-----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, PPbC7ZX5I4I+D7yKO87ugyqklJDKcC9weEM2BMsXcwmwP3hNFQaMmLMcNRFUSEAV 0GcSlDqFrmvQ+3m89afQ8w== 0000797468-08-000047.txt : 20080424 0000797468-08-000047.hdr.sgml : 20080424 20080424112910 ACCESSION NUMBER: 0000797468-08-000047 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 26 CONFORMED PERIOD OF REPORT: 20080424 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Other Events ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20080424 DATE AS OF CHANGE: 20080424 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: 08773578 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-20080424.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, 2008

 

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, 2008, Occidental Petroleum Corporation released information regarding its results of operations for the three months ended March 31, 2008. 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 speech given by 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, 2008, Occidental Petroleum Corporation announced net income of $1.846 billion ($2.23 per diluted share) for the first quarter of 2008, compared with $1.212 billion ($1.43 per diluted share) for the first quarter of 2007.

 

Core results for the first quarter of 2008 were $1.819 billion ($2.20 per diluted share), compared with $788 million ($0.93 per diluted share) for the first quarter of 2007.

 

Oil and Gas

 

Oil and gas segment earnings were $2.888 billion for the first quarter of 2008, compared with $1.883 billion for the same period in 2007. Oil and gas core results for the first quarter of 2007 were $1.362 billion, after excluding a $412 million gain from the sale of Occidental's Russian joint venture and $109 million gain from the resolution of certain legal disputes. The $1.5 billion increase in the first quarter 2008 core results reflected $1.6 billion of increases from record crude oil and higher natural gas prices, production from the Dolphin project coming on line in the second half of 2007, partially offset by increased DD&A rates and higher operating expenses.

 

For the first quarter of 2008, daily oil and gas production averaged 607,000 barrels of oil equivalent (BOE), compared with 560,000 BOE per day produced in the first quarter of 2007. The bulk of the production increase was the result of 55,000 BOE per day from the Dolphin project, which began production in the third quarter of 2007, partially offset by lower volumes from our production sharing contracts due to higher prices.

 

Oxy's realized price for worldwide crude oil was $86.75 per barrel for the first quarter of 2008, compared with $51.67 per barrel for the first quarter of 2007. Domestic realized gas prices increased from $6.38 per MCF in the first quarter of 2007 to $8.15 per MCF for the first quarter of 2008.

 

Chemicals

Chemical segment earnings for the first quarter of 2008 were $179 million, compared with $137 million for the same period in 2007. The first quarter of 2008 results reflect higher margins for caustic soda.

 

 

1

 

Midstream, Marketing and Other

 

Occidental's midstream, marketing and other segment gathers, processes, transports, stores, and markets crude oil, natural gas, natural gas liquids and CO2. The transportation and storage systems primarily serve operations from New Mexico across the Permian Basin to Cushing, Oklahoma. Occidental's 24.5-percent equity interest in the Dolphin pipeline project is also included in this segment. Additionally, this segment also generates electricity at facilities in Texas, Louisiana and California.

 

Midstream segment preliminary earnings were approximately $123 million for the first quarter of 2008, compared with approximately $119 million for the first quarter of 2007. Prior period oil and gas segment earnings have been revised to remove these midstream results.

 

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; operational interruptions; 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)

 

 

2008

 

 

2007

 

 

 

 

 

 

 

SEGMENT NET SALES

 

 

 

 

 

 

 

 

 

 

 

 

 

Oil and Gas

 

$

4,518

 

$

2,720

 

 

 

 

 

 

 

Chemical

 

 

1,267

 

 

1,060

 

 

 

 

 

 

 

Midstream, marketing and other

 

 

405

 

 

358

 

 

 

 

 

 

 

Eliminations

 

 

(170

)

 

(123

)

 

 

 

 

 

 

Net sales

 

$

6,020

 

$

4,015

 

 

 

 

 

 

 

SEGMENT EARNINGS

 

 

 

 

 

 

 

 

 

 

 

 

 

Oil and Gas (a)

 

$

2,888

 

$

1,883

 

 

 

 

 

 

 

Chemical

 

 

179

 

 

137

 

 

 

 

 

 

 

Midstream, marketing and other

 

 

123

 

 

119

 

 

 

 

 

 

 

 

 

 

3,190

 

 

2,139

 

 

 

 

 

 

 

Unallocated Corporate Items

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net (b)

 

 

 

 

(181

)

 

 

 

 

 

 

Income taxes

 

 

(1,294

)

 

(684

)

 

 

 

 

 

 

Other (c)

 

 

(77

)

 

(105

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from Continuing Operations

 

 

1,819

 

 

1,169

 

 

 

 

 

 

 

Discontinued operations, net (d)

 

 

27

 

 

43

 

 

 

 

 

 

 

NET INCOME

 

$

1,846

 

$

1,212

 

 

 

 

 

 

 

BASIC EARNINGS PER COMMON SHARE

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

2.21

 

$

1.39

 

 

 

 

 

 

 

Discontinued operations, net

 

 

0.03

 

 

0.05

 

 

 

 

 

 

 

 

 

$

2.24

 

$

1.44

 

 

 

 

 

 

 

DILUTED EARNINGS PER COMMON SHARE

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

2.20

 

$

1.38

 

 

 

 

 

 

 

Discontinued operations, net

 

 

0.03

 

 

0.05

 

 

 

 

 

 

 

 

 

$

2.23

 

$

1.43

 

 

 

 

 

 

 

AVERAGE BASIC COMMON SHARES OUTSTANDING

 

 

 

 

 

 

 

 

 

 

 

 

 

BASIC

 

 

823.6

 

 

841.0

 

 

 

 

 

 

 

DILUTED

 

 

828.2

 

 

846.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See footnotes on following page.

 

 

3

 

(a)

Oil and Gas - Prior period oil and gas segment results have been revised to remove midstream results. The first quarter of 2007 includes after-tax gains of $412 million from the sale of Occidental's Russian joint venture and $109 million resulting from the resolution of certain legal disputes.

 

 

(b)

Interest Expense, net - The first quarter of 2008 includes $3 million pre-tax interest charges for the defeasance of various debt issues. The first quarter of 2007 includes $172 million of pre-tax interest charges for the purchase of various debt issues in the open market.

 

 

(c)

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

 

 

(d)

Discontinued Operations, net - In the first quarter of 2008, Occidental received payment from Ecuador for disputed tax refunds. In 2007, Occidental completed an exchange of oil and gas interests in Horn Mountain with BP p.l.c. (BP) for oil and gas interests in the Permian Basin and a gas processing plant in Texas. Occidental also sold its oil and gas interests in Pakistan to BP.

 

SUMMARY OF CAPITAL EXPENDITURES AND DD&A EXPENSE

 

 

 

First Quarter

 

 

 

 

 

 

 

($ millions)

 

 

2008

 

 

2007

 

 

 

 

 

 

 

CAPITAL EXPENDITURES

 

$

868

 

$

780

 

 

 

 

 

 

 

DEPRECIATION, DEPLETION AND

 

 

 

 

 

 

 

 

 

 

 

 

 

AMORTIZATION OF ASSETS

 

$

653

 

$

574

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4

 

SUMMARY OF OPERATING STATISTICS

 

 

First Quarter

 

 

 

 

 

 

 

2008

 

2007

 

 

 

 

 

NET OIL, GAS AND LIQUIDS

 

 

 

 

 

 

 

 

 

PRODUCTION PER DAY

 

 

 

 

 

 

 

 

 

United States

 

 

 

 

 

 

 

 

 

Crude Oil and Liquids (MBBL)

 

 

 

 

 

 

 

 

 

California

 

87

 

85

 

 

 

 

 

Permian

 

170

 

165

 

 

 

 

 

Hugoton and other

 

4

 

4

 

 

 

 

 

Total

 

261

 

254

 

 

 

 

 

Natural Gas (MMCF)

 

 

 

 

 

 

 

 

 

California

 

245

 

232

 

 

 

 

 

Hugoton and other

 

158

 

150

 

 

 

 

 

Permian

 

177

 

198

 

 

 

 

 

Total

 

580

 

580

 

 

 

 

 

Latin America

 

 

 

 

 

 

 

 

 

Crude Oil (MBBL)

 

 

 

 

 

 

 

 

 

Argentina

 

37

 

33

 

 

 

 

 

Colombia

 

42

 

42

 

 

 

 

 

Total

 

79

 

75

 

 

 

 

 

Natural Gas (MMCF)

 

 

 

 

 

 

 

 

 

Argentina

 

22

 

21

 

 

 

 

 

Bolivia

 

21

 

14

 

 

 

 

 

Total

 

43

 

35

 

 

 

 

 

Middle East/North Africa

 

 

 

 

 

 

 

 

 

Crude Oil (MBBL)

 

 

 

 

 

 

 

 

 

Oman

 

20

 

22

 

 

 

 

 

Dolphin

 

22

 

 

 

 

 

 

Qatar

 

46

 

46

 

 

 

 

 

Yemen

 

25

 

32

 

 

 

 

 

Libya

 

17

 

26

 

 

 

 

 

Total

 

130

 

126

 

 

 

 

 

Natural Gas (MMCF)

 

 

 

 

 

 

 

 

 

Oman

 

23

 

26

 

 

 

 

 

Dolphin

 

200

 

 

 

 

 

 

 

 

223

 

26

 

 

 

 

 

Barrels of Oil Equivalent (MBOE)

 

 

 

 

 

 

 

 

 

Subtotal consolidated subsidiaries

 

611

 

562

 

 

 

 

 

Colombia-minority interest

 

(6

)

(5

)

 

 

 

 

Yemen-Occidental net interest

 

2

 

3

 

 

 

 

 

Total Worldwide Production (MBOE)

 

607

 

560

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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.

 

 

6

 

 

 

First Quarter

 

($ millions, except

 

 

 

 

Diluted

 

 

 

 

Diluted

 

per-share amounts)

 

 

2008

 

 

EPS

 

 

2007

 

 

EPS

 

TOTAL REPORTED EARNINGS

 

$

1,846

 

$

2.23

 

$

1,212

 

$

1.43

 

Oil and Gas

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Earnings

 

$

2,888

 

 

 

 

$

1,883

 

 

 

 

Less:

 

 

 

 

 

 

 

 

 

 

 

 

 

Russia joint venture

 

 

 

 

 

 

 

412

 

 

 

 

Legal settlements**

 

 

 

 

 

 

 

109

 

 

 

 

Segment Core Results

 

 

2,888

 

 

 

 

 

1,362

 

 

 

 

Chemicals

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Earnings

 

 

179

 

 

 

 

 

137

 

 

 

 

No significant items affecting earnings

 

 

 

 

 

 

 

 

 

 

 

Segment Core Results

 

 

179

 

 

 

 

 

137

 

 

 

 

Midstream, marketing and other

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Earnings

 

 

123

 

 

 

 

 

119

 

 

 

 

No significant items affecting Earnings

 

 

 

 

 

 

 

 

 

 

 

Segment Core Results

 

 

123

 

 

 

 

 

119

 

 

 

 

Total Segment Core Results

 

 

3,190

 

 

 

 

 

1,618

 

 

 

 

Corporate

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate Results — Non Segment*

 

 

(1,344

)

 

 

 

 

(927

)

 

 

 

Less:

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt purchase expense

 

 

 

 

 

 

 

(172

)

 

 

 

Facility closure

 

 

 

 

 

 

 

(47

)

 

 

 

Tax effect of pre-tax adjustments

 

 

 

 

 

 

 

79

 

 

 

 

Discontinued operations, net**

 

 

27

 

 

 

 

 

43

 

 

 

 

Corporate Core Results — Non Segment

 

 

(1,371

)

 

 

 

 

(830

)

 

 

 

TOTAL CORE RESULTS

 

$

1,819

 

$

2.20

 

$

788

 

$

0.93

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

*

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

**

Amounts shown after tax.

 

 

7

 

Section 9 – Financial Statements and Exhibits

 

Item 9.01.  Financial Statements and Exhibits

 

(d)  Exhibits

 

 

99.1

Press release dated April 24, 2008.

 

 

 

 

99.2

Full text of speech given by Stephen I. Chazen.

 

 

 

 

99.3

Investor Relations Supplemental Schedules.

 

 

 

 

99.4

Earnings Conference Call Slides.

 

 

8

 

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, 2008

/s/ JIM A. LEONARD

 

Jim A. Leonard, Vice President and Controller

(Principal Accounting and Duly Authorized Officer)

 

 

9

 

EXHIBIT INDEX

 

 

99.1

 

Press release dated April 24, 2008.

 

 

 

99.2

 

Full text of speech given by Stephen I. Chazen.

 

 

 

99.3

 

Investor Relations Supplemental Schedules.

 

 

 

99.4

 

Earnings Conference Call Slides.

EX-99 2 ex991-20080424.htm EXHIBIT 99.1 Exhibit 99.1

EXHIBIT 99.1

For Immediate Release: April 24, 2008

Occidental Petroleum Announces Record First Quarter Net Income

LOS ANGELES, Apr. 24, 2008 -- Occidental Petroleum Corporation (NYSE: OXY) announced net income of $1.846 billion ($2.23 per diluted share) for the first quarter of 2008, compared with $1.212 billion ($1.43 per diluted share) for the first quarter of 2007.

Core results for the first quarter of 2008 were $1.819 billion ($2.20 per diluted share), compared with $788 million ($0.93 per diluted share) for the first quarter of 2007.

In announcing the results, Dr. Ray R. Irani, Chairman and Chief Executive Officer, said, "Our net income for the first quarter of 2008 set a new company record, driven by an 8.4-percent increase in production over last year's first quarter, as well as improved oil and gas prices. These results continue our momentum from 2007, the most successful year in Oxy's history, and provide a strong start to propel us into the remainder of 2008."

Oil and Gas

Oil and gas segment earnings were $2.888 billion for the first quarter of 2008, compared with $1.883 billion for the same period in 2007. Oil and gas core results for the first quarter of 2007 were $1.362 billion, after excluding a $412 million gain from the sale of Occidental's Russian joint venture and $109 million gain from the resolution of certain legal disputes. The $1.5 billion increase in the first quarter 2008 core results reflected $1.6 billion of increases from record crude oil and higher natural gas prices, production from the Dolphin project coming on line in the second half of 2007, partially offset by increased DD&A rates and higher operating expenses.

For the first quarter of 2008, daily oil and gas production averaged 607,000 barrels of oil equivalent (BOE), compared with 560,000 BOE per day produced in the first quarter of 2007. The bulk of the production increase was the result of 55,000 BOE per day from the Dolphin project, which began

 

 

production in the third quarter of 2007, partially offset by lower volumes from our production sharing contracts due to higher prices.

Oxy's realized price for worldwide crude oil was $86.75 per barrel for the first quarter of 2008, compared with $51.67 per barrel for the first quarter of 2007. Domestic realized gas prices increased from $6.38 per MCF in the first quarter of 2007 to $8.15 per MCF for the first quarter of 2008.

Chemicals

Chemical segment earnings for the first quarter of 2008 were $179 million, compared with $137 million for the same period in 2007. The first quarter of 2008 results reflect higher margins for caustic soda.

Midstream, Marketing and Other

Occidental's midstream, marketing and other segment gathers, processes, transports, stores, and markets crude oil, natural gas, natural gas liquids and CO2. The transportation and storage systems primarily serve operations from New Mexico across the Permian Basin to Cushing, Oklahoma. Occidental's 24.5-percent equity interest in the Dolphin pipeline project is also included in this segment. Additionally, this segment also generates electricity at facilities in Texas, Louisiana and California.

Midstream segment preliminary earnings were approximately $123 million for the first quarter of 2008, compared with approximately $119 million for the first quarter of 2007. Prior period oil and gas segment earnings have been revised to remove these midstream results.

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

 

 

2

 

communities and 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; operational interruptions; 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)

 

richard_kline@oxy.com

 

310-443-6249

 

 

 

Chris Stavros (investors)

 

chris_stavros@oxy.com

 

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)

 

 

2008

 

 

2007

 

 

 

 

 

 

 

SEGMENT NET SALES

 

 

 

 

 

 

 

 

 

 

 

 

 

Oil and Gas

 

$

4,518

 

$

2,720

 

 

 

 

 

 

 

Chemical

 

 

1,267

 

 

1,060

 

 

 

 

 

 

 

Midstream, marketing and other

 

 

405

 

 

358

 

 

 

 

 

 

 

Eliminations

 

 

(170

)

 

(123

)

 

 

 

 

 

 

Net sales

 

$

6,020

 

$

4,015

 

 

 

 

 

 

 

SEGMENT EARNINGS

 

 

 

 

 

 

 

 

 

 

 

 

 

Oil and Gas (a)

 

$

2,888

 

$

1,883

 

 

 

 

 

 

 

Chemical

 

 

179

 

 

137

 

 

 

 

 

 

 

Midstream, marketing and other

 

 

123

 

 

119

 

 

 

 

 

 

 

 

 

 

3,190

 

 

2,139

 

 

 

 

 

 

 

Unallocated Corporate Items

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net (b)

 

 

 

 

(181

)

 

 

 

 

 

 

Income taxes

 

 

(1,294

)

 

(684

)

 

 

 

 

 

 

Other (c)

 

 

(77

)

 

(105

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from Continuing Operations

 

 

1,819

 

 

1,169

 

 

 

 

 

 

 

Discontinued operations, net (d)

 

 

27

 

 

43

 

 

 

 

 

 

 

NET INCOME

 

$

1,846

 

$

1,212

 

 

 

 

 

 

 

BASIC EARNINGS PER COMMON SHARE

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

2.21

 

$

1.39

 

 

 

 

 

 

 

Discontinued operations, net

 

 

0.03

 

 

0.05

 

 

 

 

 

 

 

 

 

$

2.24

 

$

1.44

 

 

 

 

 

 

 

DILUTED EARNINGS PER COMMON SHARE

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

2.20

 

$

1.38

 

 

 

 

 

 

 

Discontinued operations, net

 

 

0.03

 

 

0.05

 

 

 

 

 

 

 

 

 

$

2.23

 

$

1.43

 

 

 

 

 

 

 

AVERAGE BASIC COMMON SHARES OUTSTANDING

 

 

 

 

 

 

 

 

 

 

 

 

 

BASIC

 

 

823.6

 

 

841.0

 

 

 

 

 

 

 

DILUTED

 

 

828.2

 

 

846.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See footnotes on following page.

 

 

4

 

(a)

Oil and Gas - Prior period oil and gas segment results have been revised to remove midstream results. The first quarter of 2007 includes after-tax gains of $412 million from the sale of Occidental's Russian joint venture and $109 million resulting from the resolution of certain legal disputes.

 

 

(b)

Interest Expense, net - The first quarter of 2008 includes $3 million pre-tax interest charges for the defeasance of various debt issues. The first quarter of 2007 includes $172 million of pre-tax interest charges for the purchase of various debt issues in the open market.

 

 

(c)

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

 

 

(d)

Discontinued Operations, net - In the first quarter of 2008, Occidental received payment from Ecuador for disputed tax refunds. In 2007, Occidental completed an exchange of oil and gas interests in Horn Mountain with BP p.l.c. (BP) for oil and gas interests in the Permian Basin and a gas processing plant in Texas. Occidental also sold its oil and gas interests in Pakistan to BP.

 

SUMMARY OF CAPITAL EXPENDITURES AND DD&A EXPENSE

 

 

 

First Quarter

 

 

 

 

 

 

 

($ millions)

 

 

2008

 

 

2007

 

 

 

 

 

 

 

CAPITAL EXPENDITURES

 

$

868

 

$

780

 

 

 

 

 

 

 

DEPRECIATION, DEPLETION AND

 

 

 

 

 

 

 

 

 

 

 

 

 

AMORTIZATION OF ASSETS

 

$

653

 

$

574

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5

 

SUMMARY OF OPERATING STATISTICS

 

 

First Quarter

 

 

 

 

 

 

 

2008

 

2007

 

 

 

 

 

NET OIL, GAS AND LIQUIDS

 

 

 

 

 

 

 

 

 

PRODUCTION PER DAY

 

 

 

 

 

 

 

 

 

United States

 

 

 

 

 

 

 

 

 

Crude Oil and Liquids (MBBL)

 

 

 

 

 

 

 

 

 

California

 

87

 

85

 

 

 

 

 

Permian

 

170

 

165

 

 

 

 

 

Hugoton and other

 

4

 

4

 

 

 

 

 

Total

 

261

 

254

 

 

 

 

 

Natural Gas (MMCF)

 

 

 

 

 

 

 

 

 

California

 

245

 

232

 

 

 

 

 

Hugoton and other

 

158

 

150

 

 

 

 

 

Permian

 

177

 

198

 

 

 

 

 

Total

 

580

 

580

 

 

 

 

 

Latin America

 

 

 

 

 

 

 

 

 

Crude Oil (MBBL)

 

 

 

 

 

 

 

 

 

Argentina

 

37

 

33

 

 

 

 

 

Colombia

 

42

 

42

 

 

 

 

 

Total

 

79

 

75

 

 

 

 

 

Natural Gas (MMCF)

 

 

 

 

 

 

 

 

 

Argentina

 

22

 

21

 

 

 

 

 

Bolivia

 

21

 

14

 

 

 

 

 

Total

 

43

 

35

 

 

 

 

 

Middle East/North Africa

 

 

 

 

 

 

 

 

 

Crude Oil (MBBL)

 

 

 

 

 

 

 

 

 

Oman

 

20

 

22

 

 

 

 

 

Dolphin

 

22

 

 

 

 

 

 

Qatar

 

46

 

46

 

 

 

 

 

Yemen

 

25

 

32

 

 

 

 

 

Libya

 

17

 

26

 

 

 

 

 

Total

 

130

 

126

 

 

 

 

 

Natural Gas (MMCF)

 

 

 

 

 

 

 

 

 

Oman

 

23

 

26

 

 

 

 

 

Dolphin

 

200

 

 

 

 

 

 

 

 

223

 

26

 

 

 

 

 

Barrels of Oil Equivalent (MBOE)

 

 

 

 

 

 

 

 

 

Subtotal consolidated subsidiaries

 

611

 

562

 

 

 

 

 

Colombia-minority interest

 

(6

)

(5

)

 

 

 

 

Yemen-Occidental net interest

 

2

 

3

 

 

 

 

 

Total Worldwide Production (MBOE)

 

607

 

560

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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.

 

 

7

 

 

 

First Quarter

 

($ millions, except

 

 

 

 

Diluted

 

 

 

 

Diluted

 

per-share amounts)

 

 

2008

 

 

EPS

 

 

2007

 

 

EPS

 

TOTAL REPORTED EARNINGS

 

$

1,846

 

$

2.23

 

$

1,212

 

$

1.43

 

Oil and Gas

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Earnings

 

$

2,888

 

 

 

 

$

1,883

 

 

 

 

Less:

 

 

 

 

 

 

 

 

 

 

 

 

 

Russia joint venture

 

 

 

 

 

 

 

412

 

 

 

 

Legal settlements**

 

 

 

 

 

 

 

109

 

 

 

 

Segment Core Results

 

 

2,888

 

 

 

 

 

1,362

 

 

 

 

Chemicals

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Earnings

 

 

179

 

 

 

 

 

137

 

 

 

 

No significant items affecting earnings

 

 

 

 

 

 

 

 

 

 

 

Segment Core Results

 

 

179

 

 

 

 

 

137

 

 

 

 

Midstream, marketing and other

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Earnings

 

 

123

 

 

 

 

 

119

 

 

 

 

No significant items affecting Earnings

 

 

 

 

 

 

 

 

 

 

 

Segment Core Results

 

 

123

 

 

 

 

 

119

 

 

 

 

Total Segment Core Results

 

 

3,190

 

 

 

 

 

1,618

 

 

 

 

Corporate

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate Results — Non Segment*

 

 

(1,344

)

 

 

 

 

(927

)

 

 

 

Less:

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt purchase expense

 

 

 

 

 

 

 

(172

)

 

 

 

Facility closure

 

 

 

 

 

 

 

(47

)

 

 

 

Tax effect of pre-tax adjustments

 

 

 

 

 

 

 

79

 

 

 

 

Discontinued operations, net**

 

 

27

 

 

 

 

 

43

 

 

 

 

Corporate Core Results — Non Segment

 

 

(1,371

)

 

 

 

 

(830

)

 

 

 

TOTAL CORE RESULTS

 

$

1,819

 

$

2.20

 

$

788

 

$

0.93

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

*

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

**

Amounts shown after tax.

 

 

8

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EXHIBIT 99.2

 

 

 

Occidental Petroleum Corporation

 

STEPHEN CHAZEN

President and Chief Financial Officer

 

– Conference Call –

First Quarter 2008 Earnings Announcement

 

April 24, 2008

Los Angeles, California

 

 

Thank you Chris.

Net income for the quarter was a record $1.846 billion, or $2.23 per diluted share, compared to $1.212 billion, or $1.43 per diluted share in the first quarter of 2007. Core results in the first quarter of 2008 were $1.819 billion, or $2.20 per diluted share, compared to $788 million, or $0.93 per diluted share for the same period of 2007.

Here’s the segment breakdown for the first quarter.

Oil and gas first quarter 2008 segment earnings were $2.888 billion, compared to $1.883 billion for the first quarter of 2007. Oil and gas core results for the first quarter of 2007 were $1.362 billion, after excluding a $412 million gain from the sale of our Russian joint venture and a $109 million gain from the resolution of certain legal disputes. The following accounted for the increase in oil and gas earnings between these quarters:

 

Higher worldwide oil and gas price realizations resulted in an increase of $1.6 billion of earnings over the comparable period in 2007. Occidental’s average realized crude oil price in the 2008 first quarter was $86.75 per barrel, an increase of $35.08 over the comparable period in 2007. Oxy’s domestic average realized gas

 

 

 

price for the quarter was $8.15 per mcf, compared with $6.38 per mcf for the first quarter 2007.

 

Worldwide oil and gas production for the first quarter of 2008 averaged 607,000 barrels of oil equivalent per day, an increase of 8.4 percent, compared with 560,000 BOE production in the first quarter of last year. The bulk of the production improvement was the result of 55,000 BOE per day from the Dolphin project which began production in the third quarter of 2007, partially offset by lower volumes from our production sharing contracts due to higher prices.

 

Our guidance for the first quarter production was in the range of 600,000 to 615,000 BOE per day, based on $90 WTI and our results were in the middle of the range.

 

Dolphin contributed $102 million to after-tax income during the first quarter which was ahead of our guidance. The sales volumes were 55,000 BOE per day slightly ahead of our guidance of 53,000 BOE per day. Dolphin reached full operations in February and is currently producing approximately 2 billion cubic feet of natural gas per day and 200,000 barrels of liquids per day.

 

Exploration expense was $74 million in the quarter, which was in line with our guidance of $70 to $90 million.

The first quarter 2008 production costs per barrel are approximately 39 cents less than the fourth quarter of 2007. Oil and gas production costs for the first three months of 2008 were $12.94 a barrel compared to last year’s costs of $12.36 a barrel. These numbers were adjusted to remove the midstream costs. The increases reflected higher production and ad valorem taxes and higher field operating costs.

 

 

2

 

Chemical segment earnings for the first quarter of 2008 were $179 million, which was higher than our guidance of $100 to $125 million. Chemicals earned $137 million in last year’s first quarter. The improvement in earnings was due to higher prices and margins in caustic soda along with higher PVC and VCM volumes exported to non-U.S. dollar denominated economies.

We have reclassified our midstream assets out of the oil and gas segment. Our midstream assets are comprised of the following businesses:

 

Marketing – Oxy’s marketing group (OEMI) markets our equity production and manages third party transactions. The primary driver of these earnings are marketing and trading margins in oil and gas, transportation and storage programs.

 

Gas processing plants – Our domestic wet gas production and third party production is processed through 13 Permian and 2 other gas plants to extract NGLs and deliver dry gas to the pipelines. The primary drivers for margins and cash flows are the difference between inlet costs of natural gas and market prices for NGLs and inlet volumes processed.

 

Pipelines – In the Permian basin, we own an oil-gathering, common carrier pipeline company with approximately 2,750 miles of pipeline and storage system with 5 million barrels of active storage. The main margin and cash flow drivers are volumes shipped. We also own a 24.5 percent equity interest in the Dolphin Pipeline project which carries gas to market in the UAE.

 

Power generation – Oxy owns two cogeneration plants, one in Texas and one in Louisiana, and an equity investment in a gas –

 

 

3

 

 

 

fired power plant at our Elk Hills site. The three plants have a combined electricity capacity to produce 1,768 megawatts per hour.

 

CO2 source fields and facilities – In the Permian Basin, we process and transport CO2 for use in the company’s enhanced oil recovery program, and the earnings represent the small volume sold to third parties.

The net book value of midstream properties was approximately $1.8 billion at December 31, 2007. As we disclosed earlier, we earned $123 million during the first quarter of 2008 from these assets. Midstream capital spending and property acquisition costs were approximately $430 million in 2007 and are expected to be about the same in 2008. These funds will be spent enhancing our CO2 production and expanding our pipeline capacity.

The worldwide effective tax rate was 42 percent for the first quarter of 2008, as compared to our guidance of 43 percent.

Capital spending was $868 million for the quarter. We currently expect total capital spending for 2008 to be about $4 billion. The increase from the prior estimate is a result of capital for the Rockies, California and Midstream assets.

Cash flow from operations for the three months was approximately $2.7 billion. We used $870 million of the company’s cash flow to fund capital expenditures, $1.6 billion for acquisitions and $210 million to pay dividends. We spent $435 million to repurchase 6.3 million common shares at an average price of $69.68 per share. These and other net cash outflows decreased our $2.0 billion cash balance at the end of last year by $500 million to $1.5 billion at March 31. The first quarter U.S. income tax payments reflect true-ups of 2007 amounts due. The second quarter

 

 

4

 

payments will increase since two quarterly estimated tax payments will be due. Debt was $1.8 billion at the end of March, which was unchanged from December 31, 2007.

The weighted average basic shares outstanding for the three months were 823.6 million and the weighted average diluted shares outstanding were 828.2 million. At March 31, there were 821.5 million basic shares outstanding and the diluted share amount was approximately 826.1 million.

Oxy’s 2008 annualized return on equity was 32 percent, with annualized return on capital employed of 29 percent.

As we look ahead in the current quarter:

 

We expect oil and gas production to be in the range of 610,000 to 620,000 BOE per day during the second quarter, at $100 oil prices. We expect second quarter production increases in Argentina, Colombia, Rocky Mountains, Permian and Oman, partially offset by decreases due to high cost recovery levels in the first quarter.

With regard to prices - -

 

A $1.00 per barrel change in oil prices impacts oil and gas quarterly earnings before income taxes by about $39 million. This $39 million sensitivity includes the impact of Dolphin. Also included is the production sharing contract price impact of approximately 500 barrels per day.

 

A swing of 50-cents per million BTUs in domestic gas prices has a $25 million impact on quarterly earnings before income taxes.

Additionally –

 

We expect exploration expense to be about $80 to $100 million for seismic and drilling for our exploration programs.

 

 

5

 

 

It is difficult to predict chemical results in the current environment. However, we reasonably expect chemical segment earnings to be in the range of $120 to $140 million, compared to $179 million in the first quarter. Higher feedstock costs are the primary driver of the reduced forecast. This outlook is also less than the second quarter 2007 earnings of $158 million, due to weakness in domestic construction which impacts industry demand.

 

We expect our combined worldwide tax rate in the second quarter, to remain about 42 percent. Our first quarter U. S. and foreign tax rates are included in the “Investor Relations Supplemental Schedule”.

 

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; operational interruptions; 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

 

 

6

 

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.

 

 

7

 

Occidental Petroleum Corporation

 

 

 

 

 

 

 

 

Return on Capital Employed (% )

 

 

 

 

 

 

 

 

($ Millions)

 

 

 

Three

 

 

 

 

 

 

 

Months

 

Annualized

Reconciliation to Generally Accepted Accounting Principles (GAAP)

 

2007

2008

 

2008

GAAP measure - earnings applicable to common shareholders

 

5,400

 

1,846

 

 

 

 

Interest expense

 

199

 

 

 

 

 

Tax effect of interest expense

 

(70

)

 

 

 

 

Earnings before tax-effected interest expense

 

5,529

 

1,846

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP stockholders' equity

 

22,823

 

23,944

 

 

 

 

 

 

 

 

 

 

 

 

 

DEBT

 

 

 

 

 

 

 

 

GAAP debt

 

 

 

 

 

 

 

 

Debt, including current maturities

 

1,788

 

1,775

 

 

 

 

Non-GAAP debt

 

 

 

 

 

 

 

 

Capital lease obligation

 

25

 

25

 

 

 

 

Subsidiary preferred stock

 

 

 

 

 

 

Total debt

 

1,813

 

1,800

 

 

 

 

 

 

 

 

 

 

 

 

 

Total capital employed

 

24,636

 

25,744

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on Capital Employed (%)

 

23.6

 

7.3

 

 

29.3

 

EX-99 5 ex993-20080424.htm EXHIBIT 99.3 Exhibit 99.3

EXHIBIT 99.3

Investor Relations Supplemental Schedules

 

Investor Relations Supplemental Schedules

Summary

($ Millions)

 

 

 

 

1Q 2008

1Q 2007

 

 

 

Reported Net Income

$1,846

$1,212

EPS - Diluted

$2.23

$1.43

 

 

 

Core Results

$1,819

$788

EPS - Diluted

$2.20

$0.93

 

 

 

Total Worldwide Production (mboe/day)

607

560

 

 

 

Total Worldwide Crude Oil Realizations ($/BBL)

$86.75

$51.67

Domestic Natural Gas Realizations ($/MCF)

$8.15

$6.38

 

 

 

Wtd. Average Basic Shares O/S (mm)

823.6

841.0

Wtd. Average Diluted Shares O/S (mm)

828.2

846.5

 

 

 

Shares Outstanding (mm)

820.7

833.8

 

 

 

Cash Flow from Operations

$2,700

$1,600

 

 

1

Investor Relations Supplemental Schedules

 

OCCIDENTAL PETROLEUM

2008 First Quarter

Net Income (Loss)

($ millions)

 

 

 

Reported

Income

 

Significant Items Affecting Income

 

Core

Results

Oil & Gas

$

2,888

 

 

 

 

 

 

 

 

$

2,888

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Chemical

 

179

 

 

 

 

 

 

 

 

 

179

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Midstream, marketing and other

 

123

 

 

 

 

 

 

 

 

 

123

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other

 

(77

)

 

 

 

 

 

 

 

 

(77

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxes

 

(1,294

)

 

 

 

 

 

 

 

 

(1,294

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

1,819

 

 

 

 

 

 

 

 

1,819

 

Discontinued operations, net of tax

 

27

 

 

 

(27

)

 

Discontinued operations, net

 

 

Net Income

$

1,846

 

 

$

(27

)

 

 

 

$

1,819

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic Earnings Per Common Share

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

$

2.21

 

 

 

 

 

 

 

 

 

 

 

Discontinued operations, net

 

0.03

 

 

 

 

 

 

 

 

 

 

 

Net Income

$

2.24

 

 

 

 

 

 

 

 

$

2.21

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted Earnings Per Common Share

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

$

2.20

 

 

 

 

 

 

 

 

 

 

 

Discontinued operations, net

 

0.03

 

 

 

 

 

 

 

 

 

 

 

Net Income

$

2.23

 

 

 

 

 

 

 

 

$

2.20

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2

Investor Relations Supplemental Schedules

 

OCCIDENTAL PETROLEUM

2007 First Quarter

Net Income (Loss)

($ millions)

 

 

 

Reported

Income

 

Significant Items Affecting Income

 

Core

Results

Oil & Gas

$

1,883

 

 

$

(412

)

 

Sale of Russian operations

 

$

1,362

 

 

 

 

 

 

$

(109

)

 

Legal settlements

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Chemical

 

137

 

 

 

 

 

 

 

 

 

137

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Midstream, marketing and other

 

119

 

 

 

 

 

 

 

 

 

119

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

(181

)

 

 

172

 

 

Debt purchases

 

 

(9

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other

 

(105

)

 

 

47

 

 

Facility closure

 

 

(58

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxes

 

(684

)

 

 

(79

)

 

Tax effect of adjustments

 

 

(763

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

1,169

 

 

 

(381

)

 

 

 

 

788

 

Discontinued operations, net of tax

 

43

 

 

 

(43

)

 

Discontinued operations, net

 

 

Net Income

$

1,212

 

 

$

(424

)

 

 

 

$

788

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic Earnings Per Common Share

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

$

1.39

 

 

 

 

 

 

 

 

 

 

 

Discontinued operations, net of tax

 

0.05

 

 

 

 

 

 

 

 

 

 

 

Net Income

$

1.44

 

 

 

 

 

 

 

 

$

0.94

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted Earnings Per Common Share

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

$

1.38

 

 

 

 

 

 

 

 

 

 

 

Discontinued operations, net of tax

 

0.05

 

 

 

 

 

 

 

 

 

 

 

Net Income

$

1.43

 

 

 

 

 

 

 

 

$

0.93

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3

Investor Relations Supplemental Schedules

 

OCCIDENTAL PETROLEUM

Items Affecting Comparability of Core Results Between Periods

 

The item(s) below are included in core results and are shown in this table because they affect the comparability between periods.

 

 

Pre-tax

 

 

 

 

 

 

 

Income / (Expense)

First Quarter

 

 

 

 

 

2008

 

2007

 

 

 

 

Corporate

 

 

 

 

 

 

 

Environmental remediation

(4)

 

(8)

 

 

 

 

 

 

4

Investor Relations Supplemental Schedules

 

 

 

 

OCCIDENTAL PETROLEUM

Worldwide Effective Tax Rate

 

 

QUARTERLY

 

 

 

 

 

 

 

2008

 

2007

 

2007

 

 

 

 

 

 

REPORTED INCOME

QTR 1

 

QTR 4

 

QTR 1

 

 

 

 

 

Oil & Gas (a)

2,888

 

 

2,463

 

 

1,883

 

 

 

 

 

 

 

Chemicals

179

 

 

94

 

 

137

 

 

 

 

 

 

 

Midstream, marketing and other

123

 

 

136

 

 

119

 

 

 

 

 

 

 

Corporate & other

(77

)

 

(188

)

 

(286

)

 

 

 

 

 

 

Pre-tax income

3,113

 

 

2,505

 

 

1,853

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal and state

606

 

 

473

 

 

266

 

 

 

 

 

 

 

Foreign (a)

688

 

 

584

 

 

418

 

 

 

 

 

 

 

Total

1,294

 

 

1,057

 

 

684

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

1,819

 

 

1,448

 

 

1,169

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Worldwide effective tax rate

42%

 

42%

 

37%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2008

 

2007

 

2007

 

 

 

 

 

 

CORE RESULTS

QTR 1

 

QTR 4

 

QTR 1

 

 

 

 

 

Oil & Gas (a)

2,888

 

 

2,463

 

 

1,362

 

 

 

 

 

 

 

Chemicals

179

 

 

94

 

 

137

 

 

 

 

 

 

 

Midstream, marketing and other

123

 

 

136

 

 

119

 

 

 

 

 

 

 

Corporate & other

(77

)

 

(163

)

 

(67

)

 

 

 

 

 

 

Pre-tax income

3,113

 

 

2,530

 

 

1,551

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal and state

606

 

 

482

 

 

345

 

 

 

 

 

 

 

Foreign (a)

688

 

 

584

 

 

418

 

 

 

 

 

 

 

Total

1,294

 

 

1,066

 

 

763

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Core results

1,819

 

 

1,464

 

 

788

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Worldwide effective tax rate

42%

 

42%

 

49%

 

 

 

 

 

 

 

 

 

(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.

 

2008

 

2007

 

2007

 

 

 

 

 

 

 

QTR 1

 

QTR 4

 

QTR 1

 

 

 

 

 

 

 

488

 

 

406

 

 

288

 

 

 

 

 

 

 

 

 

5

Investor Relations Supplemental Schedules

 

OCCIDENTAL PETROLEUM

2008 First Quarter Net Income (Loss)

Reported Income Comparison

 

First

 

Fourth

 

 

 

 

 

Quarter

 

Quarter

 

 

 

 

 

2008

 

2007

 

B / (W)

Oil & Gas

$

2,888

 

 

$

2,463

 

 

$

425

 

Chemical

 

179

 

 

 

94

 

 

 

85

 

Midstream, marketing and other

 

123

 

 

 

136

 

 

 

(13

)

Corporate

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

 

 

 

(13

)

 

 

13

 

Other

 

(77

)

 

 

(175

)

 

 

98

 

Taxes

 

(1,294

)

 

 

(1,057

)

 

 

(237

)

Income from continuing operations

 

1,819

 

 

 

1,448

 

 

 

371

 

Discontinued operations, net

 

27

 

 

 

4

 

 

 

23

 

Net Income

$

1,846

 

 

$

1,452

 

 

$

394

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings Per Common Share

 

 

 

 

 

 

 

 

 

 

 

Basic

$

2.24

 

 

$

1.75

 

 

$

0.49

 

Diluted

$

2.23

 

 

$

1.74

 

 

$

0.49

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Worldwide Effective Tax Rate

 

42%

 

 

42%

 

 

0%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OCCIDENTAL PETROLEUM

2008 First Quarter Net Income (Loss)

Core Results Comparison

 

 

First

 

Fourth

 

 

 

 

 

Quarter

 

Quarter

 

 

 

 

 

2008

 

2007

 

B / (W)

Oil & Gas

$

2,888

 

 

$

2,463

 

 

$

425

 

Chemical

 

179

 

 

 

94

 

 

 

85

 

Midstream, marketing and other

 

123

 

 

 

136

 

 

 

(13

)

Corporate

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

 

 

 

(13

)

 

 

13

 

Other

 

(77

)

 

 

(150

)

 

 

73

 

Taxes

 

(1,294

)

 

 

(1,066

)

 

 

(228

)

Core Results

$

1,819

 

 

$

1,464

 

 

$

355

 

 

 

 

 

 

 

 

 

 

 

 

 

Core Results Per Common Share

 

 

 

 

 

 

 

 

 

 

 

Basic

$

2.21

 

 

$

1.77

 

 

$

0.44

 

Diluted

$

2.20

 

 

$

1.76

 

 

$

0.44

 

 

 

 

 

 

 

 

 

 

 

 

 

Worldwide Effective Tax Rate

 

42%

 

 

42%

 

 

0%

 

 

 

 

 

 

 

 

 

 

 

 

 

6

Investor Relations Supplemental Schedules

 

OCCIDENTAL PETROLEUM

Oil & Gas

Variance Analysis 1Q08 vs. 4Q07

($ millions)

 

 

 

 

OCCIDENTAL PETROLEUM

Chemical

Variance Analysis 1Q08 vs. 4Q07

($ millions)

 

*Primarily higher energy costs

 

 

7

Investor Relations Supplemental Schedules

 

OCCIDENTAL PETROLEUM

2008 First Quarter Net Income (Loss)

Reported Income Comparison

 

First

 

First

 

 

 

 

 

Quarter

 

Quarter

 

 

 

 

 

2008

 

2007

 

B / (W)

Oil & Gas

$

2,888

 

 

$

1,883

 

 

$

1,005

 

Chemical

 

179

 

 

 

137

 

 

 

42

 

Midstream, marketing and other

 

123

 

 

 

119

 

 

 

4

 

Corporate

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

 

 

 

(181

)

 

 

181

 

Other

 

(77

)

 

 

(105

)

 

 

28

 

Taxes

 

(1,294

)

 

 

(684

)

 

 

(610

)

Income from continuing operations

 

1,819

 

 

 

1,169

 

 

 

650

 

Discontinued operations, net

 

27

 

 

 

43

 

 

 

(16

)

Net Income

$

1,846

 

 

$

1,212

 

 

$

634

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings Per Common Share

 

 

 

 

 

 

 

 

 

 

 

Basic

$

2.24

 

 

$

1.44

 

 

$

0.80

 

Diluted

$

2.23

 

 

$

1.43

 

 

$

0.80

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Worldwide Effective Tax Rate

 

42%

 

 

37%

 

 

-5%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OCCIDENTAL PETROLEUM

2008 First Quarter Net Income (Loss)

Core Results Comparison

 

 

First

 

First

 

 

 

 

 

Quarter

 

Quarter

 

 

 

 

 

2008

 

2007

 

B / (W)

Oil & Gas

$

2,888

 

 

$

1,362

 

 

$

1,526

 

Chemical

 

179

 

 

 

137

 

 

 

42

 

Midstream, marketing and other

 

123

 

 

 

119

 

 

 

4

 

Corporate

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

 

 

 

(9

)

 

 

9

 

Other

 

(77

)

 

 

(58

)

 

 

(19

)

Taxes

 

(1,294

)

 

 

(763

)

 

 

(531

)

Core Results

$

1,819

 

 

$

788

 

 

$

1,031

 

 

 

 

 

 

 

 

 

 

 

 

 

Core Results Per Common Share

 

 

 

 

 

 

 

 

 

 

 

Basic

$

2.21

 

 

$

0.94

 

 

$

1.27

 

Diluted

$

2.20

 

 

$

0.93

 

 

$

1.27

 

 

 

 

 

 

 

 

 

 

 

 

 

Worldwide Effective Tax Rate

 

42%

 

 

49%

 

 

7%

 

 

 

 

 

 

 

 

 

 

 

 

 

8

Investor Relations Supplemental Schedules

 

OCCIDENTAL PETROLEUM

Oil & Gas

Variance Analysis 1Q08 vs. 1Q07

($ millions)

 

 

* DD&A rate increase (31) and higher operating expenses

 

OCCIDENTAL PETROLEUM

Chemical

Variance Analysis 1Q08 vs. 1Q07

($ millions)

 

 

* Higher energy and feedstock costs

 

 

9

Investor Relations Supplemental Schedules

 

OCCIDENTAL PETROLEUM

SUMMARY OF OPERATING STATISTICS

 

 

 

First Quarter

 

 

2008

 

2007

NET PRODUCTION PER DAY:

 

 

 

 

 

 

United States

 

 

 

 

 

 

Crude Oil and Liquids (MBL)

 

 

 

 

 

 

California

 

87

 

 

85

 

Permian

 

170

 

 

165

 

Hugoton and other

 

4

 

 

4

 

Total

 

261

 

 

254

 

Natural Gas (MMCF)

 

 

 

 

 

 

California

 

245

 

 

232

 

Hugoton and other

 

158

 

 

150

 

Permian

 

177

 

 

198

 

Total

 

580

 

 

580

 

Latin America

 

 

 

 

 

 

Crude Oil (MBL)

 

 

 

 

 

 

Argentina

 

37

 

 

33

 

Colombia

 

42

 

 

42

 

Total

 

79

 

 

75

 

Natural Gas (MMCF)

 

 

 

 

 

 

Argentina

 

22

 

 

21

 

Bolivia

 

21

 

 

14

 

Total

 

43

 

 

35

 

Middle East / North Africa

 

 

 

 

 

 

Crude Oil (MBL)

 

 

 

 

 

 

Oman

 

20

 

 

22

 

Dolphin

 

22

 

 

 

Qatar

 

46

 

 

46

 

Yemen

 

25

 

 

32

 

Libya

 

17

 

 

26

 

Total

 

130

 

 

126

 

Natural Gas (MMCF)

 

 

 

 

 

 

Oman

 

23

 

 

26

 

Dolphin

 

200

 

 

 

Total

 

223

 

 

26

 

Barrels of Oil Equivalent (MBOE)

 

 

 

 

 

 

 

 

 

 

 

 

 

Subtotal consolidated subsidiaries

 

611

 

 

562

 

Other interests

 

 

 

 

 

 

Colombia - minority interest

 

(6

)

 

(5

)

Yemen - Occidental net interest

 

2

 

 

3

 

Total worldwide production - MBOE

 

607

 

 

560

 

 

 

 

 

 

 

 

 

10

Investor Relations Supplemental Schedules

 

OCCIDENTAL PETROLEUM

SUMMARY OF OPERATING STATISTICS

 

 

 

First Quarter

 

 

2008

 

2007

OIL & GAS:

 

 

 

 

 

 

PRICES

 

 

 

 

 

 

United States

 

 

 

 

 

 

Crude Oil ($/BBL)

 

 

90.21

 

 

51.94

Natural gas ($/MCF)

 

 

8.15

 

 

6.38

 

 

 

 

 

 

 

Latin America

 

 

 

 

 

 

Crude Oil ($/BBL)

 

 

67.26

 

 

45.71

Natural Gas ($/MCF)

 

 

3.80

 

 

1.94

 

 

 

 

 

 

 

Middle East / North Africa

 

 

 

 

 

 

Crude Oil ($/BBL)

 

 

93.37

 

 

55.31

 

 

 

 

 

 

 

Total Worldwide

 

 

 

 

 

 

Crude Oil ($/BBL)

 

 

86.75

 

 

51.67

Natural Gas ($/MCF)

 

 

6.05

 

 

5.92

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

First Quarter

 

 

2008

 

2007

Exploration Expense

 

 

 

 

 

 

Domestic

 

$

7

 

$

18

Latin America

 

 

15

 

 

23

Middle East / North Africa

 

 

40

 

 

53

Other Eastern Hemisphere

 

 

12

 

 

8

TOTAL REPORTED

 

$

74

 

$

102

 

 

 

 

 

 

 

 

11

Investor Relations Supplemental Schedules

 

OCCIDENTAL PETROLEUM

SUMMARY OF OPERATING STATISTICS

 

 

First Quarter

Capital Expenditures ($MM)

 

2008

 

2007

Oil & Gas

 

 

 

 

 

 

California

 

$

164

 

$

128

Permian

 

 

100

 

 

133

Other - U.S.

 

 

48

 

 

42

Latin America

 

 

180

 

 

114

Middle East / North Africa

 

 

266

 

 

294

Other Eastern Hemisphere

 

 

 

 

1

Chemicals

 

 

50

 

 

27

Midstream, marketing and other

 

 

56

 

 

38

Corporate

 

 

4

 

 

3

TOTAL

 

$

868

 

$

780

 

 

 

 

 

 

 

Depreciation, Depletion &

 

First Quarter

Amortization of Assets ($MM)

 

2008

 

2007

Oil & Gas

 

 

 

 

 

 

Domestic

 

$

255

 

$

239

Latin America

 

 

105

 

 

90

Middle East / North Africa

 

 

190

 

 

152

Chemicals

 

 

82

 

 

73

Midstream, marketing and other

 

 

17

 

 

16

Corporate

 

 

4

 

 

4

TOTAL

 

$

653

 

$

574

 

 

 

 

 

 

 

 

12

Investor Relations Supplemental Schedules

 

 

OCCIDENTAL PETROLEUM

CORPORATE

($ millions)

 

 

 

 

31-Mar-08

 

31-Dec-07

 

 

 

 

 

 

 

 

 

 

 

CAPITALIZATION

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-Term Debt (including current maturities)

 

 

$

1,775

 

 

 

$

1,776

 

 

 

 

 

 

 

 

 

 

 

 

Notes Payable

 

 

 

30

 

 

 

 

12

 

 

 

 

 

 

 

 

 

 

 

 

Others

 

 

 

25

 

 

 

 

25

 

 

 

 

 

 

 

 

 

 

 

 

Total Debt

 

 

$

1,830

 

 

 

$

1,813

 

 

 

 

 

 

 

 

 

 

 

 

EQUITY

 

 

$

23,944

 

 

 

$

22,823

 

 

 

 

 

 

 

 

 

 

 

 

Total Debt To Total Capitalization

 

 

 

7%

 

 

 

 

7%

 

 

 

 

 

 

 

 

 

 

 

 

 

13

Investor Relations Supplemental Schedules

 

 

 

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; operational interruptions 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 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 ex994-20080424.htm EXHIBIT 99.4 Exhibit 99.4

EXHIBIT 99.4

 

First Quarter 2008

Earnings Conference Call

April 24, 2008

 

 

1

 

First Quarter 2008 Earnings – Highlights

Net Income - $1.846 B vs. $1.212 B in 1Q-07

Reported EPS $2.23 (diluted) vs. $1.43 in 1Q-07

+56% year-over-year

Core Results - $1.819 B vs. $788 mm in 1Q-07

Core EPS $2.20 (diluted) vs. $0.93 in 1Q-07

+137% year-over-year

Record first quarter net income driven by:

8.4% year-over-year increase in oil and gas production;

Improved oil and gas prices.

 

 

2

 

First Quarter 2008 Earnings – Summary

($ in millions, except EPS data)

1Q2008

1Q2007

Net Income

$1,846

$1,212

Reported EPS (diluted)

$2.23

$1.43

Core Results

$1,819

$788

Core EPS (diluted)

$2.20

$0.93

+137% year-over-year

Oil and Gas production (mboe/day)

607

560

+8.4% year-over-year

Capital Spending

$868

$780

Cash Flow from Operations

$2,700

$1,600

ROE

32%

26%

ROCE*

29%

24%

* Annualized (see attached Excel file for GAAP reconciliation)

 

 

3

 

First Quarter 2008 Earnings - Oil & Gas
Segment Variance Analysis - 1Q08 vs. 1Q07

Core Results for 1Q08 of $2.888 Billion

+ 112% year-over-year

($ in millions)

1Q 07

Sales Price

Sales

Volume/Mix

Exploration

Expense

*All Others

1Q 08

$1,362

$2,888

$1,574

$100

$28

$176

*All Others include: DD&A increase ($31 mm), and higher operating expenses

 

 

4

 

First Quarter 2008 Earnings –
Oil & Gas Segment

1Q08

1Q07

Reported Segment Earnings ($ mm)

$2,888

$1,883

WTI Oil Price ($/bbl)

$97.90

$58.16

NYMEX Gas Price ($/mcf)

$7.94

$7.17

Oxy’s Realized Prices

Worldwide Oil ($/bbl)

$86.75

$51.67

US Natural Gas ($/mcf)

$8.15

$6.38

 

 

5

 

First Quarter 2008 Earnings –
Oil & Gas Segment

1Q08

1Q07

Oil and Gas Production (mboe/day)

607

560

+ 8.4% year-over-year

Improvement was largely due to the Dolphin Project, partially offset by lower
PSC volumes due to higher prices.

Actual production was in the middle of our earlier guidance of 600 to 615
mboe/day, and based on $90 WTI.

Dolphin contribution:

$102 mm of after-tax income;

Sales volumes of 55 mboe/day vs. guidance of 53 mboe/day.

Reached full operations in February and is currently producing approximately
2 bcf/d of natural gas and 200,000 b/d of condensate and NGLs.

Exploration expense of $74 mm was in line with guidance of $70 - $90 mm.

Oil and Gas production costs were $12.94 per boe in 1Q08 vs. $12.36 per
boe for full-year 2007, and approximately $0.39 per boe less than 4Q07.

Numbers adjusted to remove the midstream costs.

Increase due to higher production and ad valorem taxes and field operating costs.

 

 

6

 

First Quarter 2008 Earnings – Chemical
Segment Variance Analysis - 1Q08 vs. 1Q07

Core Results for 1Q08 of $179 Million

+31% year-over-year, and higher than guidance of $100 to $125 mm;

Improvement due to higher prices and margins in caustic soda, and higher
PVC and VCM volumes exported to non-US$ denominated economies.

($ in millions)

1Q 07

Sales Price

Sales

Volume/Mix

*Operations/

Manufacturing

All Others

1Q 08

$137

$179

$210

$6

$172

$2

*Higher energy and feedstock costs

 

 

7

 

First Quarter 2008 Earnings –
Midstream, Marketing and Other

Midstream assets reclassified out of the Oil and Gas segment

The assets are comprised of the following businesses:

Marketing – Oxy’s marketing group markets our equity production and manages third party transactions.  The primary drivers of these earnings are marketing and trading margins in oil and gas, transportation and storage programs.

Gas processing plants – Oxy’s domestic wet gas production and third party production is processed through 13 Permian and 2 other gas plants to extract NGLs and deliver dry gas to the pipelines.  The primary driver for margins and cash flows is the difference between inlet costs of natural gas and market prices for NGLs and inlet volumes processed.

Pipelines – In the Permian basin, Oxy owns an oil-gathering, common carrier pipeline company with approximately 2,750 miles of pipeline, and a storage system with 5 mm barrels of active storage.  The main margin and cash flow drivers are volumes shipped.  Oxy also owns a 24.5% equity interest in the Dolphin Pipeline, which carries gas to markets in the UAE.

Power generation – Oxy owns 2 cogen plants, one in TX and one in LA, and an equity investment in a gas-fired power plant at Elk Hills.  The three plants have combined electricity capacity to produce 1,768 megawatts per hour.

CO2 source fields and facilities – CO2 is processed and transported from the Permian Basin for use in Oxy’s EOR program, and the earnings represent the small volume sold to 3rd parties.

 

 

8

 

First Quarter 2008 Earnings –
Midstream, Marketing and Other

($ in millions)

Midstream Data ($ mm)

1Q08

1Q07

Core Results

$123

$119

2007

Net Book Value (at year end)

$1,800

Capex & Acquisition costs

$430

Similar amount expected in 2008

Funds will be spent enhancing our CO2 production and expanding our
pipeline capacity.

 

 

9

 

First Quarter 2008 Earnings – Cash Flow

$4,700

$870

$435

$210

$1,500

Available

Cash

Acquisitions

Capex

Share

Repurchase

Dividends

Ending Cash

Balance

3/31/08

Cash

Flow From

Operations

$2,700

($ in millions)

Beginning

Cash

$2,000

$1,600

$85

Other

 

 

10

 

First Quarter 2008 Earnings - Share Repurchase

Spent $435 million to repurchase 6.3 million shares in
1Q08 at an average price of $69.68 per share.

20.2 million shares remained under the current 75 million
share repurchase authorization.

Shares Outstanding (mm)

1Q08

3/31/08

Weighted Average Basic

823.6

Weighted Average Diluted

828.2

Basic Shares Outstanding

821.5

Diluted Shares Outstanding

826.1

 

 

11

 

First Quarter 2008 Earnings - 2Q08 Outlook

We expect 2Q08 oil and gas production in the range of 610
to 620 mboe/day, at $100 oil prices.

Production increases expected in Argentina, Colombia, Rocky Mountains,
Permian and Oman;

Partially offset by decreases due to high cost recovery levels in 1Q08.

We currently expect total capital spending for 2008 to be
about $4 billion.

The increase from the prior estimate is a result of capital for the Rockies,
California and Midstream Assets.

 

 

12

 

First Quarter 2008 Earnings - 2Q08 Outlook

Commodity Price Sensitivity — Earnings

A $1.00 per barrel change in oil prices impacts oil and gas
quarterly earnings before income taxes by about $39 mm;

Includes the impact of Dolphin;

Includes production sharing contract price impact of approximately
500 barrels per day.

A change of $0.50 per million BTUs in domestic gas prices has
a $25 mm impact on quarterly earnings before income taxes.

We expect 2Q08 exploration expense to be about $80 to
$100 mm for our seismic and drilling programs.

 

 

13

 

First Quarter 2008 Earnings - 2Q08 Outlook

We expect 2Q08 Chemical earnings to be in the range of
$120 to $140 mm, compared to $179 mm in 1Q08.

Higher feedstock costs are the primary driver of the reduced forecast.

Outlook is also below 2Q07 earnings of $158 mm due to weakness in
domestic construction which impacts industry demand.

Cash tax payments in 2Q08 will increase since two
quarterly estimated tax payments will be due.  US income
tax payments in 1Q08 reflect true-ups of 2007 amounts due.

We expect our combined worldwide tax rate in 2Q08 to
remain at about 42%.

 

 

14

 

First Quarter 2008 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; operational interruption;
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 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.

 

 

15

 

Occidental Petroleum Corporation

 

 

 

 

 

 

 

 

Return on Capital Employed (% )

 

 

 

 

 

 

 

 

($ Millions)

 

 

 

Three

 

 

 

 

 

 

 

Months

 

Annualized

Reconciliation to Generally Accepted Accounting Principles (GAAP)

 

2007

2008

 

2008

GAAP measure - earnings applicable to common shareholders

 

5,400

 

1,846

 

 

 

 

Interest expense

 

199

 

 

 

 

 

Tax effect of interest expense

 

(70

)

 

 

 

 

Earnings before tax-effected interest expense

 

5,529

 

1,846

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP stockholders' equity

 

22,823

 

23,944

 

 

 

 

 

 

 

 

 

 

 

 

 

DEBT

 

 

 

 

 

 

 

 

GAAP debt

 

 

 

 

 

 

 

 

Debt, including current maturities

 

1,788

 

1,775

 

 

 

 

Non-GAAP debt

 

 

 

 

 

 

 

 

Capital lease obligation

 

25

 

25

 

 

 

 

Subsidiary preferred stock

 

 

 

 

 

 

Total debt

 

1,813

 

1,800

 

 

 

 

 

 

 

 

 

 

 

 

 

Total capital employed

 

24,636

 

25,744

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on Capital Employed (%)

 

23.6

 

7.3

 

 

29.3

 

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