EX-99.1 2 a08-19876_1ex99d1.htm EX-99.1

Exhibit 99.1

Occidental Petroleum Corporation

10889 Wilshire Boulevard
Los Angeles, California 90024-4201
310.208.8800
www.oxy.com

For Immediate Release: July 24, 2008

Occidental Petroleum Announces Record Net Income for Second Quarter and First Six Months of 2008

LOS ANGELES, July 24, 2008 -- Occidental Petroleum Corporation (NYSE: OXY) announced net income of $2.297 billion ($2.78 per diluted share) for the second quarter of 2008, compared with $1.412 billion ($1.68 per diluted share) for the second quarter of 2007.

Core results for the second quarter of 2008 were $2.300 billion ($2.79 per diluted share), compared with $943 million ($1.12 per diluted share) for the second quarter of 2007. See the attached schedule for a reconciliation of net income to core results.

In announcing the results, Dr. Ray R. Irani, Chairman and Chief Executive Officer, said, “Oxy’s record net income for the second quarter of 2008 beat the previous record set during the first quarter of 2008 by 24 percent. Occidental’s first six months of 2008 net income was 58 percent higher than our previous record first six month income achieved in 2007.

“Our production grew by 5 percent for the second quarter, and nearly 7 percent for the first six months compared to last year, and we plan to increase capital expenditures to $4.7 billion in 2008 to accelerate growth. The additional capital funds will be used to drill and recomplete approximately 400 wells, mainly in California, Texas and Colorado, as well as in Argentina, Colombia and Libya.”

QUARTERLY RESULTS

Oil and Gas

Oil and gas segment earnings were $3.806 billion for the second quarter of 2008, compared with $1.658 billion for the same period in 2007. The $2.1 billion increase in the second quarter 2008 segment earnings reflected $2.2 billion of increases from record crude oil and higher natural gas prices, higher oil and

gas production and lower exploration expense, partially offset by increased DD&A rates and higher operating expenses.

For the second quarter of 2008, daily oil and gas production averaged 588,000 barrels of oil equivalent (BOE), compared with 558,000 BOE per day produced in the second quarter of 2007. The bulk of the production increase was the result of 46,000 BOE per day from the Dolphin project, which began production in the third quarter of 2007, and 11,000 BOE per day from recently acquired domestic assets, partially offset by lower production from Argentina as a result of a strike in May and by 19,000 BOE per day lower production caused by higher oil prices affecting our production sharing contracts. Argentina production was impacted by 15,000 BOE per day from the strike which lasted approximately five weeks and also halted all drilling programs. Production is now back at approximately pre-strike levels.

Oxy’s realized price for worldwide crude oil was $110.12 per barrel for the second quarter of 2008, compared with $59.11 per barrel for the second quarter of 2007. Domestic realized gas prices increased from $7.07 per MCF in the second quarter of 2007 to $9.99 per MCF for the second quarter of 2008.

Chemicals

Chemical segment earnings for the second quarter of 2008 were $144 million, compared with $158 million for the same period in 2007. The second quarter of 2008 results reflect lower volumes and margins for chlorine and polyvinyl chloride, partially offset by higher margins for caustic soda.

Midstream, Marketing and Other

Midstream segment earnings were $161 million for the second quarter of 2008, compared with $25 million for the second quarter of 2007. The second quarter of 2008 reflects higher pipeline income from Dolphin, which came on line in the second half of 2007, and higher margins in gas processing and marketing. Positive mark to market adjustments also contributed to pipeline and storage earnings during the second quarter of 2008.

SIX MONTHS RESULTS

Net income for the six months of 2008 was $4.143 billion ($5.01 per diluted share), compared with $2.624 billion ($3.11 per diluted share) for the six months of 2007.

Core results were $4.119 billion ($4.98 per diluted share) for the six months of 2008, compared with $1.731 billion ($2.05 per diluted share) for the six months of 2007. See the attached schedule for a reconciliation of net income to core results.

Oil and Gas

Oil and gas segment earnings were $6.694 billion for the six months of 2008, compared with $3.541 billion for the same period of 2007. Oil and gas core results were $2.994 billion for the six months of 2007 after excluding a gain from the sale of Occidental’s Russian joint venture interests of $412 million, a $23 million gain from the sale of other oil and gas interests and $112 million income from the resolution of certain legal disputes. The $3.7 billion increase in the 2008 core results from $2.994 billion in 2007 reflected $3.8 billion from higher crude oil and natural gas prices, increased oil and gas production and lower exploration expense, partially offset by higher operating expenses and increased DD&A rates.

Daily oil and gas production for the first six months was 598,000 BOE per day for 2008, compared with 559,000 BOE per day for the same 2007 period. The nearly 7-percent increase was largely the result of 50,000 BOE per day from the Dolphin project and 7,000 BOE from recently acquired domestic assets, partially offset by 14,000 BOE per day from production sharing contracts, where volumes decrease with higher oil prices, and 7,000 BOE per day decrease in Argentina due to the strike.

Oxy’s realized price for worldwide crude oil was $98.16 per barrel for the six months of 2008, compared with $55.34 per barrel for the six months of 2007. Domestic realized gas prices increased from $6.74 per MCF in the six months of 2007 to $9.09 per MCF in the six months of 2008.

Chemicals

Chemical segment earnings were $323 million for the six months of 2008, compared with $295 million for the six months of

2007. The six months 2008 results reflect higher margins for caustic soda, partially offset by lower margins for polyvinyl chloride.

Midstream, Marketing and Other

Midstream segment earnings were $284 million for the six months of 2008, compared with $143 million for the same period in 2007. The improvement in 2008 reflected higher pipeline income from the Dolphin Pipeline and higher margins in gas processing and power generation.

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,” “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.

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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

SUMMARY OF SEGMENT NET SALES AND EARNINGS

(Millions, except	Second Quarter						Six Months
per-share amounts)	2008			2007			2008			2007
SEGMENT NET SALES
Oil and Gas	$	5,501		$	3,061		$	10,019		$	5,781
Chemical	1,386			1,229			2,653			2,289
Midstream, Marketing and Other	418			280			823			638
Eliminations	(189		)	(159		)	(359		)	(282		)
Net sales	$	7,116		$	4,411		$	13,136		$	8,426
SEGMENT EARNINGS
Oil and Gas (a)	$	3,806		$	1,658		$	6,694		$	3,541
Chemical	144			158			323			295
Midstream, Marketing and Other	161			25			284			143
	4,111			1,841			7,301			3,979
Unallocated Corporate Items
Interest expense, net (b)	(7		)	6			(7		)	(175		)
Income taxes	(1,671		)	(904		)	(2,965		)	(1,588		)
Other (c)	(133		)	202			(210		)	98

Income from Continuing Operations	2,300			1,145			4,119			2,314
Discontinued operations, net (d)	(3		)	267			24			310
NET INCOME	$	2,297		$	1,412		$	4,143		$	2,624
BASIC EARNINGS PER COMMON SHARE
Income from continuing operations	$	2.80		$	1.36		$	5.01		$	2.76
Discontinued operations, net (d)	--			0.32			0.03			0.37
	$	2.80		$	1.68		$	5.04		$	3.13
DILUTED EARNINGS PER COMMON SHARE
Income from continuing operations	$	2.78		$	1.36		$	4.98		$	2.74
Discontinued operations, net (d)	--			0.32			0.03			0.37
	$	2.78		$	1.68		$	5.01		$	3.11
AVERAGE COMMON SHARES OUTSTANDING
BASIC	821.3			837.7			822.5			839.3
DILUTED	825.5			841.8			826.9			843.2

See footnotes on following page.

(a) Oil and Gas - The second quarter of 2007 includes a pre-tax gain from the sale of oil and gas interests. The six months of 2007 also includes after-tax gains of $412 million from the sale of Occidental’s Russian joint venture interests and $112 million resulting from the resolution of certain legal disputes.

(b) Interest Expense, net -The first six months of 2007 includes $167 million of pre-tax interest charges for the purchase of various debt issues in the open market.

(c) Unallocated Corporate Items - Other - The second quarter of 2007 includes a $284 million pre-tax gain from the sale of Lyondell shares. The first six months of 2007 also includes a $47 million pre-tax charge for a plant closure and related environmental remediation reserve.

(d) Discontinued Operations, net - In the first half of 2008, Occidental received payment from Ecuador for 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

	Second Quarter				Six Months
($ millions)	2008		2007		2008		2007
CAPITAL EXPENDITURES	$	1,116	$	850	$	1,984	$	1,630
DEPRECIATION, DEPLETION AND AMORTIZATION OF ASSETS	$	621	$	564	$	1,274	$	1,138

SUMMARY OF OPERATING STATISTICS

	Second Quarter				Six Months
	2008		2007		2008		2007
NET OIL, GAS AND LIQUIDS PRODUCTION PER DAY
United States
Crude Oil and Liquids (MBBL)
California	84		93		86		89
Permian	169		163		170		164
Midcontinent and Rockies	5		3		4		4
Total	258		259		260		257
Natural Gas (MMCF)
California	238		268		241		250
Permian	190		187		184		192
Midcontinent and Rockies	174		154		166		152
Total	602		609		591		594
Latin America
Crude Oil (MBBL)
Argentina	22		34		29		33
Colombia	43		44		43		43
Total	65		78		72		76
Natural Gas (MMCF)
Argentina	14		28		18		25
Bolivia	21		18		21		16
Total	35		46		39		41
Middle East/North Africa
Crude Oil and Liquids (MBBL)
Oman	21		19		20		21
Dolphin	19		--		20		--
Qatar	45		47		46		46
Yemen	20		25		23		28
Libya	27		19		23		23
Total	132		110		132		118
Natural Gas (MMCF)
Oman	25		32		23		29
Dolphin	163		--		182		--
Total	188		32		205		29
Barrels of Oil Equivalent (MBOE)
Subtotal consolidated subsidiaries	593		561		603		562
Colombia-minority interest	(7	)	(6	)	(7	)	(6	)
Yemen-Occidental net interest	2		3		2		3
Total Worldwide Production-MBOE	588		558		598		559

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.

SIGNIFICANT TRANSACTIONS AND EVENTS AFFECTING EARNINGS

	Second Quarter
($ millions, except				Diluted					Diluted
per-share amounts)	2008			EPS		2007			EPS
TOTAL REPORTED EARNINGS	$	2,297		$	2.78	$	1,412		$	1.68
Oil and Gas
Segment Earnings	$	3,806				$	1,658
Less:
Gain on sale of oil & gas interests	--					23
Legal settlements**	--					3
Segment Core Results	3,806					1,632
Chemicals
Segment Earnings	144					158
Less:
No significant items affecting earnings	--					--
Segment Core Results	144					158

Midstream, marketing and other
Segment Earnings	161					25
Less:
No significant items affecting earnings	--					--
Segment Core Results	161					25
Total Segment Core Results	4,111					1,815
Corporate
Corporate Results --
Non Segment*	(1,814		)			(429		)
Less:
Debt purchase expense	--					5
Gain on sale of Lyondell shares	--					284
Tax effect of pre-tax adjustments	--					(113		)
Discontinued operations, net**	(3		)			267
Corporate Core Results --
Non Segment	(1,811		)			(872		)
TOTAL CORE RESULTS	$	2,300		$	2.79	$	943		$	1.12

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

** Amounts shown after tax.

SIGNIFICANT TRANSACTIONS AND EVENTS AFFECTING EARNINGS (continued)

	Six Months
($ millions, except				Diluted					Diluted
per-share amounts)	2008			EPS		2007			EPS
TOTAL REPORTED EARNINGS	$	4,143		$	5.01	$	2,624		$	3.11
Oil and Gas
Segment Earnings	$	6,694				$	3,541
Less:
Gain on sale of oil & gas interests	--					23
Russia joint venture**	--					412
Legal settlements**	--					112
Segment Core Results	6,694					2,994
Chemicals
Segment Earnings	323					295
Less:
No significant items affecting earnings	--					--
Segment Core Results	323					295

Midstream, marketing and other
Segment Earnings	284					143
Less:
No significant items affecting earnings	--					--
Segment Core Results	284					143
Total Segment Core Results	7,301					3,432
Corporate
Corporate Results --
Non Segment*	(3,158		)			(1,355		)
Less:
Debt purchase expense	--					(167		)
Facility closure	--					(47		)
Gain on sale of Lyondell shares	--					284
Tax effect of pre-tax adjustments	--					(34		)
Discontinued operations, net**	24					310
Corporate Core Results --
Non Segment	(3,182		)			(1,701		)
TOTAL CORE RESULTS	$	4,119		$	4.98	$	1,731		$	2.05

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

** Amounts shown after tax.