Occidental Petroleum Announces Fourth Quarter and 12-Month 2009 Results

LOS ANGELES--(BUSINESS WIRE)--Occidental Petroleum Corporation (NYSE: OXY) announced net income of $938 million ($1.15 per diluted share) for the fourth quarter of 2009, compared with $443 million ($0.55 per diluted share) for the fourth quarter of 2008. Core results for the fourth quarter of 2009 were $1.1 billion ($1.30 per diluted share), compared with $957 million ($1.18 per diluted share) for the fourth quarter of 2008. Core results excluded after-tax charges of $120 million ($0.15 per diluted share) for 2009 and $514 million ($0.63 per diluted share) for 2008.

Net income for the twelve months of 2009 was $2.9 billion ($3.58 per diluted share), compared with $6.9 billion ($8.34 per diluted share) for the twelve months of 2008. Full year core results were $3.1 billion ($3.78 per diluted share) for 2009, compared with $7.3 billion ($8.94 per diluted share) for 2008.

In announcing the results, Dr. Ray R. Irani, Chairman and Chief Executive Officer, said, "I am pleased to announce Occidental's production for the twelve months ended December 31, 2009 was 645,000 BOE per day, the highest annual volume in the Company's history. Occidental achieved year-over-year growth of over seven percent for the twelve months of 2009. We expect the 2010 production to increase by 5 percent to 8 percent.

"The year 2009 experienced volatile commodity prices with WTI beginning the year in the low $40 per barrel range and ending the year above $75 per barrel. Occidental reacted to the lower prices by reducing costs in key areas and managing our capital program. We successfully reduced our oil and gas cash production costs, excluding production and property taxes, by 15 percent."

QUARTERLY RESULTS

Oil and Gas

Oil and gas segment earnings were $1.6 billion for the fourth quarter of 2009, compared with $339 million for the same period in 2008. The fourth quarter of 2009 core results were $1.8 billion, excluding a pre-tax loss of $170 million related to impairment of assets. The 2008 core results were $1 billion, excluding pre-tax losses of $657 million relating to the impairment of assets and other items. The $800 million increase in the fourth quarter of 2009 core results was primarily due to higher crude oil prices and sales volumes and lower operating costs.

For the fourth quarter of 2009, daily oil and gas sales volumes averaged 650,000 barrels of oil equivalent (BOE), compared with 620,000 BOE per day in the fourth quarter of 2008, a year-over-year increase of nearly five percent. Volumes increased by 14 percent in the Middle East/North Africa, and two percent each in the United States and 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.

Oxy's realized price for worldwide crude oil was $69.39 per barrel for the fourth quarter of 2009, compared with $53.52 per barrel for the fourth quarter of 2008. Domestic realized gas prices dropped from $4.67 per MCF in the fourth quarter of 2008 to $4.37 per MCF for the fourth quarter of 2009.

Chemicals

Chemical segment earnings for the fourth quarter of 2009 were $33 million, compared with $127 million for the same period in 2008. The fourth quarter of 2008 core results were $217 million after excluding a $90 million pre-tax loss related to plant closure and impairments. The fourth quarter 2009 results reflect the continued weakness in most domestic markets, but in particular U.S. housing, durable goods and agricultural sectors.

Midstream, Marketing and Other

Midstream segment earnings were $81 million for the fourth quarter of 2009, compared with $170 million for the fourth quarter of 2008. Earnings for the fourth quarter of 2009 reflect lower margins in the marketing business in 2009, compared to 2008, partially offset by higher pipeline income from Dolphin and improved margins in the gas processing business.

TWELVE-MONTH RESULTS

Oil and Gas

Oil and gas segment earnings were $4.7 billion for the twelve months of 2009, compared with $10.7 billion for the same period of 2008. Oil and gas core results, after excluding impairments and rig termination costs, were $4.9 billion for the twelve months of 2009, compared to $11.3 billion for the twelve months of 2008. The $6.4 billion decrease in the 2009 core results reflected lower crude oil and natural gas prices, partially offset by increased oil and gas production and lower operating costs.

Daily oil and gas sales volumes for the year were 645,000 BOE per day for 2009, compared with 601,000 BOE per day for the 2008 period, a year-over-year increase of seven percent. Volumes increased 4 percent domestically, mainly in California and Midcontinent Gas, by 10 percent in Latin America, and 13 percent in the Middle East/North Africa. The increase in the Middle East/North Africa resulted from higher production in the Mukhaizna field in Oman and higher volumes resulting from lower year-over-year average oil prices affecting our production sharing contracts.

Oxy's realized price for worldwide crude oil was $55.97 per barrel for the twelve months of 2009, compared with $88.26 per barrel for the twelve months of 2008. Domestic realized gas prices decreased from $8.03 per MCF in the twelve months of 2008 to $3.46 per MCF in the twelve months of 2009.

Chemicals

Chemical segment earnings were $389 million for the twelve months of 2009 compared with $669 million for the twelve months of 2008. The 2008 core results were $759 million after excluding charges for plant closure and impairments. The decrease in 2009 results reflects lower volumes and prices for chlorine, caustic soda, polyvinyl chloride, and vinyl chloride monomer due to the economic slow down, partially offset by lower feedstock and energy costs.

Midstream, Marketing and Other

Midstream segment earnings were $235 million for the twelve months of 2009, compared with $520 million for the same period in 2008. The 2009 results reflect lower marketing income and lower margins in the gas processing business.

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 (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.

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
		Fourth Quarter								Twelve Months
($ millions, except per-share amounts)		2009				2008				2009				2008
SEGMENT NET SALES
Oil and Gas		$	3,646			$	2,746			$	11,598			$	18,187
Chemical			780				1,005				3,225				5,112
Midstream, Marketing and Other			253				394				1,016				1,598
Eliminations			(140	)			(124	)			(436	)			(680	)
Net Sales		$	4,539			$	4,021			$	15,403			$	24,217
SEGMENT EARNINGS
Oil and Gas (a), (b)		$	1,643			$	339			$	4,735			$	10,651
Chemical (c)			33				127				389				669
Midstream, Marketing and Other			81				170				235				520
			1,757				636				5,359				11,840
Unallocated Corporate Items
Interest expense, net			(33	)			(16	)			(109	)			(26	)
Income taxes			(673	)			(118	)			(1,918	)			(4,629	)
Other (d)			(108	)			(54	)			(405	)			(346	)
Income from Continuing Operations (a)			943				448				2,927				6,839
Discontinued operations, net			(5	)			(5	)			(12	)			18
NET INCOME (a)		$	938			$	443			$	2,915			$	6,857
BASIC EARNINGS PER COMMON SHARE
Income from continuing operations		$	1.16			$	0.55			$	3.60			$	8.35
Discontinued operations, net			(0.01	)			-				(0.01	)			0.02
		$	1.15			$	0.55			$	3.59			$	8.37
DILUTED EARNINGS PER COMMON SHARE
Income from continuing operations		$	1.16			$	0.55			$	3.59			$	8.32
Discontinued operations, net			(0.01	)			-				(0.01	)			0.02
		$	1.15			$	0.55			$	3.58			$	8.34
AVERAGE BASIC COMMON SHARES OUTSTANDING
BASIC			811.8				810.3				811.3				817.6
DILUTED			813.5				811.5				813.8				820.5
(a) Net Income - Net income and income from continuing operations represent amounts attributable to Common Stock, after deducting non-controlling interest amounts of $16 million and $12 million for the fourth quarter and $51 million and $116 million for the twelve months ended December 31, 2009 and 2008, respectively. Oil and gas segment earnings are presented net of these non-controlling interest amounts.
(b) Oil and Gas - The fourth quarter and twelve months of 2009 include a pre-tax charge for asset impairment for $170 million. The twelve months of 2009 also includes $8 million for rig contract termination costs. The fourth quarter and 12 months 2008 include pre-tax charges of $599 million for asset impairments and $58 million for the termination of rig contracts.
(c) Chemical - The fourth quarter and 12 months of 2008 include a pre-tax charge of $90 million for plant closure and impairments costs.
(d) Unallocated Corporate Items - Other - The twelve months of 2009 includes non-core pre-tax charges of $40 million related to severance and $15 million for railcar leases.

Attachment 2
SUMMARY OF CAPITAL EXPENDITURES AND DD&A EXPENSE
						Fourth Quarter																								Twelve Months
($ millions)						2009												2008												2009												2008
CAPITAL EXPENDITURES						$				932								$				1,594								$				3,581								$				4,664
DEPRECIATION, DEPLETION AND AMORTIZATION OF ASSETS						$				820								$				753								$				3,117								$				2,710
ITEMS AFFECTING COMPARABILITY OF CORE EARNINGS BETWEEN PERIODS
						Fourth Quarter																								Twelve Months
($ millions)						2009												2008												2009												2008
Foreign exchange gains *						$				8								$				88								$				36								$				91
* Amounts shown after tax.

Attachment 3
SUMMARY OF OPERATING STATISTICS - SALES
									Fourth Quarter																				Twelve Months
									2009										2008										2009										2008
NET OIL, GAS AND LIQUIDS SALES PER DAY
United States
Crude Oil and Liquids (MBBL)
California									92										97										93										89
Permian									168										167										168										168
Midcontinent Gas									11										9										10										6
Total									271										273										271										263
Natural Gas (MMCF)
California									282										221										250										235
Permian									197										188										199										181
Midcontinent Gas									166										187										186										171
Total									645										596										635										587
Latin America
Crude Oil (MBBL)
Argentina									37										32										37										32
Colombia									36										39										39										37
Total									73										71										76										69
Natural Gas (MMCF)
Argentina									30										24										30										21
Bolivia									12										21										16										21
Total									42										45										46										42
Middle East / North Africa
Crude Oil and Liquids (MBBL)
Oman									43										27										39										23
Dolphin									20										23										21										21
Qatar									48										48										48										47
Yemen									28										22										29										23
Libya									9										10										7										15
Bahrain									1										-										-										-
Total									149										130										144										129
Natural Gas (MMCF)
Oman									19										23										22										24
Dolphin									198										209										213										184
Bahrain									40										-										10										-
Total									257										232										245										208
Barrels of Oil Equivalent (MBOE)									650										620										645										601

Attachment 4
SUMMARY OF OPERATING STATISTICS - PRODUCTION
										Fourth Quarter																					Twelve Months
										2009										2008											2009										2008
NET OIL, GAS AND LIQUIDS PRODUCTION PER DAY
United States
Crude Oil and Liquids (MBBL)										271										273											271										263
Natural Gas (MMCF)										645										596											635										587
Latin America
Crude Oil (MBBL)
Argentina										36										38											36										34
Colombia										36										39											39										38
Total										72										77											75										72
Natural Gas (MMCF)										42										45											46										42
Middle East / North Africa
Crude Oil and Liquids (MBBL)
Oman										45										28											39										23
Dolphin										20										22											22										20
Qatar										46										48											48										47
Yemen										27										22											28										23
Libya										5										8											6										15
Bahrain										1										-											-										-
Total										144										128											143										128
Natural Gas (MMCF)										257										232											245										208
Barrels of Oil Equivalent (MBOE)										644										623											643										603

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. These events may recur, even across successive reporting periods. 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.
		Fourth Quarter
($ millions, except per-share amounts)		2009				Diluted EPS			2008				Diluted EPS
TOTAL REPORTED EARNINGS		$	938			$	1.15		$	443			$	0.55
Oil and Gas
Segment Earnings		$	1,643						$	339
Add:
Asset impairments			170							599
Rig contract terminations			-							58
Segment Core Results			1,813							996
Chemicals
Segment Earnings			33							127
Add:
Plant closure and impairments			-							90
Segment Core Results			33							217
Midstream, Marketing and Other
Segment Earnings			81							170
Add:
No significant items affecting earnings			-							-
Segment Core Results			81							170
Total Segment Core Results			1,927							1,383
Corporate
Corporate Results --
Non Segment *			(819	)						(193	)
Add:
Tax effect of pre-tax adjustments			(55	)						(238	)
Discontinued operations, net **			5							5
Corporate Core Results - Non Segment			(869	)						(426	)
TOTAL CORE RESULTS		$	1,058			$	1.30		$	957			$	1.18
* Interest expense, income taxes, G&A expense and other
** Amounts shown after tax.

Attachment 6
SIGNIFICANT TRANSACTIONS AND EVENTS AFFECTING EARNINGS (continued)
		Twelve Months
($ millions, except per-share amounts)		2009				Diluted EPS			2008				Diluted EPS
TOTAL REPORTED EARNINGS		$	2,915			$	3.58		$	6,857			$	8.34
Oil and Gas
Segment Earnings		$	4,735						$	10,651
Add:
Asset impairments			170							599
Rig contract terminations			8							58
Segment Core Results			4,913							11,308
Chemicals
Segment Earnings			389							669
Add:
Plant closure and impairments			-							90
Segment Core Results			389							759
Midstream, Marketing and Other
Segment Earnings			235							520
Add:
No significant items affecting earnings			-							-
Segment Core Results			235							520
Total Segment Core Results			5,537							12,587
Corporate
Corporate Results --
Non Segment *			(2,444	)						(4,983	)
Add:
Railcar leases			15							-
Severance accruals			40							-
Tax effect of pre-tax adjustments			(77	)						(238	)
Discontinued operations, net **			12							(18	)
Corporate Core Results - Non Segment			(2,454	)						(5,239	)
TOTAL CORE RESULTS		$	3,083			$	3.78		$	7,348			$	8.94
* Interest expense, income taxes, G&A expense and other
** Amounts shown after tax.