Occidental Petroleum Announces First Quarter 2010 Results

LOS ANGELES--(BUSINESS WIRE)--Occidental Petroleum Corporation (NYSE: OXY) announced income from continuing operations of $1.1 billion ($1.32 per diluted share) for the first quarter of 2010, compared with $371 million ($0.45 per diluted share) for the first quarter of 2009.

In announcing the results, Dr. Ray R. Irani, Chairman and Chief Executive Officer, said, "We continue to see progressive growth in Occidental’s quarterly net income into 2010. The first quarter 2010 income from continuing operations of $1.1 billion was a 189-percent increase over the same period of 2009 and reflects strengthening of worldwide product prices and higher volumes. The first quarter 2010 production was 743,000 BOE per day, a 4.5 percent-increase from the first quarter of 2009 despite losing 38,000 BOE per day from the effect of production sharing and similar contracts. The first quarter 2010 results generated cash flow from operating activities of $2.2 billion. Free cash flow after capital spending and dividends was $1.1 billion.

"We are looking forward to our May 19 meeting with the financial community in New York City, where we will discuss exciting opportunities for Occidental's future growth."

QUARTERLY RESULTS

Oil and Gas

Oil and gas segment earnings were $1.8 billion for the first quarter of 2010, compared with $545 million for the same period in 2009. The increase in the first quarter of 2010 results was due to higher crude oil and natural gas prices and higher volumes.

For the first quarter of 2010, daily oil and gas sales volumes averaged 726,000 barrels of oil equivalent (BOE), compared with 713,000 BOE in the first quarter of 2009. Volumes increased in the Middle East/North Africa and California and were partially offset by decreases in Latin America. The Middle East/North Africa increase included new production from the Bahrain start-up and increased production from the Mukhaizna field in Oman. Latin America volumes dropped in Argentina due to a labor strike. Production was negatively impacted in the Middle East/North Africa, Long Beach and Colombia due to higher oil prices affecting our production sharing and similar contracts by 38,000 BOE per day. Underlying daily production volumes were 743,000 BOE in the first quarter of 2010 compared to 711,000 BOE in the first quarter of 2009, largely reflecting the Bahrain production.

Oxy's realized price for worldwide crude oil was $71.88 per barrel for the first quarter of 2010, compared with $39.29 per barrel for the first quarter of 2009. Domestic realized gas prices rose from $3.54 per MCF in the first quarter of 2009 to $5.62 per MCF for the first quarter of 2010.

Chemicals

Chemical segment earnings for the first quarter of 2010 were $30 million, compared with $169 million for the same period in 2009. The first quarter 2010 results reflect the continued weakness in the domestic market, particularly in the housing and construction sectors, and the significant margin erosion that was experienced through 2009 that carried into 2010.

Midstream, Marketing and Other

Midstream segment earnings were $94 million for the first quarter of 2010, compared with $14 million for the first quarter of 2009. Earnings for the first quarter of 2010 reflect higher margins in the marketing and trading businesses, improved prices in the gas processing business, and higher pipeline income from Dolphin.

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. 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 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.

For further analysis of Occidental's quarterly performance, please visit the web site: www.oxy.com

					Attachment 1
SUMMARY OF SEGMENT NET SALES AND EARNINGS
		First Quarter
($ millions, except per-share amounts)			2010				2009
SEGMENT NET SALES
Oil and Gas		$	3,646			$	2,137
Chemical			956				792
Midstream, Marketing and Other			369				228
Eliminations			(200	)			(84	)
Net Sales		$	4,771			$	3,073
SEGMENT EARNINGS
Oil and Gas (a)		$	1,819			$	545
Chemical			30				169
Midstream, Marketing and Other			94				14
			1,943				728
Unallocated Corporate Items
Interest expense, net			(36	)			(20	)
Income taxes			(729	)			(241	)
Other (b)			(107	)			(96	)
Income from Continuing Operations (a)			1,071				371
Discontinued operations, net			(7	)			(3	)
NET INCOME (a)		$	1,064			$	368
BASIC EARNINGS PER COMMON SHARE
Income from continuing operations		$	1.32			$	0.45
Discontinued operations, net			(0.01	)			-
		$	1.31			$	0.45
DILUTED EARNINGS PER COMMON SHARE
Income from continuing operations		$	1.32			$	0.45
Discontinued operations, net			(0.01	)			-
		$	1.31			$	0.45
AVERAGE BASIC COMMON SHARES
OUTSTANDING
BASIC			812.1				810.7
DILUTED			813.5				813.3
(a) Net Income - Net income and income from continuing operations represent amounts attributable to Common Stock, after deducting non-controlling interest of $24 million and $9 million for the first quarter of 2010 and 2009, respectively. Oil and gas segment earnings are presented net of these non-controlling interest amounts.
(b) Unallocated Corporate Items - Other - The first quarter of 2009 includes pre-tax charges of $32 million related to severance and $15 million for railcar leases.

					Attachment 2
SUMMARY OF CAPITAL EXPENDITURES AND DD&A EXPENSE
		First Quarter
($ millions)			2010				2009
CAPITAL EXPENDITURES		$	848			$	1,071
DEPRECIATION, DEPLETION AND
AMORTIZATION OF ASSETS		$	874			$	786
ITEMS AFFECTING COMPARABILITY OF CORE EARNINGS
BETWEEN PERIODS
Income / (Expense)		First Quarter
($ millions)			2010				2009
Foreign exchange gains and (losses) *		$	(5	)		$	37
* Amounts shown after tax.

				Attachment 3
SUMMARY OF OPERATING STATISTICS - SALES
		First Quarter
		2010		2009
NET OIL, GAS AND LIQUIDS SALES PER DAY
United States
Crude Oil and Liquids (MBBL)
California		94		97
Permian		160		166
Midcontinent Gas		17		13
Total		271		276
Natural Gas (MMCF)
California		295		216
Permian		125		124
Midcontinent Gas		255		280
Total		675		620
Latin America
Crude Oil (MBBL)
Argentina		36		45
Colombia		33		41
Total		69		86
Natural Gas (MMCF)
Argentina		31		33
Bolivia		12		15
Total		43		48
Middle East / North Africa
Crude Oil and Liquids (MBBL)
Bahrain		2		-
Dolphin		23		23
Libya		4		6
Oman		56		46
Qatar		74		75
Yemen		33		42
Total		192		192
Natural Gas (MMCF)
Bahrain		166		-
Dolphin		228		233
Oman		52		53
Total		446		286
Barrels of Oil Equivalent (MBOE)
Total Sales - MBOE		726		713

			Attachment 4
SUMMARY OF OPERATING STATISTICS - PRODUCTION
		First Quarter
		2010		2009
NET OIL, GAS AND LIQUIDS PRODUCTION
PER DAY
United States
Crude Oil and Liquids (MBBL)		271		276
Natural Gas (MMCF)		675		620
Latin America
Crude Oil (MBBL)
Argentina		37		39
Colombia		34		42
Total		71		81
Natural Gas (MMCF)		43		48
Middle East / North Africa
Crude Oil and Liquids (MBBL)
Bahrain		3		-
Dolphin		23		24
Libya		14		9
Oman		57		45
Qatar		75		79
Yemen		35		38
Total		207		195
Natural Gas (MMCF)		446		286
Barrels of Oil Equivalent (MBOE)
Total Worldwide Production - MBOE		743		711

												Attachment 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.
		First Quarter
($ millions, except per-share amounts)			2010			Diluted EPS				2009			Diluted EPS
TOTAL REPORTED EARNINGS		$	1,064			$	1.31		$	368			$	0.45
Oil and Gas
Segment Earnings		$	1,819						$	545
Add:
Rig contract terminations			-							8
Segment Core Results			1,819							553
Chemicals
Segment Earnings			30							169
Add:
No significant items affecting earnings			-							-
Segment Core Results			30							169
Midstream, Marketing and Other
Segment Earnings			94							14
Add:
No significant items affecting earnings			-							-
Segment Core Results			94							14
Total Segment Core Results			1,943							736
Corporate
Corporate Results --
Non Segment *			(879	)						(360	)
Add:
Severance accrual			-							32
Railcar leases			-							15
Tax effect of pre-tax adjustments			-							(19	)
Discontinued operations, net **			7							3
Corporate Core Results - Non Segment			(872	)						(329	)
TOTAL CORE RESULTS		$	1,071			$	1.32		$	407			$	0.50
* Interest expense, income taxes, G&A expense and other.
** Amounts shown after tax.