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Occidental Petroleum Replaces 206 Percent of 2009 Production

  • 2009 year-end proved reserves 3.23 billion BOE, an increase of 8 percent
  • Three-year reserve replacement ratio 160 percent

LOS ANGELES--(BUSINESS WIRE)--Occidental Petroleum Corporation (NYSE: OXY) announced today that at year-end 2009, the company's preliminary worldwide proved reserves totaled 3.23 billion barrels of oil equivalent (BOE) compared to 2.98 billion BOE at the end of 2008. In 2009, the company had proved reserve additions from all sources of 483 million BOE, compared to production of 235 million BOE, for a production replacement ratio of 206 percent.

Dr. Ray R. Irani, Chairman and Chief Executive Officer, said, "We are pleased to have replaced 206 percent of our 2009 production largely through improved recovery and extensions and discoveries. Over the last three years, we replaced 160 percent of our production. Our finding and development costs in 2009 were $7.90 per BOE. For the last three-year period, our finding and development costs averaged about $15.10 per barrel."

As of December 31, 2009, 73 percent of the Company's proved reserves consisted of oil and 27 percent of gas. Of the total proved reserves, approximately 64 percent was in the United States and 36 percent were located in international locations. Approximately 23 percent of the proved reserves were proved undeveloped and 77 percent were proved developed.

Of the total reserve changes, improved recovery, which reflects the Company's enhanced oil recovery activities, represented 173 million BOE of proved reserves additions, mainly in California, Permian and Oman, through the Mukhaizna project.

Extensions and discoveries added another 92 million BOE of reserves, mainly in the Kern County discovery area, with smaller additions internationally. The Company added another 160 million BOE through purchases of proved reserves largely consisting of several domestic acquisitions in California and New Mexico and reflecting the Bahrain Field redevelopment project.

Revisions of previous estimates provided a net 58 million BOE additions to reserves. The additions included a net positive effect from production sharing contracts in the Middle East/North Africa. Domestic positive oil price-related revisions were more than offset by negative gas price-related revisions, and other changes in the United States and Argentina.

Occidental's costs incurred for exploration and development activities and acquisitions were $3.8 billion. The acquisition costs were primarily domestic, mainly in California and New Mexico.

For the three-year period 2007 through 2009, Occidental's proved reserve additions totaled 1.1 billion BOE, and total production equaled 663 million BOE, for a reserve replacement ratio of 160 percent. Total costs incurred during this three-year period were $16 billion.

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.

             
 
Attachment 1
                             
 
OIL AND GAS
PRELIMINARY RESERVES
 
The following table sets forth Occidental's net interests in quantities of proved developed and undeveloped reserves of crude oil, natural gas liquids (NGLs), condensate and natural gas and changes in such quantities. Crude oil reserves (in millions of barrels) include condensate and NGLs. Natural gas volumes (in billion cubic feet) have been converted to barrels of oil equivalent (BOE) based on energy content of 6,000 cubic feet of gas to one barrel of oil.
 
 
United Latin Middle East / Total
  States America North Africa Million

Oil (b)

Gas (c)

Oil (b)

Gas (c)

Oil (b)

Gas (c)

BOE (d)

Proved Developed and
Undeveloped Reserves
 
Balance at December 31, 2006 1,660 2,424 220 194 330 1,106 2,830
Revisions of previous estimates (20 ) 35 (17 ) 5 (43 ) (130 ) (95 )
Improved recovery 114 406 17 5 53 6 254
Extensions and discoveries 1 5 14 19 2 11 23
Purchases of proved reserves 47 18 - - 10 - 60
Sales of proved reserves - - - - - - -
Production (95 ) (216 ) (25 ) (15 ) (44 ) (30 ) (208 )
Balance at December 31, 2007 1,707 2,672 209 208 308 963 2,864
Revisions of previous estimates (243 ) (490 ) (8 ) (26 ) 137 328 (145 )
Improved recovery 99 281 44 46 46 21 247
Extensions and discoveries 11 76 - - - - 24
Purchases of proved reserves 71 832 - - - - 210
Sales of proved reserves (2 ) (3 ) - - - - (3 )
Production (96 ) (215 ) (26 ) (16 ) (47 ) (76 ) (220 )
Balance at December 31, 2008 1,547 3,153 219 212 444 1,236 2,977
Revisions of previous estimates 58 (688 ) (32 ) (40 ) 108 281 58
Improved recovery 56 137 37 26 51 11 173
Extensions and discoveries 29 362 2 2 - - 92
Purchases of proved reserves 15 67 - - 11 736 160
Sales of proved reserves - - - - - - -
Production (99 ) (232 ) (28 ) (17 ) (52 ) (89 ) (235 )
Balance at December 31, 2009 1,606   2,799   198   183   562   2,175   3,225  
 
Proved Developed Reserves (a)
December 31, 2006 1,382 1,940 135 137 251 560 2,208
December 31, 2007 1,406 1,997 115 140 265 932 2,298
December 31, 2008 1,209 1,866 119 142 345 1,206 2,209
December 31, 2009 1,286 1,931 125 125 446 1,759 2,493
 

(a)

 

Approximately 5 percent of the proved developed oil reserves and approximately 2 percent of the proved developed gas reserves at December 31, 2009 are non-producing.

(b)

Millions of barrels

(c)

Billions of cubic feet

(d)

Natural gas volumes have been converted to barrels based on energy content of six thousand cubic feet of gas to one barrel of oil.

 

 
       
Attachment 2
                 
 
PRELIMINARY
COSTS INCURRED
 
Occidental's 2009, 2008 and 2007 costs incurred in oil and gas property acquisition, exploration and development activities, whether capitalized or expensed, were as follows:
 
 
United Latin Middle East /
($ Millions) States America North Africa Total
For the Year Ended
December 31, 2009
Property Acquisition Costs
Proved Properties $ 569 $ - $ 158 $ 727
Unproved Properties 100 - 3 103
Exploration Costs 131 26 50 207
Development Costs   1,223   560     996   2,779
Costs Incurred $ 2,023 $ 586   $ 1,207 $ 3,816
 
For the Year Ended
December 31, 2008
Property Acquisition Costs
Proved Properties $ 1,819 $ 8 $ 4 $ 1,831
Unproved Properties 1,362 - 348 1,710
Exploration Costs 130 96 115 341
Development Costs   1,740   864     1,496   4,100
Costs Incurred $ 5,051 $ 968   $ 1,963 $ 7,982
 
For the Year Ended
December 31, 2007
Property Acquisition Costs
Proved Properties $ 626 $ - $ 300 $ 926
Unproved Properties 167 (58 ) 10 119
Exploration Costs 39 79 213 331
Development Costs   1,268   524     1,032   2,824
Costs Incurred $ 2,100 $ 545   $ 1,555 $ 4,200
 
 
                                                       
Attachment 3
                                                                       
 
PRELIMINARY
MULTI-YEAR DATA
 
A B C D = C/A E = A/B
Reserve Costs Finding & Reserve
Additions Production Incurred Development Replacement
  (Million BOE) (Million BOE) ($ Millions) Costs Per BOE Ratio
2005 380 179 4,185 $ 11.01 212 %
2006 506 208 8,785 (a) $ 17.36 243 %
2007 242 208 4,200 $ 17.36 116 %
2008 336 220 7,982 $ 23.76 153 %
2009 483 235 3,816 $ 7.90 206 %
3-Year Average 353 221 5,333 $ 15.12 160 %
5-Year Average 389 210 5,794 $ 14.88 185 %
 
 
Reserves Replacement Improved Extensions
(Million BOE) Revisions Recovery Discoveries Acquisitions Total
2005 (6 ) 129 118 139 380
2006 10 136 34 326 506
2007 (95 ) 254 23 60 242
2008 (145 ) 247 24 210 336
2009 58 173 92 160 483
3-Year Average (61 ) 225 46 143 353
5-Year Average (36 ) 188 58 179 389
 
 
Exploration Development
Acquisitions Costs Costs Total
Costs Incurred
($ Millions)
2005 2,166 232 1,787 4,185
2006 6,030 313 2,442 8,785 (a)
2007 1,045 331 2,824 4,200
2008 3,541 341 4,100 7,982
2009 830 207 2,779 3,816
3-Year Average 1,806 293 3,234 5,333
5-Year Average 2,723 285 2,786 5,794
 

(a)

 

Includes acquisition costs and related step-up for deferred income taxes of $1.34 billion for the purchase of Vintage Petroleum Inc. There was no goodwill recorded for this acquisition.

Contacts

Occidental Petroleum Corporation
Richard S. Kline (media)
richard_kline@oxy.com
310-443-6249
or
Chris Stavros (investors)
chris_stavros@oxy.com
212-603-8184
On the web: www.oxy.com

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