EX-99 2 ex991-20090723b.htm EXHIBIT 99.1 Exhibit 99.1

EXHIBIT 99.1

For Immediate Release: July 23, 2009

Occidental Petroleum Announces Net Income for Second Quarter and First Six Months of 2009

LOS ANGELES, July 23, 2009 -- Occidental Petroleum Corporation (NYSE: OXY) announced net income of $682 million ($0.84 per diluted share) for the second quarter of 2009, compared with $2.3 billion ($2.78 per diluted share) for the second quarter of 2008.

In announcing the results, Dr. Ray R. Irani, Chairman and Chief Executive Officer, said, "Occidental achieved year-over-year production growth of 10 percent in the second quarter and nearly nine percent in the six months of 2009. Our discovery in Kern County, California which was announced yesterday should also contribute to our future growth."

QUARTERLY RESULTS

Oil and Gas

Oil and gas segment earnings were $1.1 billion for the second quarter of 2009, compared with $3.8 billion for the same period in 2008. The decrease in the second quarter 2009 segment earnings reflected lower crude oil and natural gas prices and higher DD&A rates, partially offset by higher oil and gas sales volumes and lower operating expenses.

For the second quarter of 2009, daily oil and gas sales volumes averaged 649,000 barrels of oil equivalent (BOE), compared with 588,000 BOE sold in the second quarter of 2008. Volumes increased by approximately 3 percent domestically, mainly from California and Midcontinent/Rockies, by about 37 percent in Latin America mostly in Argentina, and by 16 percent in the Middle East/North Africa largely in Oman and Dolphin. California volumes included increases in Long Beach resulting from economic arrangements similar to a production sharing contract and production from new exploration wells in Elk Hills.

Oxy's realized price for worldwide crude oil was $52.97 per barrel for the second quarter of 2009, compared with $110.12 per barrel for the second quarter of 2008. Domestic realized gas prices decreased from $9.99 per MCF in the second quarter of 2008 to $2.87 per MCF for the second quarter of 2009.

Chemicals

Chemical segment earnings for the second quarter 2009 were $115 million, compared with $144 million for the same period in 2008. The second quarter of 2009 results reflect the continued weakness in the U.S. housing, automotive and durable goods sectors resulting in lower volumes for chlorine, caustic soda and polyvinyl chloride. The lower volumes were partially offset by lower feedstock and energy costs.

Midstream, Marketing and Other

Midstream segment earnings were $63 million for the second quarter of 2009, compared with $161 million for the second quarter of 2008. The second quarter of 2009 earnings reflect lower margins in the gas processing, marketing, and power generation businesses.

SIX MONTH RESULTS

Net income for the six months of 2009 was $1.1 billion ($1.29 per diluted share), compared with $4.1 billion ($5.00 per diluted share) for the six months of 2008.

Core results were $1.1 billion ($1.34 per diluted share) for the six months of 2009, compared with $4.1 billion ($4.97 per diluted share) for the six months of 2008.

Oil and Gas

Oil and gas segment earnings were $1.6 billion for the six months of 2009, compared with $6.7 billion for the same period of 2008. The decrease in segment earnings reflected lower crude oil and natural gas prices and higher DD&A rates, partially offset by increased sales volumes and lower operating and administrative costs.

Daily oil and gas sales volumes for the first six months was 651,000 BOE for 2009, compared with 598,000 BOE per day for the same 2008 period. Volumes increased by approximately 4 percent

 

 

2

domestically mainly from California and Midcontinent/Rockies, by about 26 percent in Latin America mostly in Argentina, and by 11 percent in the Middle East/North Africa largely due to Oman and Dolphin. Higher volumes in domestic assets included production from new exploration wells in California.

Oxy's worldwide crude oil realized price was $46.05 per barrel for the six months of 2009, compared with $98.16 per barrel for the six months of 2008. Domestic realized gas prices decreased from $9.09 per MCF in the six months of 2008 to $3.20 per MCF in the six months of 2009.

Chemicals

Chemical segment earnings for the six months of 2009 were $284 million, compared with $323 million for the same period of 2008. The 2009 six month results reflect lower volumes for chlorine, caustic soda and polyvinyl chloride due to the economic slowdown, partially offset by lower feedstock and energy costs.

Midstream, Marketing and Other

Midstream segment earnings were $77 million for the six months of 2009, compared with $284 million for the same period in 2008. The earnings decline in 2009 reflects lower margins in the gas processing, power generation, and marketing businesses.

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 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," "should," "expect," or "estimate," or otherwise relate to the future, are forward-looking and involve risks and uncertainties that could significantly affect expected results.

 

 

3

Factors that could cause actual results to differ materially include, but are not limited to: global commodity price fluctuations and supply/demand considerations for oil, gas and chemicals; exploration risks, such as drilling of unsuccessful wells; not successfully completing (or any material delay in) any expansions, field development, capital projects, acquisitions, or dispositions; higher-than-expected costs; political risk; operational interruptions and changes in tax rates. 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 disclosures 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

 

 

4

 

SUMMARY OF SEGMENT NET SALES AND EARNINGS

 

(Millions, except

 

Second Quarter

 

Six Months

 

 per-share amounts)

 

 

2009

 

 

2008

 

 

2009

 

 

2008

 

SEGMENT NET SALES

 

 

 

 

 

 

 

 

 

 

 

 

 

Oil and Gas

 

$

2,726

 

$

5,501

 

$

4,863

 

$

10,019

 

Chemical

 

 

811

 

 

1,386

 

 

1,603

 

 

2,653

 

Midstream, Marketing and Other

 

 

250

 

 

418

 

 

478

 

 

823

 

Eliminations

 

 

(100

)

 

(189

)

 

(184

)

 

(359

)

Net sales

 

$

3,687

 

$

7,116

 

$

6,760

 

$

13,136

 

SEGMENT EARNINGS

 

 

 

 

 

 

 

 

 

 

 

 

 

Oil and Gas (a), (b)

 

$

1,083

 

$

3,806

 

$

1,628

 

$

6,694

 

Chemical

 

 

115

 

 

144

 

 

284

 

 

323

 

Midstream, Marketing and Other

 

 

63

 

 

161

 

 

77

 

 

284

 

 

 

 

1,261

 

 

4,111

 

 

1,989

 

 

7,301

 

Unallocated Corporate Items

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

 

(23

)

 

(7

)

 

(43

)

 

(7

)

Income taxes

 

 

(455

)

 

(1,671

)

 

(696

)

 

(2,965

)

Other (c)

 

 

(99

)

 

(133

)

 

(195

)

 

(210

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from Continuing Operations (a)

 

 

684

 

 

2,300

 

 

1,055

 

 

4,119

 

Discontinued operations, net

 

 

(2

)

 

(3

)

 

(5

)

 

24

 

NET INCOME (a)

 

$

682

 

$

2,297

 

$

1,050

 

$

4,143

 

BASIC EARNINGS PER COMMON SHARE

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

0.84

 

$

2.79

 

$

1.30

 

$

5.00

 

Discontinued operations, net

 

 

—

 

 

—

 

 

(0.01

)

 

0.03

 

 

 

$

0.84

 

$

2.79

 

$

1.29

 

$

5.03

 

DILUTED EARNINGS PER COMMON SHARE (d)

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

0.84

 

$

2.78

 

$

1.30

 

$

4.97

 

Discontinued operations, net

 

 

—

 

 

—

 

 

(0.01

)

 

0.03

 

 

 

$

0.84

 

$

2.78

 

$

1.29

 

$

5.00

 

AVERAGE BASIC COMMON SHARES OUTSTANDING (d)

 

 

 

 

 

 

 

 

 

 

 

 

 

BASIC

 

 

811.0

 

 

821.3

 

 

810.8

 

 

822.5

 

DILUTED

 

 

814.0

 

 

825.2

 

 

813.7

 

 

826.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See footnotes on following page.

 

 

5

 

(a)

Net Income - Net income and income from continuing operations represent amounts attributable to Common Stock, after deducting non-controlling interest of $12 million and $37 million for the second quarter and $21 million and $66 million for the six months ended June 30, 2009 and 2008, respectively. Oil and gas segment earnings are also presented net of these non-controlling interest amounts.

 

 

(b)

Oil and Gas - The six months of 2009 includes an $8 million pre-tax charge for rig contract termination costs.

 

 

(c)

Unallocated Corporate Items - Other - The second quarter of 2009 includes a pre-tax charge of $8 million related to severance. The first six months of 2009 includes additional pre-tax charges of $32 million for severance and $15 million for railcar leases.

 

 

(d)

Earnings Per Share - The 2008 earnings per share amounts reflect the adoption on January 1, 2009 of FSP NO. EITF 03-06-1 dealing with participating securities.

 

SUMMARY OF CAPITAL EXPENDITURES AND DD&A EXPENSE

 

 

 

Second Quarter

 

Six Months

 

($ millions)

 

 

2009

 

 

2008

 

 

2009

 

 

2008

 

CAPITAL EXPENDITURES

 

$

831

 

$

1,038

 

$

1,902

 

$

1,871

 

DEPRECIATION, DEPLETION AND

 

 

 

 

 

 

 

 

 

 

 

 

 

AMORTIZATION OF ASSETS

 

$

742

 

$

621

 

$

1,528

 

$

1,274

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ITEMS AFFECTING COMPARABILITY OF CORE EARNINGS BETWEEN PERIODS

 

Income/(Expense)

 

Second Quarter

 

Six Months

 

($ millions)

 

 

2009

 

 

2008

 

 

2009

 

 

2008

 

Foreign exchange gains and (losses)*

 

$

(6

)

$

(4

)

$

31

 

$

(5

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

*Amounts shown after tax.

 

 

6

 

SUMMARY OF OPERATING STATISTICS

 

 

Second Quarter

 

Six Months

 

 

 

2009

 

2008

 

2009

 

2008

 

NET OIL, GAS AND LIQUIDS

 

 

 

 

 

 

 

 

 

SALES PER DAY

 

 

 

 

 

 

 

 

 

United States

 

 

 

 

 

 

 

 

 

Crude Oil and Liquids (MBBL)

 

 

 

 

 

 

 

 

 

California

 

90

 

84

 

93

 

86

 

Permian

 

167

 

169

 

168

 

170

 

Midcontinent/Rockies

 

10

 

5

 

10

 

4

 

Total

 

267

 

258

 

271

 

260

 

Natural Gas (MMCF)

 

 

 

 

 

 

 

 

 

California

 

232

 

238

 

224

 

241

 

Permian

 

197

 

190

 

196

 

184

 

Midcontinent/Rockies

 

192

 

174

 

201

 

166

 

Total

 

621

 

602

 

621

 

591

 

Latin America

 

 

 

 

 

 

 

 

 

Crude Oil (MBBL)

 

 

 

 

 

 

 

 

 

Argentina

 

37

 

22

 

41

 

29

 

Colombia

 

48

 

43

 

47

 

43

 

Total

 

85

 

65

 

88

 

72

 

Natural Gas (MMCF)

 

 

 

 

 

 

 

 

 

Argentina

 

30

 

14

 

32

 

18

 

Bolivia

 

19

 

21

 

17

 

21

 

Total

 

49

 

35

 

49

 

39

 

Middle East/North Africa

 

 

 

 

 

 

 

 

 

Crude Oil and Liquids (MBBL)

 

 

 

 

 

 

 

 

 

Oman

 

38

 

21

 

36

 

20

 

Dolphin

 

25

 

19

 

23

 

20

 

Qatar

 

50

 

45

 

49

 

46

 

Yemen

 

23

 

20

 

27

 

23

 

Libya

 

8

 

27

 

7

 

23

 

Total

 

144

 

132

 

142

 

132

 

Natural Gas (MMCF)

 

 

 

 

 

 

 

 

 

Oman

 

23

 

25

 

23

 

23

 

Dolphin

 

242

 

163

 

224

 

182

 

Total

 

265

 

188

 

247

 

205

 

Barrels of Oil Equivalent (MBOE)

 

 

 

 

 

 

 

 

 

Subtotal consolidated subsidiaries

 

652

 

593

 

654

 

603

 

Colombia-minority interest

 

(6

)

(7

)

(6

)

(7

)

Yemen-Occidental net interest

 

3

 

2

 

3

 

2

 

Total Worldwide Sales Volumes - MBOE

 

649

 

588

 

651

 

598

 

 

 

 

 

 

 

 

 

 

 

 

 

7

 

SUMMARY OF OPERATING STATISTICS - PRODUCTION

 

 

Second Quarter

 

Six Months

 

 

 

2009

 

2008

 

2009

 

2008

 

NET OIL, GAS AND LIQUIDS

 

 

 

 

 

 

 

 

 

PRODUCTION PER DAY

 

 

 

 

 

 

 

 

 

United States

 

 

 

 

 

 

 

 

 

Crude Oil and Liquids (MBBL)

 

267

 

258

 

271

 

260

 

Natural Gas (MMCF)

 

621

 

602

 

621

 

591

 

 

 

 

 

 

 

 

 

 

 

Latin America

 

 

 

 

 

 

 

 

 

Crude Oil (MBBL)

 

 

 

 

 

 

 

 

 

Argentina

 

38

 

24

 

38

 

30

 

Colombia

 

47

 

43

 

47

 

42

 

Total

 

85

 

67

 

85

 

72

 

Natural Gas (MMCF)

 

49

 

35

 

49

 

39

 

 

 

 

 

 

 

 

 

 

 

Middle East/North Africa

 

 

 

 

 

 

 

 

 

Crude Oil and Liquids (MBBL)

 

 

 

 

 

 

 

 

 

Oman

 

38

 

21

 

36

 

20

 

Dolphin

 

25

 

19

 

23

 

20

 

Qatar

 

46

 

48

 

49

 

47

 

Yemen

 

26

 

20

 

27

 

23

 

Libya

 

7

 

20

 

8

 

21

 

Total

 

142

 

128

 

143

 

131

 

Natural Gas (MMCF)

 

265

 

188

 

247

 

205

 

 

 

 

 

 

 

 

 

 

 

Barrels of Oil Equivalent (MBOE)

 

 

 

 

 

 

 

 

 

Subtotal consolidated subsidiaries

 

650

 

590

 

652

 

602

 

Colombia-minority interest

 

(6

)

(6

)

(6

)

(6

)

Yemen-Occidental net interest

 

3

 

2

 

3

 

2

 

Total Worldwide Production Volumes - MBOE

 

647

 

586

 

649

 

598

 

 

 

 

 

 

 

 

 

 

 

 

 

8

 

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.

 

 

9

 

SIGNIFICANT TRANSACTIONS AND EVENTS AFFECTING EARNINGS

 

 

Second Quarter

 

($ millions, except

 

 

 

 

Diluted

 

 

 

 

Diluted

 

per-share amounts)

 

 

2009

 

 

EPS

 

 

2008

 

 

EPS

 

TOTAL REPORTED EARNINGS*

 

$

682

 

$

0.84

 

$

2,297

 

$

2.78

 

Oil and Gas*

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Earnings

 

$

1,083

 

 

 

 

$

3,806

 

 

 

 

Add:

 

 

 

 

 

 

 

 

 

 

 

 

 

No significant items affecting earnings

 

 

—

 

 

 

 

 

—

 

 

 

 

Segment Core Results

 

 

1,083

 

 

 

 

 

3,806

 

 

 

 

Chemicals

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Earnings

 

 

115

 

 

 

 

 

144

 

 

 

 

Add:

 

 

 

 

 

 

 

 

 

 

 

 

 

No significant items affecting earnings

 

 

—

 

 

 

 

 

—

 

 

 

 

Segment Core Results

 

 

115

 

 

 

 

 

144

 

 

 

 

Midstream, marketing and other

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Earnings

 

 

63

 

 

 

 

 

161

 

 

 

 

Add:

 

 

 

 

 

 

 

 

 

 

 

 

 

No significant items affecting earnings

 

 

—

 

 

 

 

 

—

 

 

 

 

Segment Core Results

 

 

63

 

 

 

 

 

161

 

 

 

 

Total Segment Core Results

 

 

1,261

 

 

 

 

 

4,111

 

 

 

 

Corporate

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate Results — Non Segment**

 

 

(579

)

 

 

 

 

(1,814

)

 

 

 

Add:

 

 

 

 

 

 

 

 

 

 

 

 

 

Severance accrual

 

 

8

 

 

 

 

 

—

 

 

 

 

Tax effect of pre-tax adjustments

 

 

(3

)

 

 

 

 

—

 

 

 

 

Discontinued operations, net***

 

 

2

 

 

 

 

 

3

 

 

 

 

Corporate Core Results — Non Segment

 

 

(572

)

 

 

 

 

(1,811

)

 

 

 

TOTAL CORE RESULTS

 

$

689

 

$

0.85

 

$

2,300

 

$

2.78

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

*

Represents amounts attributable to common stock, after deducting non-controlling interest of $12 million and $37 million for the second quarter 2009 and 2008, respectively.

**

Net interest expense, income taxes, G&A expense and other.

***

Amounts shown after tax.

 

 

10

 

SIGNIFICANT TRANSACTIONS AND EVENTS AFFECTING EARNINGS (continued)

 

 

Six Months

 

($ millions, except

 

 

 

 

Diluted

 

 

 

 

Diluted

 

per-share amounts)

 

 

2009

 

 

EPS

 

 

2008

 

 

EPS

 

TOTAL REPORTED EARNINGS*

 

$

1,050

 

$

1.29

 

$

4,143

 

$

5.00

 

Oil and Gas*

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Earnings

 

$

1,628

 

 

 

 

$

6,694

 

 

 

 

Add:

 

 

 

 

 

 

 

 

 

 

 

 

 

Rig terminations

 

 

8

 

 

 

 

 

—

 

 

 

 

Segment Core Results

 

 

1,636

 

 

 

 

 

6,694

 

 

 

 

Chemicals

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Earnings

 

 

284

 

 

 

 

 

323

 

 

 

 

Add:

 

 

 

 

 

 

 

 

 

 

 

 

 

No significant items affecting earnings

 

 

—

 

 

 

 

 

—

 

 

 

 

Segment Core Results

 

 

284

 

 

 

 

 

323

 

 

 

 

Midstream, marketing and other

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Earnings

 

 

77

 

 

 

 

 

284

 

 

 

 

Add:

 

 

 

 

 

 

 

 

 

 

 

 

 

No significant items affecting earnings

 

 

—

 

 

 

 

 

—

 

 

 

 

Segment Core Results

 

 

77

 

 

 

 

 

284

 

 

 

 

Total Segment Core Results

 

 

1,997

 

 

 

 

 

7,301

 

 

 

 

Corporate

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate Results — Non Segment**

 

 

(939

)

 

 

 

 

(3,158

)

 

 

 

Add:

 

 

 

 

 

 

 

 

 

 

 

 

 

Severance accruals

 

 

40

 

 

 

 

 

—

 

 

 

 

Railcar leases

 

 

15

 

 

 

 

 

—

 

 

 

 

Tax effect of pre-tax adjustments

 

 

(22

)

 

 

 

 

—

 

 

 

 

Discontinued operations, net***

 

 

5

 

 

 

 

 

(24

)

 

 

 

Corporate Core Results — Non Segment

 

 

(901

)

 

 

 

 

(3,182

)

 

 

 

TOTAL CORE RESULTS

 

$

1,096

 

$

1.34

 

$

4,119

 

$

4.97

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

*

Represents amounts attributable to common stock, after deducting non-controlling interest of $21 million and $66 million for the six months 2009 and 2008, respectively.

**

Net interest expense, income taxes, G&A expense and other.

***

Amounts shown after tax.

 

 

11