 

 

-------

 

-------

 

Total

 

264

 

266

 

Natural Gas (MMCF)

 

 

 

 

 

California

 

232

 

250

 

Hugoton and other

 

150

 

133

 

Permian

 

198

 

189

 

Horn Mountain

 

5

 

10

 

 

 

-------

 

-------

 

Total

 

585

 

582

 

Latin America

 

 

 

 

 

Crude Oil (MBBL)

 

 

 

 

 

Argentina

 

33

 

24

 

Colombia

 

42

 

39

 

 

 

-------

 

-------

 

Total

 

75

 

63

 

Natural Gas (MMCF)

 

 

 

 

 

Argentina

 

21

 

13

 

Bolivia

 

14

 

13

 

 

 

-------

 

-------

 

Total

 

35

 

26

 

Middle East/North Africa

 

 

 

 

 

Crude Oil (MBBL)

 

 

 

 

 

Oman

 

22

 

17

 

Qatar

 

46

 

44

 

Yemen

 

32

 

32

 

Libya

 

26

 

22

 

 

 

-------

 

-------

 

Total

 

126

 

115

 

Natural Gas (MMCF)

 

 

 

 

 

Oman

 

26

 

25

 

Other Eastern Hemisphere

 

 

 

 

 

Crude Oil (MBBL)

 

 

 

 

 

Pakistan

 

4

 

4

 

Natural Gas (MMCF)

 

 

 

 

 

Pakistan

 

73

 

75

 

Barrels of Oil Equivalent (MBOE)

 

 

 

 

 

Subtotal consolidated subsidiaries

 

589

 

566

 

Colombia-minority interest

 

(5

)

(5

)

Yemen-Occidental net interest

 

3

 

2

 

 

 

-------

 

-------

 

Total Worldwide Production (MBOE) (a)

 

587

 

563

 

==========================================

 

=======

 

=======

 

(a)

Occidental sold its interest in the Russian Vanyoganneft joint venture in January 2007. Russian production has been excluded from both periods for comparability.

5

SIGNIFICANT TRANSACTIONS AND EVENTS AFFECTING EARNINGS

Occidental's results of operations often include the effects of significant transactions and events affecting earnings that vary widely and unpredictably in nature, timing and amount. Therefore, management uses a measure called "core results," which excludes those items. This non-GAAP measure is not meant to disassociate those items from management's performance, but rather is meant to provide useful information to investors interested in comparing Occidental's earnings performance between periods. Reported earnings are considered representative of management's performance over the long term. Core results is not considered to be an alternative to operating income in accordance with generally accepted accounting principles.

 

 

First Quarter

 

 

 

----------------------------------

 

($ millions, except
per-share amounts

 

2007

 

Diluted

EPS

 

2006

 

Diluted

EPS

 

=====================================

 

=======

 

=======

 

=======

 

=======

 

TOTAL REPORTED EARNINGS

 

$ 1,212

 

$  1.43

 

$ 1,231

 

$  1.43

 

 

 

=======

 

=======

 

=======

 

=======

 

Oil and Gas

 

 

 

 

 

 

 

 

 

Segment Earnings

 

$ 2,070

 

 

 

$ 1,910

 

 

 

Less:

 

 

 

 

 

 

 

 

 

Russia-Vanyoganneft sale**

 

412

 

 

 

--

 

 

 

Legal settlements**

 

109

 

 

 

--

 

 

 

 

 

-------

 

 

 

-------

 

 

 

Segment Core Results

 

1,549

 

 

 

1,910

 

 

 

 

 

-------

 

 

 

-------

 

 

 

Chemicals

 

 

 

 

 

 

 

 

 

Segment Earnings

 

137

 

 

 

250

 

 

 

No significant items affecting earnings

 

--

 

 

 

--

 

 

 

 

 

-------

 

 

 

-------

 

 

 

Segment Core Results

 

137

 

 

 

250

 

 

 

 

 

-------

 

 

 

-------

 

 

 

Total Segment Core Results

 

1,686

 

 

 

2,160

 

 

 

 

 

-------

 

 

 

-------

 

 

 

Corporate

 

 

 

 

 

 

 

 

 

Corporate Results --
Non Segment*

 

(995

)

 

 

(929

)

 

 

Less:

 

 

 

 

 

 

 

 

 

Debt purchase expense

 

(172

)

 

 

--

 

 

 

Facility closure

 

(47

)

 

 

--

 

 

 

Tax effect of pre-tax
adjustments

 

79

 

 

 

--

 

 

 

Discontinued operations, net**

 

--

 

 

 

78

 

 

 

 

 

-------

 

 

 

-------

 

 

 

Corporate Core Results --
Non Segment

 

(855

)

 

 

(1,007

)

 

 

 

 

-------

 

 

 

-------

 

 

 

TOTAL CORE RESULTS

 

$   831

 

$  0.98

 

$ 1,153

 

$  1.34

 

=====================================

 

=======

 

=======

 

=======

 

=======

 

*

Interest expense, income taxes, G&A expense and other, and non-core items.

**

Amounts shown after tax.

6

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

OCCIDENTAL PETROLEUM CORPORATION

 

 

(Registrant)

DATE:  April 24, 2007

/s/ Jim A. Leonard

 

 

Jim A. Leonard, Vice President and Controller
(Principal Accounting and Duly Authorized Officer)

 

EXHIBIT INDEX

99.1

Press release dated April 24, 2007.

99.2

Full text of speeches given by Dr. Ray R. Irani and Stephen I. Chazen.

99.3

Investor Relations Supplemental Schedules.

99.4

Earnings Conference Call Slides.

EX-99 2 ex991-20070424.htm EXHIBIT 99.1 Exhibit 99.1

EXHIBIT 99.1

For Immediate Release: Tuesday, April 24, 2007

Occidental Petroleum Announces First Quarter Earnings

LOS ANGELES -- Occidental Petroleum Corporation (NYSE: OXY) announced net income for the first quarter 2007 was $1.212 billion ($1.43 per diluted share), compared with $1.231 billion ($1.43 per diluted share) for the first quarter 2006. Core results for the first quarter 2007 were $831 million ($0.98 per diluted share), compared with $1.153 billion ($1.34 per diluted share) for the same period in 2006. See the attached schedule for a reconciliation of net income to core results.

Oil and Gas

Oil and gas segment earnings were $2.070 billion for the first quarter 2007, compared with $1.910 billion for the same period in 2006. Oil and gas earnings were $1.549 billion for the first quarter 2007, after excluding gains from the sale of Oxy's investment in the Russian Vanyoganneft joint venture and litigation settlements, compared with $1.910 billion for the first quarter 2006. See the attached schedule for a reconciliation of segment earnings to core results. The decline in the first quarter 2007 reflected $233 million of decreases from lower crude oil and natural gas prices, increased DD&A rates and higher operating expenses, partially offset by higher crude oil production.

The average price for West Texas Intermediate crude oil in the first quarter 2007 was $58.24 per barrel compared to $63.48 per barrel in the first quarter 2006. Oxy's realized price for worldwide crude oil was $51.78 per barrel for the first quarter 2007, compared with $55.38 per barrel for the first quarter 2006. The average price for NYMEX gas in the first quarter 2007 was $7.17 per MCF, compared with $11.42 per MCF in the first quarter 2006. Domestic realized gas prices decreased from $8.36 per MCF in the first quarter 2006 to $6.38 per MCF for the first quarter 2007.

Production

For the first quarter 2007, daily oil and gas production from continuing operations averaged 587,000 barrels of oil equivalent (BOE), a 24,000 BOE increase over the 563,000 equivalent barrels per day produced in the first quarter 2006. The improvement was a result of the Vintage and Plains acquisitions and higher Middle East production in the first quarter, partially offset by an incident at Elk Hills involving the natural gas gathering lines. The Elk Hills incident negatively impacted Oxy's net production for the quarter by 14,000 barrels per day.

Chemicals

Chemical first quarter 2007 segment earnings were $137 million, compared with first quarter 2006 segment earnings of $250 million. The first quarter 2007 results reflect lower margins for caustic soda and polyvinyl chloride.

Items Affecting Net Income

The first quarter 2007 core results of $831 million excludes, net of tax: a $109 million gain for litigation settlements, a $412 million gain resulting from the sale of Oxy's 50-percent investment in the Russian Vanyoganneft joint venture, a $110 million charge for the completion of a cash tender offer for various debt issues, and a $30 million provision for a plant closure and related environmental remediation reserve.

About Oxy

Occidental Petroleum Corporation is an international oil and gas exploration and production company with operations in the United States, Middle East/North Africa and Latin America regions. Oxy is the fourth largest U.S. oil and gas company, based on equity market capitalization. Oxy's wholly owned subsidiary, OxyChem, manufactures and markets chlor-alkali products and vinyls. Occidental is committed to safeguarding the environment, protecting the safety and health of employees and neighboring communities and

2

upholding high standards of social responsibility in all of the company's worldwide operations.

Forward-Looking Statements

Statements in this release that contain words such as "will," "expect" or "estimate," or otherwise relate to the future, are forward-looking and involve risks and uncertainties that could significantly affect expected results. Factors that could cause results to differ materially include, but are not limited to: exploration risks, such as drilling of unsuccessful wells; global commodity pricing fluctuations and supply/demand considerations for oil, gas and chemicals; higher-than-expected costs; political risk; changes in tax rates and not successfully completing (or any material delay in) any expansion, capital expenditure, acquisition, or disposition. You should not place undue reliance on these forward-looking statements which speak only as of the date of this release. Unless legally required, Occidental does not undertake any obligation to update any forward-looking statements as a result of new information, future events or otherwise. U.S. investors are urged to consider carefully the disclosure in our Form 10-K, available through the following toll-free telephone number, 1-888-OXYPETE (1-888-699-7383) or on the Internet at http://www.oxy.com. You also can obtain a copy from the SEC by calling 1-800-SEC-0330.

-0-

Contacts:

Richard S. Kline (media)

 

310-443-6249

 

Christopher G. Stavros (investors)

 

212-603-8184

 

For further analysis of Occidental's quarterly performance, please visit the web site: www.oxy.com

3

SUMMARY OF SEGMENT NET SALES AND EARNINGS

 

 

First Quarter

 

 

 

----------------

 

(In millions, except per-share amounts)

 

2007

 

2006

 

==========================================

 

=======

 

=======

 

SEGMENT NET SALES

 

 

 

 

 

Oil and Gas

 

$ 3,009

 

$ 3,125

 

Chemical

 

1,060

 

1,241

 

Other

 

39

 

30

 

 

 

-------

 

-------

 

Net sales

 

$ 4,108

 

$ 4,396

 

==========================================

 

=======

 

=======

 

SEGMENT EARNINGS

 

 

 

 

 

Oil and Gas (a)

 

$ 2,070

 

$ 1,910

 

Chemical

 

137

 

250

 

 

 

-------

 

-------

 

 

 

2,207

 

2,160

 

Unallocated Corporate Items

 

 

 

 

 

Interest expense, net (b)

 

(181

)

(29

)

Income taxes

 

(703

)

(907

)

Other (c)

 

(111

)

(71

)

 

 

-------

 

-------

 

Income from Continuing Operations

 

1,212

 

1,153

 

Discontinued operations, net

 

--

 

78

 

 

 

-------

 

-------

 

NET INCOME

 

$ 1,212

 

$ 1,231

 

 

 

=======

 

=======

 

BASIC EARNINGS PER COMMON SHARE

 

 

 

 

 

Income from continuing operations

 

$  1.44

 

$  1.36

 

Discontinued operations, net

 

--

 

0.09

 

 

 

-------

 

-------

 

 

 

$  1.44

 

$  1.45

 

 

 

=======

 

=======

 

DILUTED EARNINGS PER COMMON SHARE

 

 

 

 

 

Income from continuing operations

 

$  1.43

 

$  1.34

 

Discontinued operations, net

 

--

 

0.09

 

 

 

-------

 

-------

 

 

 

$  1.43

 

$  1.43

 

 

 

=======

 

=======

 

AVERAGE BASIC COMMON SHARES OUTSTANDING

 

 

 

 

 

BASIC

 

841.0

 

848.5

 

DILUTED

 

846.5

 

860.9

 

==========================================

 

=======

 

=======

 

See footnotes on following page.

4

(a)

In January 2007, Occidental sold its 50-percent interest in the Russian Vanyoganneft joint venture to TNK-BP for approximately $485 million and recorded an after-tax gain of $412 million. Also in the first quarter 2007, Occidental resolved certain legal disputes that resulted in an after-tax gain of $109 million.

(b)

The first quarter 2007 includes a $172 million pre-tax interest charge for the cash tender offer of $659 million principal of various debt issues.

(c)

The first quarter 2007 includes a $47 million pre-tax charge for a plant closure and related environmental remediation reserve.

SUMMARY OF CAPITAL EXPENDITURES AND DD&A EXPENSE

 

 

First Quarter

 

 

 

----------------

 

($ millions)

 

2007

 

2006

 

==========================================

 

=======

 

=======

 

CAPITAL EXPENDITURES

 

$   784

 

$   596

 

 

 

=======

 

=======

 

DEPRECIATION, DEPLETION AND
 AMORTIZATION OF ASSETS

 

$   588

 

$   463

 

==========================================

 

=======

 

=======

 

5

SUMMARY OF OPERATING STATISTICS

 

 

First Quarter

 

 

 

----------------

 

 

 

2007

 

2006

 

==========================================

 

=======

 

=======

 

NET OIL, GAS AND LIQUIDS
PRODUCTION PER DAY

 

 

 

 

 

United States

 

 

 

 

 

Crude oil and liquids (MBBL)

 

 

 

 

 

California

 

85

 

82

 

Permian

 

165

 

166

 

Horn Mountain

 

10

 

15

 

Hugoton and other

 

4

 

3

 

 

 

-------

 

-------

 

Total

 

264

 

266

 

Natural Gas (MMCF)

 

 

 

 

 

California

 

232

 

250

 

Hugoton and other

 

150

 

133

 

Permian

 

198

 

189

 

Horn Mountain

 

5

 

10

 

 

 

-------

 

-------

 

Total

 

585

 

582

 

Latin America

 

 

 

 

 

Crude Oil (MBBL)

 

 

 

 

 

Argentina

 

33

 

24

 

Colombia

 

42

 

39

 

 

 

-------

 

-------

 

Total

 

75

 

63

 

Natural Gas (MMCF)

 

 

 

 

 

Argentina

 

21

 

13

 

Bolivia

 

14

 

13

 

 

 

-------

 

-------

 

Total

 

35

 

26

 

Middle East/North Africa

 

 

 

 

 

Crude Oil (MBBL)

 

 

 

 

 

Oman

 

22

 

17

 

Qatar

 

46

 

44

 

Yemen

 

32

 

32

 

Libya

 

26

 

22

 

 

 

-------

 

-------

 

Total

 

126

 

115

 

Natural Gas (MMCF)

 

 

 

 

 

Oman

 

26

 

25

 

Other Eastern Hemisphere

 

 

 

 

 

Crude Oil (MBBL)

 

 

 

 

 

Pakistan

 

4

 

4

 

Natural Gas (MMCF)

 

 

 

 

 

Pakistan

 

73

 

75

 

Barrels of Oil Equivalent (MBOE)

 

 

 

 

 

Subtotal consolidated subsidiaries

 

589

 

566

 

Colombia-minority interest

 

(5

)

(5

)

Yemen-Occidental net interest

 

3

 

2

 

 

 

-------

 

-------

 

Total Worldwide Production (MBOE) (a)

 

587

 

563

 

==========================================

 

=======

 

=======

 

(a)

Occidental sold its interest in the Russian Vanyoganneft joint venture in January 2007. Russian production has been excluded from both periods for comparability.

6

SIGNIFICANT TRANSACTIONS AND EVENTS AFFECTING EARNINGS

Occidental's results of operations often include the effects of significant transactions and events affecting earnings that vary widely and unpredictably in nature, timing and amount. Therefore, management uses a measure called "core results," which excludes those items. This non-GAAP measure is not meant to disassociate those items from management's performance, but rather is meant to provide useful information to investors interested in comparing Occidental's earnings performance between periods. Reported earnings are considered representative of management's performance over the long term. Core results is not considered to be an alternative to operating income in accordance with generally accepted accounting principles.

 

 

First Quarter

 

 

 

----------------------------------

 

($ millions, except
per-share amounts

 

2007

 

Diluted

EPS

 

2006

 

Diluted

EPS

 

=====================================

 

=======

 

=======

 

=======

 

=======

 

TOTAL REPORTED EARNINGS

 

$ 1,212

 

$  1.43

 

$ 1,231

 

$  1.43

 

 

 

=======

 

=======

 

=======

 

=======

 

Oil and Gas

 

 

 

 

 

 

 

 

 

Segment Earnings

 

$ 2,070

 

 

 

$ 1,910

 

 

 

Less:

 

 

 

 

 

 

 

 

 

Russia-Vanyoganneft sale**

 

412

 

 

 

--

 

 

 

Legal settlements**

 

109

 

 

 

--

 

 

 

 

 

-------

 

 

 

-------

 

 

 

Segment Core Results

 

1,549

 

 

 

1,910

 

 

 

 

 

-------

 

 

 

-------

 

 

 

Chemicals

 

 

 

 

 

 

 

 

 

Segment Earnings

 

137

 

 

 

250

 

 

 

No significant items affecting earnings

 

--

 

 

 

--

 

 

 

 

 

-------

 

 

 

-------

 

 

 

Segment Core Results

 

137

 

 

 

250

 

 

 

 

 

-------

 

 

 

-------

 

 

 

Total Segment Core Results

 

1,686

 

 

 

2,160

 

 

 

 

 

-------

 

 

 

-------

 

 

 

Corporate

 

 

 

 

 

 

 

 

 

Corporate Results --
Non Segment*

 

(995

)

 

 

(929

)

 

 

Less:

 

 

 

 

 

 

 

 

 

Debt purchase expense

 

(172

)

 

 

--

 

 

 

Facility closure

 

(47

)

 

 

--

 

 

 

Tax effect of pre-tax
adjustments

 

79

 

 

 

--

 

 

 

Discontinued operations, net**

 

--

 

 

 

78

 

 

 

 

 

-------

 

 

 

-------

 

 

 

Corporate Core Results --
Non Segment

 

(855

)

 

 

(1,007

)

 

 

 

 

-------

 

 

 

-------

 

 

 

TOTAL CORE RESULTS

 

$   831

 

$  0.98

 

$ 1,153

 

$  1.34

 

=====================================

 

=======

 

=======

 

=======

 

=======

 

*

Interest expense, income taxes, G&A expense and other, and non-core items.

**

Amounts shown after tax.

7

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EXHIBIT 99.2

Occidental Petroleum Corporation

DR. RAY R. IRANI

Chairman, President and Chief Executive Officer

– Conference Call –

First Quarter 2007 Earnings Announcement

April 24, 2007

Los Angeles, California

Good morning and thank you for joining us.

Consistent with our strategy of focusing on our core areas, we just announced two separate transactions with BP. First, Oxy will acquire for cash BP’s West Texas pipeline system in the Permian Basin. Second, BP will acquire for cash Oxy’s interests in Pakistan.

When this transaction closes in the third quarter, it will further strengthen Oxy’s industry-leading position in the Permian. It will add to our current Permian pipeline assets and will give us a total of 3,844 miles of pipelines in the region with a capacity to transport approximately 190,000 barrels per day from the Permian basin to the market hub at Cushing, Oklahoma.

The exiting of Pakistan, which follows our departure from Russia in January, will further focus our efforts into our major core areas.

1

As you may have read in the press, we have recently submitted proposals for the development of two major sour gas fields to ADNOC officials in the United Arab Emirates. Abu Dhabi has the fifth largest gas reserves in the world. This project has been reported to require an estimated total future capital investment of $10 billion with production estimated at well over a billion cubic feet per day for 25 to 30 years.

In addition, we are in the advanced stages of negotiations on other large oil and gas development projects in our core Middle East/North Africa region.

Before I turn the call over to Steve Chazen, I would like to update you on the Dolphin Project in which we have a 24.5 percent interest. The 230-mile-long natural gas pipeline has been fully tested. Currently, about 300 million cubic feet per day of gas supplied by a third-party is moving through the pipeline system to markets in Dubai. We expect Dolphin gas to begin flowing to the market in July with full-scale production building to an initial two billion cubic feet per day around year-end. I would like to remind everyone that this project was structured to generate a steady stream of cash and earnings for the next 25 years.

I’ll now turn the call over to Steve.

2

Occidental Petroleum Corporation

STEPHEN CHAZEN

Senior Executive Vice President and Chief Financial Officer

– Conference Call –

First Quarter 2007 Earnings Announcement

April 24, 2007

Los Angeles, California

Thank you, Ray.

Net income for the quarter was $1.212 billion, or $1.43 per diluted share, compared to $1.231 billion, or $1.43 per diluted share in the first quarter of 2006. First quarter 2007 core results were $831 million, or $0.98 per diluted share, compared to $1.153 billion, or $1.34 per diluted share in the first quarter of 2006. The 2007 first quarter core results exclude, net of tax: a $412 million gain from the sale of our interest in Russia, a $109 million gain from litigation settlements, a $110 million charge for the completion of a cash tender offer for various debt issues and a $30 million provision for a plant closure.

On a segment basis, oil and gas first quarter 2007 core results, which exclude the gains from the Russian sale and the litigation settlements, were $1.549 billion, compared to $1.910 billion for the first quarter of 2006. The following factors accounted for the change in oil and gas earnings between these quarters:

 

Lower worldwide oil and gas price realizations resulted in a decrease of $233 million of earnings over the comparable period in 2006, of which $96 million was from gas price reductions.

3

 

The average price of West Texas Intermediate crude oil for the first quarter 2007 was $58.24 per barrel which was $5.24 per barrel lower than the first quarter 2006 price of $63.48. Occidental’s average realized price in the 2007 first quarter was $3.60 lower than in the comparable period in 2006.

 

The NYMEX gas price for the quarter was $7.17, compared to $11.42 for the first quarter 2006. Oxy’s domestic average realized gas price for the quarter was $6.38, down from $8.36 for the first quarter 2006.

 

Worldwide oil and gas production for the quarter averaged 587,000 barrels of oil equivalent per day – an increase of 4 percent compared with 563,000 BOE production in the first quarter of last year. The production for both quarters excludes volumes of the Russian non-operated asset sold on January 18, 2007.

 

The production improvement was a result of the Vintage and Plains acquisitions and higher Middle East production in the first quarter. An incident at Elk Hills involving the natural gas gathering lines reduced our net production for the quarter by 14,000 BOE per day.

 

Our guidance for the first quarter was in the range of 590,000 to 600,000 BOE per day. We were slightly under this range due to the February incident at Elk Hills.

 

Exploration expense of $102 million in the quarter was in line with our previous guidance. The first quarter 2007 expense was $31 million higher than the first quarter of 2006, with the increase coming from Colombia and the Middle East / North Africa.

4

Oil and gas operating costs were $11.71 a barrel compared to last year’s $11.23 a barrel, and increased about 2% from the fourth quarter.

Chemical segment earnings for the first quarter 2007 of $137 million was lower than our fourth quarter conference call guidance. January was a strong month; however, industry demand weakened through February and March leading to lower margins. Chemicals earned $250 million in last year’s first quarter. The primary factor that accounted for the quarter-to-quarter difference was lower margins for chlor-alkali and PVC.

Net interest expense, excluding debt retirement charges, was $9 million during the first quarter 2007, compared to $29 million in the 2006 first quarter.

Cash flow from operations for the quarter was approximately $1.6 billion. We received total proceeds of $485 million from the sale of our interest in the Russian joint venture. We used $785 million of the company’s cash flow to fund capital expenditures, $815 million to repurchase debt and $185 million to pay dividends. In addition, we spent $320 million to repurchase 7.0 million common shares at an average price of $45.89 per share. These net cash outlays reduced our $1.6 billion cash balance at the end of last year by $100 million to $1.5 billion at March 31. Debt was $2.24 billion at the end of the quarter, with non-current debt of $1.7 billion.

The weighted average basic shares outstanding for the first quarter were 841.0 million and the weighted average diluted shares outstanding were 846.5 million. At March 31, there were 838.1 million basic shares outstanding and the fully dilutive share amount was approximately 843.6 million.

5

 

Oxy’s annualized return on equity was 25 percent, with an annualized return on capital employed of 24 percent, despite having increased shareholder equity to $20.2 billion, compared to $18 billion a year ago.

As we look ahead in the current quarter:

 

We expect oil and gas production to be in the range of 585,000 to 600,000 BOE per day during the second quarter. The second quarter is expected to include some reduction from PSCs and one less lifting compared to the first quarter production. The previously announced BP transactions will not affect production until their expected closing in the third quarter. We expect this rate to continue until Dolphin comes on stream in the third quarter.

 

A $1.00 per barrel change in oil prices impacts oil and gas quarterly earnings by about $40 million before the impact of income taxes.

 

A swing of 50-cents per million BTUs in gas prices has a $24 million impact on quarterly earnings before income taxes. The NYMEX gas price for the first quarter was $7.17 per thousand cubic feet.

 

We expect exploration expense to be about $110 million for seismic and drilling for our Libya and South American exploration programs.

 

We expect chemical segment earnings to be in the range of $150 to $160 million, compared to the $137 million in the first quarter. Chlorine demand, particularly into vinyls, was weaker in the first quarter, however this has led to a tightening market for its co-

6

 

 

product, caustic soda. We expect caustic soda prices and margins to increase in the second quarter.

 

We expect interest expense to be about $10 million in the second quarter.

 

We will redeem all of the outstanding $276 million of the 8.25% Vintage Petroleum, LLC senior notes on May 1, 2007.

 

We expect our combined worldwide tax rate in the second quarter to remain about 49 percent. Our first quarter U. S. and foreign tax rates are included in the “Investor Relations Supplemental Schedule”.

7

Copies of the press release announcing our first quarter earnings and the Investor Relations Supplemental Schedules are available on our website www.oxy.com or through the SEC’s EDGAR system.

Now we’re ready to take your questions.

 

See the investor relations supplemental schedules for the reconciliation of non-GAAP items. Statements in this presentation that contain words such as "will", "expect" or "estimate", or otherwise relate to the future, are forward-looking and involve risks and uncertainties that could significantly affect expected results. Factors that could cause results to differ materially include, but are not limited to: exploration risks such as drilling of unsuccessful wells; global commodity pricing fluctuations and supply/demand considerations for oil, gas and chemicals; higher-than-expected costs; political risk; changes in tax rates; and not successfully completing (or any material delay in) any expansion, capital expenditure, acquisition, or disposition. You should not place undue reliance on these forward-looking statements which speak only as of the date of this presentation. Unless legally required, Occidental does not undertake any obligation to update any forward-looking statements as a result of new information, future events or otherwise. U.S. investors are urged to consider carefully the disclosure in our Form 10-K, available through the following toll-free telephone number, 1-888-OXYPETE (1-888-699-7383) or on the Internet at http://www.oxy.com. You also can obtain a copy from the SEC by calling 1-800-SEC-0330.

8

Occidental Petroleum Corporation

 

 

 

 

 

 

 

Return on Capital Employed (%)

 

 

 

 

 

 

 

($ Millions)

 

 

 

Three

 

 

 

 

 

 

Months

 

Annualized

Reconciliation to Generally Accepted Accounting Principles (GAAP)

 

2006

2007

 

2007

GAAP measure - earnings applicable to common shareholders

 

4,191

 

1,212

 

 

 

Interest expense

 

131

 

181

 

 

 

Tax effect of interest expense

 

(46

)

(63

)

 

 

Earnings before tax-effected interest expense

 

4,276

 

1,330

 

 

 

GAAP stockholders' equity

 

19,252

 

20,217

 

 

 

DEBT

 

 

 

 

 

 

 

GAAP debt

 

 

 

 

 

 

 

Debt, including current maturities

 

2,790

 

2,140

 

 

 

Non-GAAP debt

 

 

 

 

 

 

 

Capital lease obligation

 

25

 

25

 

 

 

Subsidiary preferred stock

 

75

 

75

 

 

 

Total debt

 

2,890

 

2,240

 

 

 

Total capital employed

 

22,142

 

22,457

 

 

 

Return on Capital Employed (%)

 

21.2

 

6.0

 

 

23.9

EX-99 5 ex993-20070424.htm EXHIBIT 99.3 Exhibit 99.3

EXHIBIT 99.3

Investor Relations Supplemental Schedules

Investor Relations Supplemental Schedules

2007 First Quarter

Summary

($ Millions)

 

 

1Q 2007

 

1Q 2006

Reported Net Income

 

$1,212

 

$1,231

EPS - Diluted

 

$1.43

 

$1.43

Core Results

 

$831

 

$1,153

EPS - Diluted

 

$0.98

 

$1.34

Total Worldwide Production (mboe/day)

 

587

 

563

Total Worldwide Crude Oil Realizations ($/BBL)

 

$51.78

 

$55.38

Domestic Natural Gas Realizations ($/MCF)

 

$6.38

 

$8.36

Wtd. Average Basic Shares O/S (mm)

 

841.0

 

848.5

Wtd. Average Diluted Shares O/S (mm)

 

846.5

 

860.9

Shares Outstanding (mm)

 

833.8

 

856.5

Cash Flow from Operations

 

$1,600

 

$2,000

1

Investor Relations Supplemental Schedules

OCCIDENTAL PETROLEUM

2007 First Quarter

Net Income (Loss)

($ millions)

 

 

 

Reported

Income

 

Significant Items Affecting Income

 

Core

Results

Oil & Gas

 

 

$

2,070

 

 

 

$

(412

)

 

Sale of Russia - Vanyoganneft

 

 

$

1,549

 

 

 

 

 

 

 

 

 

 

(109

)

 

Litigation settlements

 

 

 

 

 

Chemical

 

 

 

137

 

 

 

 

 

 

 

 

 

 

 

137

 

Corporate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

 

 

(181

)

 

 

 

172

 

 

Debt tender offer

 

 

 

(9

)

Other

 

 

 

(111

)

 

 

 

47

 

 

Plant closure

 

 

 

(64

)

Taxes

 

 

 

(703

)

 

 

 

(79

)

 

Tax effect of adjustments

 

 

 

(782

)

 

 

 

 

 

 

 

 

 

-

 

 

 

 

 

 

 

 

Income from continuing operations

 

 

 

1,212

 

 

 

 

(381

)

 

 

 

 

 

831

 

Discontinued operations, net of tax

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

-

 

Net Income

 

 

$

1,212

 

 

 

$

(381

)

 

 

 

 

$

831

 

Basic Earnings Per Common Share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

 

$

1.44

 

 

 

 

 

 

 

 

 

 

 

 

 

Discontinued operations, net

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income

 

 

$

1.44

 

 

 

 

 

 

 

 

 

 

$

0.99

 

Diluted Earnings Per Common Share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

 

$

1.43

 

 

 

 

 

 

 

 

 

 

 

 

 

Discontinued operations, net

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income

 

 

$

1.43

 

 

 

 

 

 

 

 

 

 

$

0.98

 

2

Investor Relations Supplemental Schedules

OCCIDENTAL PETROLEUM

2006 First Quarter

Net Income (Loss)

($ millions)

 

 

 

Reported

Income

 

Significant Items Affecting Income

 

Core

Results

Oil & Gas

 

 

$

1,910

 

 

 

 

 

 

 

 

 

 

$

1,910

 

Chemical

 

 

 

250

 

 

 

 

 

 

 

 

 

 

 

250

 

Corporate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

 

 

(29

)

 

 

 

 

 

 

 

 

 

 

(29

)

Other

 

 

 

(71

)

 

 

 

 

 

 

 

 

 

 

(71

)

Taxes

 

 

 

(907

)

 

 

 

 

 

 

 

 

 

 

(907

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

 

 

1,153

 

 

 

 

-

 

 

 

 

 

 

1,153

 

Discontinued operations, net of tax

 

 

 

78

 

 

 

 

(78

)

 

Discontinued operations, net

 

 

 

-

 

Net Income

 

 

$

1,231

 

 

 

$

(78

)

 

 

 

 

$

1,153

 

Basic Earnings Per Common Share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

 

$

1.36

 

 

 

 

 

 

 

 

 

 

 

 

 

Discontinued operations, net of tax

 

 

 

0.09

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income

 

 

$

1.45

 

 

 

 

 

 

 

 

 

 

$

1.36

 

Diluted Earnings Per Common Share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

 

$

1.34

 

 

 

 

 

 

 

 

 

 

 

 

 

Discontinued operations, net of tax

 

 

 

0.09

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income

 

 

$

1.43

 

 

 

 

 

 

 

 

 

 

$

1.34

 

3

Investor Relations Supplemental Schedules

OCCIDENTAL PETROLEUM

Items Affecting Comparability of Core Earnings Between Periods

The item(s) below are included in core earnings but are shown in this table

because they affect the comparability of core earnings between periods.

 

Pre-tax

 

 

 

 

 

 

Income / (Expense)

First Quarter

 

 

2007

 

2006

 

Corporate

 

 

 

 

 

 

Environmental remediation

(8

)

 

(7

)

4

Investor Relations Supplemental Schedules

OCCIDENTAL PETROLEUM

Worldwide Effective Tax Rate

 

 

 

QUARTERLY

 

REPORTED INCOME

 

2007

QTR 1

 

2006

QTR 4

 

2006

QTR 1

 

Oil & Gas (a)

 

2,070

 

 

1,499

 

 

1,910

 

 

Chemicals

 

137

 

 

157

 

 

250

 

 

Corporate & other

 

(292

)

 

62

 

 

(100

)

 

Pre-tax income

 

1,915

 

 

1,718

 

 

2,060

 

 

Income tax expense

 

 

 

 

 

 

 

 

 

 

Federal and state

 

281

 

 

393

 

 

461

 

 

Foreign (a)

 

422

 

 

402

 

 

446

 

 

Total

 

703

 

 

795

 

 

907

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

1,212

 

 

923

 

 

1,153

 

 

Worldwide effective tax rate

 

37%

 

46%

 

44%

 

CORE RESULTS

 

2007

QTR 1

 

2006

QTR 4

 

2006

QTR 1

 

Oil & Gas (a)

 

1,549

 

 

1,499

 

 

1,910

 

 

Chemicals

 

137

 

 

157

 

 

250

 

 

Corporate & other

 

(73

)

 

(105

)

 

(100

)

 

Pre-tax income

 

1,613

 

 

1,551

 

 

2,060

 

 

Income tax expense

 

 

 

 

 

 

 

 

 

 

Federal and state

 

360

 

 

312

 

 

461

 

 

Foreign (a)

 

422

 

 

402

 

 

446

 

 

Total

 

782

 

 

714

 

 

907

 

 

 

 

 

 

 

 

 

 

 

 

 

Core results

 

831

 

 

837

 

 

1,153

 

 

Worldwide effective tax rate

 

48%

 

46%

 

44%

(a) Revenues and income tax expense include taxes owed by Occidental but paid by governmental entities on its behalf. Oil and Gas pre-tax income includes the following revenue amounts by periods.

 

 

 

2007

QTR 1

 

2006

QTR 4

 

2006

QTR 1

 

 

 

288

 

 

252

 

 

290

 

5

Investor Relations Supplemental Schedules

OCCIDENTAL PETROLEUM

2007 First Quarter Net Income (Loss)

Reported Income Comparison

 

 

First

Quarter

2007

 

Fourth

Quarter

2006

 

B / (W)

Oil & Gas

 

 

$

2,070

 

 

 

$

1,499

 

 

 

$

571

 

Chemical

 

 

 

137

 

 

 

 

157

 

 

 

 

(20

)

Corporate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

 

 

(181

)

 

 

 

(51

)

 

 

 

(130

)

Other

 

 

 

(111

)

 

 

 

113

 

 

 

 

(224

)

Taxes

 

 

 

(703

)

 

 

 

(795

)

 

 

 

92

 

Income from continuing operations

 

 

 

1,212

 

 

 

 

923

 

 

 

 

289

 

Discontinued operations, net

 

 

 

-

 

 

 

 

7

 

 

 

 

(7

)

Net Income

 

 

$

1,212

 

 

 

$

930

 

 

 

$

282

 

Earnings Per Common Share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

$

1.44

 

 

 

$

1.10

 

 

 

$

0.34

 

Diluted

 

 

$

1.43

 

 

 

$

1.09

 

 

 

$

0.34

 

Worldwide Effective Tax Rate

 

 

 

37%

 

 

 

46%

 

 

 

9%

 

OCCIDENTAL PETROLEUM

2007 First Quarter Net Income (Loss)

Core Results Comparison

 

 

First

Quarter

2007

 

Fourth

Quarter

2006

 

B / (W)

Oil & Gas

 

 

$

1,549

 

 

 

$

1,499

 

 

 

$

50

 

Chemical

 

 

 

137

 

 

 

 

157

 

 

 

 

(20

)

Corporate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

 

 

(9

)

 

 

 

(20

)

 

 

 

11

 

Other

 

 

 

(64

)

 

 

 

(85

)

 

 

 

21

 

Taxes

 

 

 

(782

)

 

 

 

(714

)

 

 

 

(68

)

Core Results

 

 

$

831

 

 

 

$

837

 

 

 

$

(6

)

Core Results Per Common Share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

$

0.99

 

 

 

$

0.99

 

 

 

$

-

 

Diluted

 

 

$

0.98

 

 

 

$

0.98

 

 

 

$

-

 

Worldwide Effective Tax Rate

 

 

 

48%

 

 

 

46%

 

 

 

-2%

6

Investor Relations Supplemental Schedules

OCCIDENTAL PETROLEUM

Oil & Gas

Core Results Variance Analysis 1Q07 vs. 4Q06

($ millions)

OCCIDENTAL PETROLEUM

Chemical

Core Results Variance Analysis 1Q07 vs. 4Q06

($ millions)

7

Investor Relations Supplemental Schedules

OCCIDENTAL PETROLEUM

2007 First Quarter Net Income (Loss)

Reported Income Comparison

 

 

First

Quarter

2007

 

First

Quarter

2006

 

B / (W)

Oil & Gas

 

 

$

2,070

 

 

 

$

1,910

 

 

 

$

160

 

Chemical

 

 

 

137

 

 

 

 

250

 

 

 

 

(113

)

Corporate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

 

 

(181

)

 

 

 

(29

)

 

 

 

(152

)

Other

 

 

 

(111

)

 

 

 

(71

)

 

 

 

(40

)

Taxes

 

 

 

(703

)

 

 

 

(907

)

 

 

 

204

 

Income from continuing operations

 

 

 

1,212

 

 

 

 

1,153

 

 

 

 

59

 

Discontinued operations, net

 

 

 

-

 

 

 

 

78

 

 

 

 

(78

)

Net Income

 

 

$

1,212

 

 

 

$

1,231

 

 

 

$

(19

)

Earnings Per Common Share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

$

1.44

 

 

 

$

1.45

 

 

 

$

(0.01

)

Diluted

 

 

$

1.43

 

 

 

$

1.43

 

 

 

$

-

 

Worldwide Effective Tax Rate

 

 

 

37%

 

 

 

44%

 

 

 

7%

 

OCCIDENTAL PETROLEUM

2007 First Quarter Net Income (Loss)

Core Results Comparison

 

 

First

Quarter

2007

 

First

Quarter

2006

 

B / (W)

Oil & Gas

 

 

$

1,549

 

 

 

$

1,910

 

 

 

$

(361

)

Chemical

 

 

 

137

 

 

 

 

250

 

 

 

 

(113

)

Corporate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

 

 

(9

)

 

 

 

(29

)

 

 

 

20

 

Other

 

 

 

(64

)

 

 

 

(71

)

 

 

 

7

 

Taxes

 

 

 

(782

)

 

 

 

(907

)

 

 

 

125

 

Core Results

 

 

$

831

 

 

 

$

1,153

 

 

 

$

(322

)

Core Results Per Common Share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

$

0.99

 

 

 

$

1.36

 

 

 

$

(0.37

)

Diluted

 

 

$

0.98

 

 

 

$

1.34

 

 

 

$

(0.36

)

Worldwide Effective Tax Rate

 

 

 

48%

 

 

 

44%

 

 

 

-4%

8

Investor Relations Supplemental Schedules

OCCIDENTAL PETROLEUM

Oil & Gas

Core Results Variance Analysis 1Q07 vs. 1Q06

($ millions)

OCCIDENTAL PETROLEUM

Chemical

Core Results Variance Analysis 1Q07 vs. 1Q06

($ millions)

9

Investor Relations Supplemental Schedules

OCCIDENTAL PETROLEUM

SUMMARY OF OPERATING STATISTICS

 

 

 

First Quarter

 

 

 

2007

 

2006

 

NET PRODUCTION PER DAY:

 

 

 

 

 

 

 

 

 

United States

 

 

 

 

 

 

 

 

 

Crude Oil and Liquids (MBL)

 

 

 

 

 

 

 

 

 

California

 

 

85

 

 

 

82

 

 

Permian

 

 

165

 

 

 

166

 

 

Horn Mountain

 

 

10

 

 

 

15

 

 

Hugoton and other

 

 

4

 

 

 

3

 

 

Total

 

 

264

 

 

 

266

 

 

Natural Gas (MMCF)

 

 

 

 

 

 

 

 

 

California

 

 

232

 

 

 

250

 

 

Hugoton and other

 

 

150

 

 

 

133

 

 

Permian

 

 

198

 

 

 

189

 

 

Horn Mountain

 

 

5

 

 

 

10

 

 

Total

 

 

585

 

 

 

582

 

 

Latin America

 

 

 

 

 

 

 

 

 

Crude Oil (MBL)

 

 

 

 

 

 

 

 

 

Argentina

 

 

33

 

 

 

24

 

 

Colombia

 

 

42

 

 

 

39

 

 

Total

 

 

75

 

 

 

63

 

 

Natural Gas (MMCF)

 

 

 

 

 

 

 

 

 

Argentina

 

 

21

 

 

 

13

 

 

Bolivia

 

 

14

 

 

 

13

 

 

 

 

 

35

 

 

 

26

 

 

Middle East / North Africa

 

 

 

 

 

 

 

 

 

Crude Oil (MBL)

 

 

 

 

 

 

 

 

 

Oman

 

 

22

 

 

 

17

 

 

Qatar

 

 

46

 

 

 

44

 

 

Yemen

 

 

32

 

 

 

32

 

 

Libya

 

 

26

 

 

 

22

 

 

Total

 

 

126

 

 

 

115

 

 

Natural Gas (MMCF)

 

 

 

 

 

 

 

 

 

Oman

 

 

26

 

 

 

25

 

 

Other Eastern Hemisphere

 

 

 

 

 

 

 

 

 

Crude Oil (MBL)

 

 

 

 

 

 

 

 

 

Pakistan

 

 

4

 

 

 

4

 

 

Natural Gas (MMCF)

 

 

 

 

 

 

 

 

 

Pakistan

 

 

73

 

 

 

75

 

 

Barrels of Oil Equivalent (MBOE)

 

 

 

 

 

 

 

 

 

Subtotal consolidated subsidiaries

 

 

589

 

 

 

566

 

 

Other interests

 

 

 

 

 

 

 

 

 

Colombia – minority interest

 

 

(5

)

 

 

(5

)

 

Yemen – Occidental net interest

 

 

3

 

 

 

2

 

 

Total worldwide production (MBOE) (a)

 

 

587

 

 

 

563

 

(a) Occidental sold its interest in the Russian Vanyoganneft joint venture in January 2007. Russian production has been excluded for comparability.

10

Investor Relations Supplemental Schedules

OCCIDENTAL PETROLEUM

SUMMARY OF OPERATING STATISTICS

 

 

 

First Quarter

 

 

 

2007

 

2006

 

OIL & GAS:

 

 

 

 

 

 

 

 

 

PRICES

 

 

 

 

 

 

 

 

 

United States

 

 

 

 

 

 

 

 

 

Crude Oil ($/BBL)

 

 

52.17

 

 

 

55.25

 

 

Natural gas ($/MCF)

 

 

6.38

 

 

 

8.36

 

 

Latin America

 

 

 

 

 

 

 

 

 

Crude Oil ($/BBL)

 

 

45.71

 

 

 

51.82

 

 

Natural Gas ($/MCF)

 

 

1.94

 

 

 

1.76

 

 

Middle East / North Africa

 

 

 

 

 

 

 

 

 

Crude Oil ($/BBL)

 

 

55.31

 

 

 

57.94

 

 

Natural Gas ($/MCF)

 

 

0.97

 

 

 

0.97

 

 

Other Eastern Hemisphere

 

 

 

 

 

 

 

 

 

Crude Oil ($/BBL)

 

 

49.67

 

 

 

50.63

 

 

Natural Gas ($/MCF)

 

 

2.95

 

 

 

2.85

 

 

Total Worldwide (a)

 

 

 

 

 

 

 

 

 

Crude Oil ($/BBL)

 

 

51.78

 

 

 

55.38

 

 

Natural Gas ($/MCF)

 

 

5.59

 

 

 

7.20

 

 

 

 

First Quarter

 

 

 

2007

 

2006

 

Exploration Expense

 

 

 

 

 

 

 

 

 

 

 

Domestic

 

 

$

18

 

 

 

$

32

 

 

Latin America

 

 

 

23

 

 

 

 

3

 

 

Middle East / North Africa

 

 

 

53

 

 

 

 

23

 

 

Other Eastern Hemisphere

 

 

 

8

 

 

 

 

13

 

 

TOTAL

 

 

$

102

 

 

 

$

71

 

(a) Occidental sold its interest in the Russian Vanyoganneft joint venture in January 2007. Russian production has been excluded for comparability.

11

Investor Relations Supplemental Schedules

OCCIDENTAL PETROLEUM

SUMMARY OF OPERATING STATISTICS

 

 

 

First Quarter

 

Capital Expenditures ($MM)

 

2007

 

2006

 

Oil & Gas

 

 

 

 

 

 

 

 

 

 

 

California

 

 

$

132

 

 

 

$

103

 

 

Permian

 

 

 

164

 

 

 

 

127

 

 

Other – U.S.

 

 

 

44

 

 

 

 

67

 

 

Latin America

 

 

 

114

 

 

 

 

47

 

 

Middle East / North Africa

 

 

 

293

 

 

 

 

209

 

 

Other Eastern Hemisphere

 

 

 

4

 

 

 

 

6

 

 

Chemicals

 

 

 

27

 

 

 

 

33

 

 

Corporate

 

 

 

6

 

 

 

 

4

 

 

TOTAL

 

 

$

784

 

 

 

$

596

 

 

Depreciation, Depletion &

 

First Quarter

 

Amortization of Assets ($MM)

 

2007

 

2006

 

Oil & Gas

 

 

 

 

 

 

 

 

 

 

 

Domestic

 

 

$

251

 

 

 

$

205

 

 

Latin America

 

 

 

90

 

 

 

 

49

 

 

Middle East / North Africa

 

 

 

153

 

 

 

 

129

 

 

Other Eastern Hemisphere

 

 

 

9

 

 

 

 

9

 

 

Chemicals

 

 

 

73

 

 

 

 

66

 

 

Corporate

 

 

 

12

 

 

 

 

5

 

 

TOTAL

 

 

$

588

 

 

 

$

463

 

12

Investor Relations Supplemental Schedules

OCCIDENTAL PETROLEUM

CORPORATE

($ millions)

 

31-Mar-07

 

31-Dec-06

CAPITALIZATION

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-Term Debt (including current maturities)

 

 

$

2,140

 

 

 

 

 

$

2,790

 

 

Subsidiary Preferred Stock

 

 

 

75

 

 

 

 

 

 

75

 

 

Others

 

 

 

25

 

 

 

 

 

 

25

 

 

Total Debt

 

 

$

2,240

 

 

 

 

 

$

2,890

 

 

EQUITY

 

 

$

20,217

 

 

 

 

 

$

19,252

 

 

Total Debt To Total Capitalization

 

 

 

10%

 

 

 

 

 

13%

 

13

Investor Relations Supplemental Schedules

See the investor relations supplemental schedules for the reconciliation of non-GAAP items. Statements in this presentation that contain words such as "will", "expect" or "estimate", or otherwise relate to the future, are forward-looking and involve risks and uncertainties that could materially affect expected results. Factors that could cause results to differ materially include, but are not limited to: exploration risks, such as drilling of unsuccessful wells; global commodity pricing fluctuations and supply/demand considerations for oil, gas and chemicals; higher-than-expected costs; political risk; and not successfully completing (or any material delay in) any expansion, capital expenditure, acquisition, or disposition. You should not place undue reliance on these forward-looking statements which speak only as of the date of this filing. Unless legally required, Occidental disclaims any obligation to update any forward-looking statements as a result of new information, future events or otherwise. U.S. investors are urged to consider carefully the disclosure in our Form 10-K, available through the following toll-free telephone number, 1-888-OXYPETE (1-888-699-7383) or on the Internet at http://www.oxy.com. You also can obtain a copy from the SEC by calling 1-800-SEC-0330.

14

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MB1O*M.C6A%T5_L.Z%2%5L3L=5D`[-6/9L57#'E4K<:S-FGO%]OH+.+#@P80+ M&]8QZN^K-JT`+[[3N-=CQJ@D*ZFTJU0JS+@T!^) EX-99 11 ex994-20070424.htm EXHIBIT 99.4 Exhibit 99.4

EXHIBIT 99.4

First Quarter 2007

Earnings Conference Call

April 24, 2007

1

First Quarter 2007 Earnings - Highlights

Reported Net Income - $1.212 Billion

Reported EPS $1.43 (diluted)

Core Results - $831 Million

Core Results EPS $0.98 (diluted)

Excludes:

$412 mm A-T gain from the sale of our interest in Russia.

$109 mm A-T gain from litigation settlements.

$110 mm charge for the completion of a cash tender
offer for various debt issues.

$30 mm provision for a plant closure.

2

First Quarter 2007 Earnings - Oil & Gas Segment
Variance Analysis - 1Q07 vs. 1Q06

Core Results for 1Q07 of $1.549 Billion

-19% year-over-year

($ in millions)

$1,910

1Q 06

$233

Sales Price

$64

Sales

Volume/Mix

$31

Exploration

Expense

$161

All Others

$1,549

1Q 07

3

First Quarter 2007 Earnings - Oil & Gas
Segment

1Q07

1Q06

Reported Segment Earnings ($ mm)

$2,070

$1,910

WTI Oil Price ($/bbl)

$58.24

$63.48

NYMEX Gas Price ($/mcf)

$7.17

$11.42

Oxy’s Realized Prices

Worldwide Oil ($/bbl)

$51.78

$55.38

US Natural Gas ($/mcf)

$6.38

$8.36

4

First Quarter 2007 Earnings - Oil & Gas
Segment

1Q07

1Q06

Oil and Gas Production (mboe/day)

587

563

+4% year-over-year

Production for both quarters excludes volumes

of Russian non-operated asset sold 1/18/07.

Production increase due to:

Acquisition of Vintage Petroleum and Plains.

Higher Middle East production.

An incident at Elk Hills in February reduced

net production in 1Q07 by 14 mboe/day, causing

worldwide production to be slightly below our

earlier guidance.

5

First Quarter 2007 Earnings - Oil & Gas
Segment

1Q07

1Q06

Exploration Expense ($ mm)

$102

$71

Increase due to Colombia and

Middle East/North Africa

Oil and Gas operating costs were $11.71 per boe in 1Q07
vs. $11.23 per boe for full-year 2006.

These costs increased about 2% from 4Q06.

6

First Quarter 2007 Earnings – Chemicals Segment
Variance Analysis - 1Q07 vs. 1Q06

Core Results for 1Q07 of $137 Million

-45% year-over-year, and lower than previous guidance.

Primary factor accounting for quarter-to-quarter difference was
lower margins for chlor-alkali and PVC.

($ in millions)

$250

1Q 06

$148

Sales Price

$22

Sales

Volume/Mix

$56

Operations/

Manufacturing

$1

All Others

$137

1Q 07

7

First Quarter 2007 Earnings – Cash Flow

($ in millions)

$3,200

Cash

Flow From

Operations

$1,600

Beginning

Cash

$1,600

Available

Cash

$485

Asset Sale

Proceeds

$785

Capex

Acquisitions

$815

Debt

Reduction

$185

Dividends

$320

Share

Repurchase

$80

Other

$1,500

Ending Cash

Balance

8

First Quarter 2007 Earnings - Share Repurchase

Spent $320 million to repurchase 7.0 million shares in
1Q07 at an average price of $45.89 a share.

18.7 million shares remain under the current 55 million
share repurchase authorization.

Shares Outstanding (mm)

1Q07

3/31/07

Weighted Average Basic

841.0

Weighted Average Diluted

846.5

Basic Shares Outstanding

838.1

Diluted Shares Outstanding

843.6

9

First Quarter 2007 Earnings - 2Q07 Outlook

We expect Oil and Gas production in the range of 585 to
600 mboe/day in 2Q07.

2Q07 is expected to include some reduction from PSCs and one
less lifting compared to the 1Q07 production.

Previously announced BP transactions will not affect production
until their expected closing in 3Q07.

Expect 2Q07 production rate to continue until the Dolphin Project
comes on stream.

Commodity Price Sensitivity

A $1.00 per barrel change in oil prices impacts oil and gas quarterly
earnings by about $40 million (pre-tax).

A change of 50-cents per million BTUs in gas prices has a $24
million impact on quarterly earnings (pre-tax).  The NYMEX gas
price for 1Q07 was $7.17 per mcf.

Exploration expense of about $110 million for seismic
and drilling for our Libya and South American programs.

10

First Quarter 2007 Earnings - 2Q07 Outlook

Expect 2Q07 Chemical Earnings to be in the range of
$150 to $160 million compared to $137 million in 1Q07.

Chlorine demand, particularly into vinyls, was weaker in 1Q07,
however this has led to a tightening market for its co-product,
caustic soda.

We expect caustic soda prices and margins to increase in 2Q07.

Expect Interest Expense to be about $10 million in 2Q07.

We will redeem all of the outstanding $276 million of the 8.25%
Vintage Petroleum, LLC senior notes on May 1, 2007.

Expect our combined worldwide tax rate in 2Q07 to
remain about 49 percent.

11

First Quarter 2007 Earnings

See the investor relations supplemental schedules for the reconciliation of non-
GAAP items.  Statements in this presentation that contain words such as "will",
"expect" or "estimate", or otherwise relate to the future, are forward-looking and
involve risks and uncertainties that could materially affect expected
results.  Factors that could cause results to differ materially include, but are not
limited to:  exploration risks, such as drilling of unsuccessful wells; global
commodity pricing fluctuations and supply/demand considerations for oil, gas
and chemicals; higher-than-expected costs; political risk; and not successfully
completing (or any material delay in) any expansion, capital expenditure,
acquisition, or disposition.  You should not place undue reliance on these
forward-looking statements which speak only as of the date of this presentation.  
Unless legally required, Occidental disclaims any obligation to update any
forward-looking statements as a result of new information, future events or
otherwise.  U.S. investors are urged to consider carefully the disclosure in our
Form 10-K, available through the following toll-free telephone number, 1-888-
OXYPETE (1-888-699-7383) or on the Internet at
http://www.oxy.com.  You also
can obtain a copy from the SEC by calling 1-800-SEC-0330.

12

Occidental Petroleum Corporation

 

 

 

 

 

Cash and Cash Equivalents

 

 

 

 

 

($ Millions)

 

 

 

 

 

Reconciliation to Generally Accepted Accounting Principles (GAAP)

 

 

 

 

 

 

 

31-Dec-06

31-Mar-07

Cash and cash equivalents

 

1,339

 

1,292

 

Short-term investments

 

240

 

213

 

 

 

1,579

 

1,505

 

Roundings for presentation

 

21

 

(5

)

 

 

1,600

 

1,500

 

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