LOS ANGELES--(BUSINESS WIRE)--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.
For further analysis of Occidental's quarterly performance, please visit
the web site: www.oxy.com
|
|
|
SUMMARY OF SEGMENT NET SALES AND EARNINGS
|
|
|
|
|
|
Second Quarter
|
|
Six Months
|
|
(Millions, except 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
|
|
(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 per-share amounts)
|
|
2008
|
|
Diluted
EPS
|
|
2007
|
|
Diluted
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.
|
|
|
|
Six Months
|
|
($ millions, except per-share amounts)
|
|
2008
|
|
Diluted
EPS
|
|
2007
|
|
Diluted
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.
|