LOS ANGELES--(BUSINESS WIRE)--Occidental Petroleum Corporation (NYSE:OXY) Chairman and Chief Executive
Officer Dr. Ray R. Irani reported on the company's record 2008 financial
and operational achievements at Oxy's annual stockholders' meeting today
in Santa Monica, California.
"Notably in 2008, we achieved record earnings of $6.9 billion -- the
highest in our 88-year history and a 27-percent increase over the 2007
result," Dr. Irani announced. Oxy's net income has increased 166 percent
over the past five years.
Among additional 2008 financial highlights, the company achieved return
on equity (ROE) of 27 percent, and a year-end debt-to-capitalization
ratio of 9 percent -- among the lowest of the major oil and gas
companies, and significantly lower than the average for all U.S.
industrial companies. Oxy finished 2008 with cash of $1.8 billion and
very little net debt while stockholders' equity increased 20 percent.
Since year-end 2004, Oxy has reduced its debt by 29 percent while
stockholders' equity has grown by 158 percent.
"These achievements underscore the effectiveness of our ongoing business
strategy with its continual focus on building stockholder value. With
our commitment to strict financial management -- limiting risk and
leverage -- Oxy has proven to be well positioned for success, even in
these challenging economic times," said Dr. Irani.
On April 30, Oxy's Board of Directors declared an increase in the
company's annual dividend to stockholders of $.04, to an annual rate of
$1.32 per share of common stock, Dr. Irani announced. Oxy has raised the
dividend every year since 2002. This increase is the company's eighth
over the period, during which Oxy's dividend has risen 164 percent. The
company has paid quarterly dividends continuously since 1975.
Oxy continues to lead its proxy peer group in total stockholder return,
based on stock price appreciation plus dividend reinvestment. Since
2006, Oxy has delivered stockholder return of approximately 60 percent,
outperforming the S&P 500 Index as well as its industry peer group.
Worldwide oil and natural gas production increased by 5.4 percent in
2008, averaging 601,000 barrels of oil equivalent (BOE) per day. The
company continues to earn more income per barrel than its competitors.
In 2008, for the 10th consecutive year, Oxy led its industry peers in
operating income per BOE, with more than $31 per barrel.
In 2008, Oxy replaced 152 percent of its production, including the
effect of price changes from the previous year. Oxy's proved reserve
additions over the past three years total 1.1 billion barrels of oil
equivalent, for an average replacement rate of 173 percent. By
consistently replacing more than 100 percent of its production, Oxy is
an industry leader in reserve replacement.
Stockholders also received updates on significant 2008 activities in
Oxy's core oil and gas producing regions. "Today we have a focused
strategy with 60 percent of our production coming from the United
States, 27 percent coming from the Middle East and 13 percent coming
from Latin America. This approach has been profitable and rewarding,"
said Dr. Irani.
Among the 2008 developments in the United States, Oxy completed two
purchases totaling $2.7 billion for interests in the Permian Basin of
southwest Texas and southeast New Mexico and the Piceance Basin of
Colorado. The acquisitions provided 26,500 BOE per day net to Oxy at the
time of purchase.
In addition, Oxy entered into an agreement to develop a hydrocarbon gas
processing plant and related pipeline infrastructure in West Texas. The
project, which broke ground in March 2009, will provide an
environmentally advantageous process for the use of carbon dioxide to
increase U.S. oil and natural gas production. It is expected to help
boost Oxy's production in the area by a minimum of 50,000 barrels per
day within the next five years.
Oxy also engaged in several transactions in 2008 with its partners in
the Middle East/North Africa, a key growth region for the company. These
included a preliminary agreement with the Abu Dhabi National Oil Company
to develop two fields in the Emirate of Abu Dhabi; an Exploration and
Production Sharing Agreement with Mubadala Development Company to
develop four existing gas fields and explore for new discoveries in the
Sultanate of Oman; and initial work with Bahrain Petroleum Company to
further explore three blocks offshore Bahrain.
Most recently, Oxy was selected as the winning bidder to work with the
National Oil and Gas Authority of Bahrain to further develop the onshore
Bahrain Field. Oxy signed a definitive agreement with the Kingdom of
Bahrain on April 26 and final approval by the Bahraini Parliament is
expected in the near future.
Dr. Irani also reported to stockholders that OxyChem, the company's
highly efficient chemical segment, achieved 11-percent earnings growth
in 2008 -- with total earnings of $669 million. Chemical-reported
earnings accounted for about 6 percent of Oxy's total segment earnings
last year.
At the Annual Meeting, the stockholders reelected the Board of Directors
for a term expiring in 2010, ratified the selection of KPMG LLP as the
independent auditors for 2009 and approved the amendment of the Restated
Certificate of Incorporation to permit the holders of at least 25
percent of the outstanding common stock to call a special meeting. A
stockholder proposal with respect to a report on host country laws did
not pass.
Looking ahead, Dr. Irani said: "We believe Oxy is well positioned to
succeed in today's volatile business environment. As we look to the
future, we will build on Oxy's strengths in order to continue to deliver
performance, growth and value."
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: not successfully completing (or any
material delay in) any expansion, capital expenditure, acquisition, or
disposition; 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
exploration risks, such as drilling of unsuccessful wells. 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.