UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) May 4, 2007
OCCIDENTAL PETROLEUM CORPORATION
(Exact name of registrant as specified in its charter)
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Delaware |
1-9210 |
95-4035997 |
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(State or
other jurisdiction
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(Commission
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(I.R.S.
Employer
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10889
Wilshire Boulevard
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90024 |
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(Address of principal executive offices) |
(ZIP code) |
Registrant’s telephone number, including area code:
(310) 208-8800
Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Section 7 – Regulation FD
Item 7.01. Regulation FD Disclosure
The full text of the speech made on May 4, 2007, by Dr. Ray R. Irani at the Occidental Petroleum Corporation 2007 Annual Meeting of Stockholders in Santa Monica, California, as well as an appendix reconciling non-GAAP financial measures included in that speech, is attached to this report as Exhibit 99.1.
1
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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OCCIDENTAL PETROLEUM CORPORATION |
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(Registrant) |
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DATE: May 4, 2007 |
/s/ JIM A. LEONARD |
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Jim A.
Leonard, Vice President and Controller
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EXHIBIT INDEX
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99.1 |
Presentation and speech given by Dr. Ray R. Irani, as well as an appendix reconciling non-GAAP financial measures included in that speech. |
EXHIBIT 99.1
Portions
of this presentation contain forward-looking statements and
involve risks and uncertainties that could materially affect expected
results of operations, liquidity, cash flows and business prospects.
Forward-looking statements are generally accompanied by words
such as “estimate”, “project”, “predict”, “will”, “anticipate”,
“plan”,
“intend”, “believe”, “expect” or similar expressions that convey the
uncertainty of future events or outcomes. You should not place
undue reliance on these forward-looking statements. Unless legally
required, Occidental does not undertake any obligation to update
any forward-looking statements, whether as a result of new
information, future events or otherwise.
Certain
risks that may affect Occidental’s results of operations and
financial position appear in Part 1, Item 1A of Occidental’s 2006
Annual Report on Form 10-K.
Reconciliations
to GAAP are provided at
www.oxy.com
for
Worldwide Production and Proved Reserves, Profitability, Free Cash
Flow per BOE, Core Results, Debt to Capitalization, Chemicals Profit
Margins as a Percentage of Sales, and Chemicals Operations Free
Cash Flow.
Occidental Petroleum Corporation
2007 Annual Stockholders Meeting
1
Dr. Ray R. Irani
Chairman, President and Chief Executive Officer
All of us here today share a strong interest in Oxy’s performance. In fact, performance is at the heart of every decision we make at Oxy.
This morning, I’m going to review the highlights of our 2006 performance and tell you about some of our current initiatives to enhance future stockholder value.
2
The Pursuit of Excellence
But first, I want to pay tribute to our management team, and our employees worldwide. Together, they provide the focus and energy that drive the company forward.
3
The Pursuit of Excellence
Their commitment to operational and financial excellence, together with their commitment to high standards of social responsibility, have not only won Oxy a lot of fans on Wall Street, but also on Main Street.
4
The Pursuit of Excellence
I want to express my personal gratitude, to our entire Board of Directors, and to all our employees for a job well done.
5
Consistent Performance
“Same old Oxy story!
Consistent, great performance.”
Wall Street Analyst
2006 was another year of record achievements. Anyone can have a good year or two, but what really attracts Wall Street’s attention is consistently strong performance over the long term.
Following a recent meeting, an analyst from an investment firm made the following remark, “Same old Oxy story. Consistent, great performance.” He went on to say that while he monitors a company’s quarterly and annual results, “what really tells the story is the trend in performance over a multi-year period.”
6
The Oxy Transition 1990–2006
Asset Mix
1990
1995
2000
2005
2006
Oil and Gas
17%
29%
72%
68%
72%
Chemicals
23%
52%
28%
31%
27%
Others
60%
19%
-
1%
1%
Total
100%
100%
100%
100%
100%
Those of you who were Oxy stockholders and employees in 1990 will remember that we had a much different mix of businesses than we have today. In 1990, oil and gas accounted for only 17 percent of our asset mix, compared to 72 percent in 2006.
These changes were the direct result of our restructuring program to replace a collection of under-performing businesses with long-lived oil and gas assets and build an excellent chemical business.
Today, Oxy is a highly focused company with two core businesses where the emphasis is on consistent performance.
Let’s look at some examples that illustrate that point.
7
The Oxy Transformation 1990–2006
Core
Results
($Millions)
191
1990
752
1995
1,361
2000
3,732
2005
4,349
2006
Core profit results, which excludes certain items, increased from $191 million in 1990 to $4.3 billion last year.
8
The Oxy Transformation 1990–2006
Debt Reduction
Including Preferred Stock
($Millions)
8,070
1990
6,941
1995
6,356
2000
3,019
2005
2,890
2006
During the same period, our total debt of $8 billion in 1990 was reduced by approximately 65 percent to less than $3 billion in 2006.
9
The Oxy Transformation 1990–2006
Stockholders’
Equity
($Billions)
4.11
1990
4.63
1995
4.77
2000
15.09
2005
19.25
2006
Stockholders’ equity grew by nearly 370 percent since 1990 to $19.2 billion at the end of last year.
10
The Oxy Transformation 1990–2006
Oil
and Gas
Production
(Thousands BOE/Day)
304
1990
401
1995
461
2000
526
2005
601
2006
Our restructuring program resulted in the timely doubling of our oil and gas production, which has allowed us to reap the benefits of strong oil prices in recent years.
11
The Oxy Transformation 1990–2006
Proved Reserves
(Billions BOE)
1.18
1990
1.34
1995
2.17
2000
2.61
2005
2.90
2006
We have met the challenge of replacing our reserves at a pace well ahead of our rising production. At the end of 2006, proved reserves were nearly two-and-one-half times those at the end of 1990.
12
The Oxy Transformation 1990–2006
Stock Price
Post Split Basis
($/Share)
9.19
1990
10.69
1995
12.13
2000
39.94
2005
48.83
2006
If you had purchased Oxy stock at $9.19 per share in 1990, the value of your investment appreciated by more than 400 percent to $48.83 per share at the end of 2006. In addition, Oxy’s cumulative dividend payments for those years totaled $8.52 per share.
13
The Oxy Transformation 1990–2006
Stock Market Value
($Millions)
5,466
1990
6,793
1995
8,972
2000
32,121
2005
41,013
2006
From 1990 through 2006, Oxy’s stock market value grew by 650 percent to $41 billion. Today, the market value exceeds $43 billion.
14
2006 Profitability
$/Barrel
of Oil
Equivalent
19.95
OXY
19.44
APC
15.86
MRO
14.89
XOM
14.88
CVX
14.07
DVN
13.75
APA
13.33
ECA
13.17
BP
11.72
COP
11.09
HES
One of the key indicators of the consistently strong performance of our oil and gas business is profitability per barrel of oil equivalent. Last year, Oxy’s profit per barrel of oil equivalent of $19.95 led our peer group for the eighth consecutive year.
15
1999 - - 2006 Profitability
8 Year Average
($/Barrel
of Oil
Equivalent)
12.11
OXY
10.25
APA
9.31
APC
9.28
ECA
9.00
COP
8.58
CVX
8.06
XOM
7.98
MRO
7.90
BP
7.78
DVN
4.98
HES
Our average profit of $12.11 per equivalent barrel over the eight years from 1999 through 2006 was 46 percent higher than the combined average of $8.31 per barrel of our competitors.
16
2006 Free Cash Flow
$/Barrel
of Oil
Equivalent
16.86
OXY
11.74
XOM
11.62
MRO
9.81
CVX
9.47
APC
8.53
COP
7.66
BP
1.75
ECA
1.71
APA
1.71
HES
1.28
DVN
Oxy also has led the industry for eight consecutive years in free cash flow per barrel. Last year, our cash flow per barrel of oil equivalent of $16.86 was 158 percent higher than our competitors’ average of $6.53.
17
1999 - - 2006 Free Cash Flow
8 Year Average
($/Barrel
of Oil
Equivalent)
11.17
OXY
7.17
MRO
7.01
COP
6.60
CVX
6.48
XOM
5.89
BP
4.61
APA
4.36
DVN
4.35
HES
2.56
APC
0.05
ECA
Oxy’s average free cash flow of $11.17 per equivalent barrel from 1999 through 2006 was 129 percent higher than the industry average of $4.91 per barrel.
Our ability to generate top quartile cash flow per barrel gives us the flexibility and financial leverage to compete successfully for new, high potential investment opportunities.
18
Core Results
$ Millions
1,003
2002
1,599
2003
2,299
2004
3,732
2005
4,349
2006
Oxy’s core profit results rose to an all-time high in 2006, more than quadrupling over the last five years.
19
Cash From Operations
$ Millions
2,100
2002
3,074
2003
3,878
2004
5,337
2005
6,353
2006
Cash flow from operations also hit an all-time high of $6.4 billion in 2006. This is the fifth consecutive year in which core profit results and operating cash flow reached new highs.
20
Debt-to-Capitalization Ratio
Percentage
43
2002
37
2003
27
2004
17
2005
13
2006
10
3/2007
We ended 2006 with the strongest balance sheet in the company’s history as total debt declined for the sixth consecutive year. At the end of last year, our debt-to-capitalization ratio was at an all-time year-end low of 13 percent.
Additional debt reduction so far this year has further reduced that ratio to 10 percent at the end of the first quarter.
21
Dividend Rate per Common Share
$/Share at Year-End
0.50
2002
0.52
2003
0.55
2004
0.72
2005
0.88
2006
Over the past five years, the Board of Directors has increased the year-end dividend payout rate by a total of 76 percent. The Board will continue to review the dividend policy annually as part of our commitment to produce superior total returns for our stockholders.
22
Stockholders’ Equity
$ Billions
6.32
2002
7.97
2003
10.60
2004
15.09
2005
19.25
2006
Stockholders’ equity also reached new highs in each of the last five years, rising to $19.2 billion at the end of 2006. That’s an increase of more than 241 percent since the beginning of 2002.
23
Oxy Year-End Closing Stock Price
$/Share
8.44
1998
10.81
1999
12.13
2000
13.27
2001
14.23
2002
21.12
2003
29.18
2004
39.94
2005
48.83
2006
The most important measure of performance is our stock price. Our 2006 year-end closing stock price of $48.83 per share, after adjusting for our two-for-one stock split last August, was the highest year-end stock price in Oxy’s history. That was 22 percent higher than the previous record of $39.94 set in 2005.
24
Comparative Total Returns
Oxy
S&P 500 E&P Oil & Gas
S&P 500 Integrated Oil Gas
S&P 500
$500
$400
$300
$200
$100
$0
2001
2002
2003
2004
2005
2006
$415
$295
$225
$135
This chart compares Oxy’s cumulative total return to stockholders with the cumulative total return of the Oil & Gas Exploration & Production Index, the Integrated Oil & Gas Index and the overall S&P 500 Index.
If you invested $100 in Oxy stock at year-end 2001, the value of your investment would have grown to $415 by the end of 2006.
A $100 investment in the Exploration & Production Index would have resulted in a return of $295.
By comparison, your $100 investment in the Integrated Oil Index would have yielded $225 over the same period.
And, if you had invested $100 in the overall S&P 500 Index, your investment would have been worth only $135 after the same five years.
25
Maintain Strategic Focus
Stay focused on the future
Create superior value for stockholders
Deliver on key metrics
Stick with current strategy
Balance profits with growth
While all of us can take pride in our past achievements, our focus must be on the future.
We believe that we will continue creating superior value for our stockholders by sticking with our business strategy of balancing profitability with growth, and remaining focused on the key metrics that drive our business.
Our consistent improvement over the years clearly shows that we have had the right strategy in place and a strong team to make it work.
We believe continued focus on balancing profits with growth will enable us to keep delivering the kind of strong, consistent results that you expect of us.
26
Worldwide Oil and Gas
Oxy Areas
California
Colombia
Libya
Kansas/Oklahoma
Texas/New Mexico
Argentina
Oman
Yemen
Qatar
UAE
The key to our oil and gas strategy is concentrating on geographic areas where we have competitive advantages. Right now, that means the United States, the Middle East/North Africa region and Latin America.
Our assets are large and long-lived, and we expect to see combined production from these core areas grow at a compounded annual growth rate of 5 to 8 percent through 2010.
27
U.S. Operations
California
New
Mexico
Colorado
Kansas
Oklahoma
Texas
2006 net production
367,000 equivalent barrels/day
61% of worldwide total
Oxy Blocks
Last year, U.S. production averaged 367,000 barrels of oil equivalent per day, which was 61 percent of our total worldwide production. The yellow areas show the location of Oxy properties in California, Colorado, Kansas, New Mexico, Oklahoma, and Texas.
As we continue to grow our international business, one of our goals is to maintain a strong U.S. base that will account for a minimum of 50 percent of our worldwide reserves and production. A dominant U.S. base gives Oxy a lower risk profile than other international oil and gas companies.
28
California Operations
California
Elk Hills
THUMS
Los Angeles
2006 net production
129,000
equivalent
barrels/day
21% of worldwide total
As you can see, we have a significant presence in California where our production averaged 129,000 equivalent barrels per day last year. In 2006, California contributed 21 percent of our worldwide production. As we look ahead in 2007 and beyond, we plan to aggressively pursue the exploitation of the California properties we acquired last year.
29
Texas / New Mexico Operations
New
Mexico
Oklahoma
Texas
Permian
Basin
2006 net production
199,000 equivalent barrels/day
33% of worldwide total
Oxy Blocks
Last year, our Texas and New Mexico operations produced an average of 199,000 equivalent barrels per day, which is about one-third of our daily worldwide production.
We have repeatedly stressed our intentions to continue with our consolidation initiatives in the Permian Basin, in Texas, and New Mexico. As you can see from the oil and gas producing properties highlighted in the box, we have a strong position in the Permian Basin.
Our size and infrastructure in Texas and New Mexico give us significant economies of scale, and make us a natural regional consolidator.
30
BP Transactions
New
Mexico
Oklahoma
Texas
Permian
Basin
Consistent with our strategy of focusing on core areas, we just announced several transactions with BP.
First, Oxy will acquire BP’s West Texas pipeline system in the Permian Basin and BP will acquire Oxy’s interests in Pakistan, currently operated by BP.
31
BP Transactions
New
Mexico
Oklahoma
Texas
Permian
Basin
BP Locations
Oxy Blocks
Second, in an asset exchange with BP, Oxy will receive certain of BP’s oil and gas interests in the Permian Basin and BP’s interest in the Sheep Mountain CO2 field and related infrastructure. BP will receive Oxy’s Horn Mountain interest in the deepwater Gulf of Mexico, currently operated by BP. Of course, these transactions are subject to government approvals.
When these transactions close in the third quarter, they will further strengthen Oxy’s industry-leading position in Texas by adding net production of approximately 8,000 equivalent barrels per day and proved reserves of 39 million equivalent barrels.
32
BP Transactions
New
Mexico
Oklahoma
Texas
Permian
Basin
Cushing
BP Locations
BP Pipelines
Oxy’s Centurion Pipelines
Oxy Blocks
Furthermore, the addition of the new pipelines to our current Permian pipeline assets, as shown in blue on this chart, will give us a total of 3,844 miles of pipelines in the region with a capacity to transport approximately 190,000 barrels of oil per day from the Permian Basin to the market center at Cushing, Oklahoma.
The Sheep Mountain property in Colorado will strengthen Oxy’s position as a leader in CO2 enhanced oil recovery in the Permian.
33
Middle
East and North Africa
Operations
Libya
Qatar
UAE
2006 net production
119,000 equivalent barrels/day
20% of worldwide total
Let’s now turn to our operations in the Middle East and North Africa.
In 2006, Oxy’s net production from this region totaled 119,000 equivalent barrels per day and accounted for 20 percent of our worldwide total.
Production from this region is going to increase significantly this year with the start up of the giant Dolphin natural gas project.
34
Dolphin Operations
Export Line
Sea Lines
Existing Lines
Dolphin
Al Ain-Fujairah
Line
Qatar
Ras
Laffan
United Arab Emirates
Doha
Abu Dhabi
Dubai
Arabian Gulf
The Dolphin Project is one of the largest projects of its kind in the world.
The gas will be produced from the world’s largest natural gas field offshore Qatar. It will be transported to the processing plant at Ras Laffan in Qatar, which is one of the largest facilities of its kind.
The 230-mile long pipeline has been fully tested. Currently, about 300 million cubic feet per day of gas supplied by a third-party is moving through the pipeline to markets in Dubai. We expect Dolphin gas to begin flowing to the market in July, with full-scale production building to an initial two billion cubic feet per day around year-end. To give you a perspective of this volume, it is about equal to a third of the average daily natural gas used in all of California.
And, I would like to remind everyone that this project should generate a steady stream of cash and earnings for the next 25 years.
35
New Middle East Proposals
Libya
Qatar
UAE
In addition, as you may have read in the press, we have recently submitted proposals for the development of two major gas fields in the United Arab Emirates. Abu Dhabi has the fifth largest gas reserves in the world. This project has been reported to require an estimated total future capital investment of $10 billion with production estimated at well over a billion cubic feet per day for 25 to 30 years.
We are also in the advanced stages of negotiations on other large oil and gas development projects in our core Middle East/North Africa region.
36
Oman Operations
Yemen
Arabian Gulf
Saudi Arabia
Mukhaizna
Field
Block 54
Block 9
Block
27
Arabian Sea
Gulf
of
Oman
Muscat
Salalah
Oman
Oxy Blocks
2006 net production
23,000
equivalent
barrels/day
Mukhaizna Field
Gross investment
$3.8 billion
Increase
gross production
to 150,000 barrels/day
Oxy 2007 investment
$400-$450 million
In Oman, we have laid a strong foundation for future growth that has been built around our operations in Blocks 9 and 27 in the northern part of the country. Oxy’s 2006 net production from Oman averaged 23,000 equivalent barrels per day.
In September 2005, the Government of Oman awarded Oxy a contract to operate the giant Mukhaizna heavy oil field.
Along with our partners, we plan to invest approximately $3.8 billion to increase Mukhaizna’s gross production, which is currently averaging about 11,000 barrels per day to 150,000 barrels per day within the next few years.
Work on the Mukhaizna field remains on track. This year, Oxy expects to invest between $400 and $450 million in this important project.
In 2006, we were awarded Block 54. This exploration Block has characteristics similar to the adjacent Mukhaizna field.
37
Libya Operations
Algeria
Niger
Chad
Sudan
Egypt
Tunisia
Libya
Tripoli
Benghazi
Mediterranean Sea
Oxy Blocks
Oxy acreage position
30 million acres
2006 net production
23,000
equivalent
barrels/day
2007 exploration
Drill 14-16 wells
10-12 onshore
We are excited about the opportunities in Libya where we control approximately 30 million acres. If you consolidated all of these blocks, you would fill a portion of Texas larger than the Permian Basin.
Last year, production from our historic fields averaged 23,000 barrels of oil per day. But our real excitement surrounds Libya’s exploration potentials. We plan to drill between 14 and 16 exploration wells this year with 10 to 12 wells onshore and the remaining 4 wells offshore. This effort is the most extensive exploration initiative in Oxy’s history, and we are impressed with the quality of the prospects.
We also have begun commercial negotiations with Libyan officials for a large enhanced oil recovery project following a favorable review of our comprehensive technical proposal.
38
Latin America Operations
Argentina
Colombia
Oxy Blocks
2006 net production
72,000
equivalent
barrels/day
12% of worldwide total
Let’s now turn to Latin America where our primary focus is on operations in Argentina and Colombia. As you all know, Latin America has been experiencing a great deal of political turmoil and social unrest during the last several years. However, Colombia and Argentina have two of the most stable governments in the region.
Last year, our operations in Argentina and Colombia accounted for combined average production of 72,000 equivalent barrels per day net to Oxy, or about 12 percent of our worldwide total.
39
Colombia Operations
Peru
Colombia
Ecuador
Brazil
Venezuela
Coveñas
La Cira Infantes
Caño
Limón
2006 net production
33,000
equivalent
barrels/day
Caño
Limón decline
substantially offset
La Cira Infantas Field
Oxy Blocks
In Colombia, we have been able to substantially offset declining production at the Caño Limón field through skillful reservoir management and modest exploration success in adjacent fields. Oxy’s net 2006 production from Colombia averaged 33,000 barrels per day.
Last year, we successfully completed an enhanced oil recovery pilot project at the La Cira Infantas field. We are currently implementing an aggressive development program for the entire field.
40
Argentina Operations
San Jorge Basin
Cuyo Basin
Neuquen Basin
Argentina
Uruguay
Brazil
2006 net production
36,000
equivalent
barrels/day
Identified 700 drilling sites
Drill 190 new wells in 2007
2011 net production target
70,000 barrels/day
Oxy Blocks
Our Argentina assets, which we acquired in January 2006, contributed net production of 36,000 equivalent barrels per day.
We have identified at least 700 new drilling locations targeting proved, undeveloped reserves. We plan to drill 190 new wells this year, and carry out an aggressive drilling program for at least the next five years.
During that period, we expect to increase production to approximately 70,000 barrels per day.
41
Chemicals Profit Margins
2006 Operating Profits
as Percent of Sales
OxyChem
18.7
4.7
7.8
9.6
12.6
4.9
6.4
9.0
7.1
11.5
14.0
13.4
13.0
Let’s turn briefly to our chemical business, which compares favorably with our chemical industry peers.
Like our oil and gas operations, our chemical business is focused on optimizing profitability and cash flow from large core assets where we have economies of scale. We aggressively manage our costs and maintain a disciplined capital spending program.
As a result, OxyChem’s 2006 operating profit as a percent of sales is the highest among our chemical industry peers. OxyChem’s profit margin of 18.7 percent was nearly double the average profit margin of 10.2 percent for our competitors.
42
Chemicals
Operations Free Cash
Flow
$ Millions
245
2002
305
2003
505
2004
855
2005
910
2006
We are particularly pleased that our chemical business consistently generates strong cash flow in excess of its capital expenditures. Last year this business had excellent performance and generated more than $900 million of cash after capital expenditures.
43
“Buy” Oxy Stock
A.G. Edwards
Buy
Bank of America
Buy
Citigroup
Buy
Credit Suisse
Buy
Deutsche Bank
Buy
Goldman Sachs
Buy
Howard Weil
Buy
Merrill Lynch
Buy
Oppenheimer & Co.
Buy
Prudential
Buy
Raymond James
Buy
Simmons & Co.
Buy
UBS
Buy
Wall Street Access
Buy
Throughout this presentation you have seen clear evidence of Oxy’s consistently strong performance that has attracted the attention of the financial community.
We are pleased to share with you that 14 influential research analysts, who represent highly respected investment firms, currently have a “buy” recommendation on Oxy stock.
These endorsements represent votes of confidence in Oxy’s ability to continue delivering strong results in the future.
44
Recognition
“Today’s
CFOs must keep one eye on the big
picture and the other on the smallest details.
Here are the CFOs with the sharpest vision . . .”
Steve Chazen
Top Ranked
Oil
& Gas Industry
CFO
There is other evidence that speaks to Oxy’s credibility with investors. Earlier this year, Institutional Investor Magazine ranked Steve Chazen as the top chief financial officer in the oil and gas industry for the fourth consecutive year. The ranking was based on a survey of more than 800 financial analysts and portfolio managers representing 400 firms with total investments of $6.3 trillion dollars. Steve, the recognition is well-deserved.
45
Looking Ahead
Capture new growth opportunities
Improve quality and performance of the assets
Optimize profits and cash flow per barrel
Aggressively manage costs
Add cost-effective reserves and grow production
Maintain financial discipline
Remain focused on top quartile total returns
While we are pleased with our progress, we have a lot of work ahead of us in capturing new growth opportunities. World energy demand continues to grow rapidly. With little excess capacity, energy prices are likely to remain high and volatile. We expect to excel in this environment and to capture new growth opportunities.
We plan to continue improving the quality and performance of our assets. We will work to optimize our profits per barrel. We plan to aggressively manage our costs. We expect to keep adding cost-effective reserves and grow production. We will maintain financial discipline. And, we will remain focused on generating top quartile total returns for our stockholders.
I would now like to introduce Dr. Larry Meriage, who will present our social responsibility report. This will be the last time he will present this report. He is retiring later this year after 27 years with Oxy. For the past 7 years, he has served as our vice president of communications and public affairs. Larry, I want to thank you personally for your outstanding work, dedication and service to the company. And I wish you well as you go off to “live the good life.”
46
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Occidental Petroleum Corporation: Core Results |
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|
|
1995 |
|
|
2000 |
|
|
2002 |
|
|
2003 |
|
|
2004 |
|
|
2005 |
|
|
2006 |
|
|
|
Net Income |
|
|
(1,695 |
) |
|
511 |
|
|
1,570 |
|
|
989 |
|
|
1,527 |
|
|
2,568 |
|
|
5,281 |
|
|
4,182 |
|
|
|
Significant Items Affecting Earnings |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil and Gas |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring / reorganization charges |
|
|
(535 |
) |
* |
(95 |
) |
* |
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
|
Litigation settlements |
|
|
- |
|
|
(109 |
) |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
|
Contract settlement |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
(26 |
) |
|
- |
|
|
|
Hurricane insurance charge |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
(18 |
) |
|
- |
|
|
|
Chemical |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring / reorganization charges |
|
|
(848 |
) |
* |
(37 |
) |
* |
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
|
Specialty write-downs |
|
|
- |
|
|
- |
|
|
(140 |
) |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
|
Write-off of plants |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
(159 |
) |
|
- |
|
|
|
Hurricane insurance charge |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
(11 |
) |
|
- |
|
|
|
Coal |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring / reorganization charges |
|
|
(300 |
) |
* |
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
|
Corporate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt purchase expense |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
(61 |
) |
|
- |
|
|
(42 |
) |
|
(31 |
) |
|
|
Trust preferred redemption charge |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
(11 |
) |
|
- |
|
|
- |
|
|
|
Other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on sale of CanOxy |
|
|
- |
|
|
- |
|
|
493 |
|
|
- |
|
|
- |
|
|
- |
|
|
726 |
|
|
- |
|
|
|
Gain on sale of Premcor/Valero |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
|
Gain on sale of Lyondell |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
140 |
|
|
90 |
|
|
|
Gain on Lyondell stock issuance |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
121 |
|
|
- |
|
|
- |
|
|
|
Loss on sale of Equistar investment |
|
|
- |
|
|
- |
|
|
- |
|
|
(242 |
) |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
|
Restructuring / reorganization charges |
|
|
(363 |
) |
* |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hurricane insurance charge |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
(15 |
) |
|
(10 |
) |
|
- |
|
|
|
Litigation settlements |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
|
Equity investment hurricane insurance charge |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
(2 |
) |
|
- |
|
|
|
Equity investment impairment |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
(15 |
) |
|
- |
|
|
|
Litigation settlements |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
108 |
|
|
|
Taxes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred tax write-off due to compensation program changes |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
(40 |
) |
|
|
State tax issue |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
(10 |
) |
|
- |
|
|
|
Settlement of federal tax issues |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
47 |
|
|
619 |
|
|
- |
|
|
|
Tax reserve reversals |
|
|
167 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
335 |
|
|
- |
|
|
|
Tax effect of pre-tax adjustments |
|
|
- |
|
|
- |
|
|
(145 |
) |
|
406 |
|
|
21 |
|
|
(35 |
) |
|
(219 |
) |
|
(41 |
) |
|
|
Discontinued operations |
|
|
- |
|
|
- |
|
|
- |
|
|
(83 |
) |
* |
36 |
|
* |
162 |
|
* |
238 |
|
* |
(253 |
) |
* |
|
Extraordinary items |
|
|
(7 |
) |
* |
- |
|
|
1 |
|
* |
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
|
Cumulative effect of accounting changes |
|
|
- |
|
|
- |
|
|
- |
|
|
(95 |
) |
* |
(68 |
) |
* |
- |
|
|
3 |
|
* |
- |
|
|
|
Totals |
|
|
(1,886 |
) |
|
(241 |
) |
|
209 |
|
|
(14 |
) |
|
(72 |
) |
|
269 |
|
|
1,549 |
|
|
(167 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core Results |
|
|
191 |
|
|
752 |
|
|
1,361 |
|
|
1,003 |
|
|
1,599 |
|
|
2,299 |
|
|
3,732 |
|
|
4,349 |
|
|
* Amounts shown after tax
|
Oil & Gas: Profitability | |||||||||
|
Reconciliation to Generally Accepted Accounting Principles (GAAP) | |||||||||
|
( Millions, except $/BOE) | |||||||||
|
For the Year Ended December 31, 2006 | |||||||||
|
|
|
Consolidated |
|
Other |
|
|
| ||
|
Reconciliation to Generally Accepted Accounting Principles (GAAP) |
|
Subsidiaries |
|
Interests |
|
Worldwide | |||
|
Revenues |
|
$ |
12,256 |
|
$ |
223 |
|
$ |
12,479 |
|
Production costs |
|
|
2,365 |
|
|
149 |
|
|
2,514 |
|
Exploration expenses |
|
|
295 |
|
|
1 |
|
|
296 |
|
Other operating expenses |
|
|
600 |
|
|
8 |
|
|
608 |
|
DD&A |
|
|
1,761 |
|
|
10 |
|
|
1,771 |
|
Pre-tax income |
|
|
7,235 |
|
|
55 |
|
|
7,290 |
|
Income tax expense |
|
|
2,911 |
|
|
11 |
|
|
2,922 |
|
Results of operations |
|
$ |
4,324 |
|
$ |
44 |
|
$ |
4,368 |
|
BOE Sales |
|
|
|
|
|
|
|
|
219 |
|
Revenues |
|
|
|
|
|
|
|
|
56.98 |
|
Production costs |
|
|
|
|
|
|
|
|
11.48 |
|
Exploration expenses |
|
|
|
|
|
|
|
|
1.35 |
|
Other operating expenses |
|
|
|
|
|
|
|
|
2.78 |
|
DD&A |
|
|
|
|
|
|
|
|
8.09 |
|
Pre-tax income |
|
|
|
|
|
|
|
|
33.29 |
|
Income tax expense |
|
|
|
|
|
|
|
|
13.34 |
|
Results of operations |
|
|
|
|
|
|
|
|
19.95 |
|
Oil & Gas: Profitability | |||||||||||||||||||
|
Reconciliation to Generally Accepted Accounting Principles (GAAP) | |||||||||||||||||||
|
( Millions, except $/BOE) | |||||||||||||||||||
|
Average For the Eight Years Ended December 31, 1999 - 2006 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8-Year | |
|
|
1999 |
2000 |
2001 |
2002 |
2003 |
2004 |
2005 |
2006 |
|
Average | |||||||||
|
Revenues |
$ |
2,503 |
|
3,990 |
|
5,019 |
|
4,461 |
|
5,875 |
|
7,500 |
|
10,355 |
$ |
12,479 |
|
$ |
6,523 |
|
Production costs |
|
452 |
|
785 |
|
1,031 |
|
1,064 |
|
1,225 |
|
1,497 |
|
1,927 |
|
2,514 |
|
|
1,312 |
|
Exploration expenses |
|
75 |
|
94 |
|
184 |
|
176 |
|
138 |
|
215 |
|
335 |
|
296 |
|
|
189 |
|
Other operating expenses |
|
170 |
|
215 |
|
215 |
|
222 |
|
344 |
|
398 |
|
502 |
|
608 |
|
|
334 |
|
DD&A |
|
598 |
|
661 |
|
739 |
|
819 |
|
971 |
|
1,052 |
|
1,224 |
|
1,771 |
|
|
979 |
|
Pre-tax income |
|
1,208 |
|
2,235 |
|
2,850 |
|
2,180 |
|
3,197 |
|
4,338 |
|
6,367 |
|
7,290 |
|
|
3,708 |
|
Income tax expense |
|
366 |
|
1,051 |
|
1,006 |
|
718 |
|
1,129 |
|
1,507 |
|
2,341 |
|
2,922 |
|
|
1,380 |
|
Results of operations |
$ |
842 |
$ |
1,184 |
$ |
1,844 |
$ |
1,462 |
$ |
2,068 |
$ |
2,831 |
$ |
4,026 |
$ |
4,368 |
|
$ |
2,328 |
|
BOE Sales |
|
156 |
|
174 |
|
181 |
|
192 |
|
202 |
|
207 |
|
207 |
|
219 |
|
|
192 |
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
33.94 |
|
Production costs |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6.83 |
|
Exploration expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.98 |
|
Other operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1.74 |
|
DD&A |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5.10 |
|
Pre-tax income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19.29 |
|
Income tax expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7.18 |
|
Results of operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12.11 |
|
Oil & Gas: Cash Flow | ||||||||||||
|
($ Millions, except $/BOE) | ||||||||||||
|
GAAP Reconciliation | ||||||||||||
|
Reconciliation to Generally Accepted Accounting Principles (GAAP) |
|
|
|
|
|
|
2006 | |||||
|
Occidental Petroleum Consolidated Statement of Cash Flows |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flow from operating activities |
|
|
|
|
|
|
|
|
|
$ |
6,353 |
|
|
Cash flow from investing activities |
|
|
|
|
|
|
|
|
|
|
(4,383 |
) |
|
Cash flow from financing activities |
|
|
|
|
|
|
|
|
|
|
(2,819 |
) |
|
Change in cash |
|
|
|
|
|
|
|
|
|
$ |
(849 |
) |
|
|
|
Consolidated |
|
Other |
|
|
|
| ||||
|
|
|
Subsidiaries |
|
Interests |
|
Worldwide | ||||||
|
FAS 69 GAAP Oil & Gas results of operations |
|
$ |
4,324 |
|
|
$ |
44 |
|
|
$ |
4,368 |
|
|
Depreciation, depletion & amortization |
|
|
1,761 |
|
|
|
10 |
|
|
|
1,771 |
|
|
Exploration expense |
|
|
295 |
|
|
|
1 |
|
|
|
296 |
|
|
Capital expenditures (excluding acquisitions) |
|
|
(2,709 |
) |
|
|
(33 |
) |
|
|
(2,742 |
) |
|
Cash flow from operations |
|
$ |
3,671 |
|
|
$ |
22 |
|
|
$ |
3,693 |
|
|
Sales volumes (million BOE) |
|
|
|
|
|
|
|
|
|
|
219 |
|
|
Cash flow per BOE |
|
|
|
|
|
|
|
|
|
$ |
16.86 |
|
|
Oil & Gas: Cash Flow | ||||||||||||||||||||||||||||
|
Reconciliation to Generally Accepted Accounting Principles (GAAP) | ||||||||||||||||||||||||||||
|
( Millions, except $/BOE) | ||||||||||||||||||||||||||||
|
Average For the Eight Years Ended December 31, 1999 - 2006 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8-Year | ||
|
|
1999 |
2000 |
2001 |
2002 |
2003 |
2004 |
2005 |
2006 |
|
Average | ||||||||||||||||||
|
Occidental Petroleum Consolidated Statement of Cash Flows |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flow from operating activities |
|
1,004 |
|
|
2,348 |
|
|
2,566 |
|
|
2,100 |
|
|
3,074 |
|
|
3,878 |
|
|
5,337 |
|
|
6,353 |
|
|
|
|
|
|
Cash flow from investing activities |
|
1,632 |
|
|
(3,044 |
) |
|
(651 |
) |
|
(1,696 |
) |
|
(2,131 |
) |
|
(2,428 |
) |
|
(3,161 |
) |
|
(4,383 |
) |
|
|
|
|
|
Cash flow from financing activities |
|
(2,517 |
) |
|
579 |
|
|
(1,814 |
) |
|
(461 |
) |
|
(513 |
) |
|
(821 |
) |
|
(1,187 |
) |
|
(2,819 |
) |
|
|
|
|
|
Change in cash |
$ |
119 |
|
$ |
(117 |
) |
$ |
101 |
|
$ |
(57 |
) |
$ |
430 |
|
$ |
629 |
|
$ |
989 |
|
$ |
(849 |
) |
|
|
|
|
|
FAS 69 GAAP Oil & Gas results of operations |
$ |
842 |
|
$ |
1,184 |
|
$ |
1,844 |
|
$ |
1,462 |
|
$ |
2,068 |
|
$ |
2,831 |
|
$ |
4,026 |
|
$ |
4,368 |
|
|
$ |
2,328 |
|
|
Depreciation, depletion & amortization |
|
598 |
|
|
661 |
|
|
739 |
|
|
819 |
|
|
971 |
|
|
1,052 |
|
|
1,224 |
|
|
1,771 |
|
|
|
979 |
|
|
Exploration expense |
|
75 |
|
|
94 |
|
|
184 |
|
|
176 |
|
|
138 |
|
|
215 |
|
|
335 |
|
|
296 |
|
|
|
189 |
|
|
Capital expenditures (excluding acquisitions) |
|
(405 |
) |
|
(713 |
) |
|
(1,089 |
) |
|
(930 |
) |
|
(1,127 |
) |
|
(1,607 |
) |
|
(2,190 |
) |
|
(2,742 |
) |
|
|
(1,350 |
) |
|
Cash flow from operations |
$ |
1,110 |
|
$ |
1,226 |
|
$ |
1,678 |
|
$ |
1,527 |
|
$ |
2,050 |
|
$ |
2,491 |
|
$ |
3,395 |
|
$ |
3,693 |
|
|
$ |
2,146 |
|
|
BOE Sales |
|
156 |
|
|
174 |
|
|
181 |
|
|
192 |
|
|
202 |
|
|
207 |
|
|
207 |
|
|
219 |
|
|
|
192 |
|
|
Cash flow per BOE |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
11.17 |
|
|
The computation of cash flow per BOE included in the denominator 2.1mmboe, 4.2 mmboe, 7.8 mmboe and 5.7 mmboe produced by Occidental that were subject to | ||||||||||||||||||||||||||||
|
volumetric production payments for the years 2003, 2002, 2001 and 2000, respectively. | ||||||||||||||||||||||||||||
|
Occidental Petroleum Corporation | ||||||||||||||||||
|
Reconciliation to Generally Accepted Accounting Principles (GAAP) | ||||||||||||||||||
|
Debt / Capitalization Ratio | ||||||||||||||||||
|
Expressed in $ Millions except Ratios | ||||||||||||||||||
|
Current Maturities |
|
31-Dec-02 |
|
31-Dec-03 |
|
31-Dec-04 |
|
31-Dec-05 |
|
31-Dec-06 |
|
31-Mar-07 | ||||||
|
Long-term debt |
|
206 |
|
|
23 |
|
|
459 |
|
|
46 |
|
|
171 |
|
|
449 |
|
|
Trust preferred securities |
|
- |
|
|
453 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
|
|
206 |
|
|
476 |
|
|
459 |
|
|
46 |
|
|
171 |
|
|
449 |
|
|
Non-current Debt |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt |
|
4,005 |
|
|
4,000 |
|
|
3,351 |
|
|
2,877 |
|
|
2,621 |
|
|
1,692 |
|
|
Unamortized debt discount |
|
(8 |
) |
|
(7 |
) |
|
(6 |
) |
|
(4 |
) |
|
(2 |
) |
|
(1 |
) |
|
|
|
3,997 |
|
|
3,993 |
|
|
3,345 |
|
|
2,873 |
|
|
2,619 |
|
|
1,691 |
|
|
Capital lease obligations |
|
26 |
|
|
26 |
|
|
26 |
|
|
25 |
|
|
25 |
|
|
25 |
|
|
Subsidiary preferred stock |
|
75 |
|
|
75 |
|
|
75 |
|
|
75 |
|
|
75 |
|
|
75 |
|
|
Trust preferred securities |
|
455 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
DEBT |
|
4,759 |
|
|
4,570 |
|
|
3,905 |
|
|
3,019 |
|
|
2,890 |
|
|
2,240 |
|
|
Capitalization |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt (above) |
|
4,759 |
|
|
4,570 |
|
|
3,905 |
|
|
3,019 |
|
|
2,890 |
|
|
2,240 |
|
|
Equity |
|
6,318 |
|
|
7,970 |
|
|
10,597 |
|
|
15,091 |
|
|
19,252 |
|
|
20,217 |
|
|
CAPITALIZATION |
|
11,077 |
|
|
12,540 |
|
|
14,502 |
|
|
18,110 |
|
|
22,142 |
|
|
22,457 |
|
|
RATIO |
|
43% |
|
37% |
|
27% |
|
17% |
|
13% |
|
10% | ||||||
|
Chemical - Percent of Sales | ||||||||
|
Reconciliation to Generally Accepted Accounting Principles (GAAP) | ||||||||
|
For the Year Ended December 31, 2006 | ||||||||
|
Amounts in $ Millions Except % of Sales | ||||||||
|
Sales |
|
|
|
|
|
|
|
|
|
Oil and Gas |
|
|
12,676 |
|
|
|
|
|
|
Chemical |
|
|
4,815 |
|
|
|
|
|
|
Other |
|
|
170 |
|
|
|
|
|
|
|
|
|
17,661 |
|
|
|
|
|
|
Chemicals |
|
|
$ AMT |
|
|
|
% of Sales |
|
|
Segment income |
|
|
901 |
|
|
|
|
|
|
Less: significant items affecting earnings |
|
|
|
|
|
|
|
|
|
None |
|
|
- |
|
|
|
|
|
|
Core earnings |
|
|
901 |
|
|
18.7% | ||
|
Chemicals Free Cash Flow |
|
| ||||||||
|
Reconciliation to Generally Accepted Accounting Principles (GAAP) |
|
| ||||||||
|
($ Millions) |
|
| ||||||||
|
|
2002 |
2003 |
2004 |
2005 |
2006 | |||||
|
Occidental Petroleum Consolidated Statement of Cash Flows |
|
|
|
|
|
|
|
|
|
|
|
Cash flow from operating activities |
2,100 |
|
3,074 |
|
3,878 |
|
5,337 |
|
6,353 |
|
|
Cash flow from investing activities |
(1,696 |
) |
(2,131 |
) |
(2,428 |
) |
(3,161 |
) |
(4,383 |
) |
|
Cash flow from financing activities |
(461 |
) |
(513 |
) |
(821 |
) |
(1,187 |
) |
(2,819 |
) |
|
Change in cash |
(57 |
) |
430 |
|
629 |
|
989 |
|
(849 |
) |
|
Chemicals Free Cash Flow |
|
|
|
|
|
|
|
|
|
|
|
Core earnings |
175 |
|
225 |
|
415 |
|
775 |
|
901 |
|
|
Depreciation & amortization expense |
180 |
|
203 |
|
243 |
|
251 |
|
260 |
|
|
Working capital and other |
(3 |
) |
(3 |
) |
2 |
|
2 |
|
- |
|
|
Capital expenditures (excluding acquisitions) |
(107 |
) |
(120 |
) |
(155 |
) |
(173 |
) |
(251 |
) |
|
Free cash flow |
245 |
|
305 |
|
505 |
|
855 |
|
910 |
|
|
Segment income |
175 |
|
225 |
|
415 |
|
605 |
|
901 |
|
|
Less: significant items affecting earnings |
|
|
|
|
|
|
|
|
|
|
|
Hurricane insurance charges |
- |
|
- |
|
- |
|
11 |
|
- |
|
|
Write-off of plants |
- |
|
- |
|
- |
|
159 |
|
- |
|
|
Core results |
175 |
|
225 |
|
415 |
|
775 |
|
901 |
|
Occidental Petroleum Corporation
Proved Reserves
|
|
Consolidated Subsidiaries |
|
Other Interests |
|
Worldwide | |||||||||||||||
|
|
Oil |
Gas |
BOE |
|
Oil |
Gas |
BOE |
|
Oil |
Gas |
BOE | |||||||||
|
Balance at Dec. 31, 2001 |
1,767 |
|
2,068 |
|
2,112 |
|
|
44 |
|
- |
|
44 |
|
|
1,811 |
|
2,068 |
|
2,156 |
|
|
Revisions of previous estimates |
1 |
|
(54 |
) |
(8 |
) |
|
(1 |
) |
- |
|
(1 |
) |
|
- |
|
(54 |
) |
(9 |
) |
|
Improved recovery |
112 |
|
151 |
|
137 |
|
|
5 |
|
- |
|
5 |
|
|
117 |
|
151 |
|
142 |
|
|
Extensions & discoveries |
29 |
|
60 |
|
39 |
|
|
- |
|
- |
|
- |
|
|
29 |
|
60 |
|
39 |
|
|
Purchases of proved reserves |
56 |
|
59 |
|
66 |
|
|
2 |
|
- |
|
2 |
|
|
58 |
|
59 |
|
68 |
|
|
Sales of proved reserves |
(4 |
) |
(6 |
) |
(5 |
) |
|
- |
|
- |
|
- |
|
|
(4 |
) |
(6 |
) |
(5 |
) |
|
Current year production |
(137 |
) |
(229 |
) |
(175 |
) |
|
(8 |
) |
- |
|
(8 |
) |
|
(145 |
) |
(229 |
) |
(183 |
) |
|
Balance at Dec. 31, 2002 |
1,824 |
|
2,049 |
|
2,166 |
|
|
42 |
|
- |
|
42 |
|
|
1,866 |
|
2,049 |
|
2,208 |
|
|
Revisions of previous estimates |
(1 |
) |
44 |
|
6 |
|
|
6 |
|
- |
|
6 |
|
|
5 |
|
44 |
|
12 |
|
|
Improved recovery |
85 |
|
70 |
|
97 |
|
|
4 |
|
9 |
|
6 |
|
|
89 |
|
79 |
|
102 |
|
|
Extensions & discoveries |
30 |
|
597 |
|
130 |
|
|
6 |
|
- |
|
6 |
|
|
36 |
|
597 |
|
136 |
|
|
Purchases of proved reserves |
98 |
|
55 |
|
107 |
|
|
- |
|
- |
|
- |
|
|
98 |
|
55 |
|
107 |
|
|
Sales of proved reserves |
(8 |
) |
(9 |
) |
(9 |
) |
|
- |
|
- |
|
- |
|
|
(8 |
) |
(9 |
) |
(9 |
) |
|
Current year production |
(144 |
) |
(221 |
) |
(181 |
) |
|
(10 |
) |
- |
|
(10 |
) |
|
(154 |
) |
(221 |
) |
(191 |
) |
|
Balance at Dec. 31, 2003 |
1,884 |
|
2,585 |
|
2,316 |
|
|
48 |
|
9 |
|
50 |
|
|
1,932 |
|
2,594 |
|
2,365 |
|
|
Revisions of previous estimates |
8 |
|
241 |
|
48 |
|
|
5 |
|
(9 |
) |
3 |
|
|
13 |
|
232 |
|
51 |
|
|
Improved recovery |
88 |
|
185 |
|
120 |
|
|
1 |
|
- |
|
1 |
|
|
89 |
|
185 |
|
121 |
|
|
Extensions & discoveries |
12 |
|
191 |
|
43 |
|
|
2 |
|
- |
|
2 |
|
|
14 |
|
191 |
|
45 |
|
|
Purchases of proved reserves |
39 |
|
7 |
|
40 |
|
|
(4 |
) |
- |
|
(4 |
) |
|
35 |
|
7 |
|
36 |
|
|
Sales of proved reserves |
- |
|
(1 |
) |
(0 |
) |
|
- |
|
- |
|
- |
|
|
- |
|
(1 |
) |
(0 |
) |
|
Current year production |
(142 |
) |
(233 |
) |
(181 |
) |
|
(9 |
) |
- |
|
(9 |
) |
|
(151 |
) |
(233 |
) |
(190 |
) |
|
Balance at Dec. 31, 2004 |
1,889 |
|
2,975 |
|
2,386 |
|
|
43 |
|
- |
|
43 |
|
|
1,932 |
|
2,975 |
|
2,428 |
|
|
Revisions of previous estimates |
(18 |
) |
30 |
|
(13 |
) |
|
8 |
|
6 |
|
9 |
|
|
(10 |
) |
36 |
|
(4 |
) |
|
Improved recovery |
107 |
|
131 |
|
129 |
|
|
- |
|
- |
|
- |
|
|
107 |
|
131 |
|
129 |
|
|
Extensions & discoveries |
46 |
|
427 |
|
117 |
|
|
1 |
|
- |
|
1 |
|
|
47 |
|
427 |
|
118 |
|
|
Purchases of proved reserves |
112 |
|
164 |
|
139 |
|
|
- |
|
- |
|
- |
|
|
112 |
|
164 |
|
139 |
|
|
Sales of proved reserves |
(8 |
) |
(3 |
) |
(9 |
) |
|
- |
|
- |
|
- |
|
|
(8 |
) |
(3 |
) |
(9 |
) |
|
Current year production |
(142 |
) |
(246 |
) |
(183 |
) |
|
(7 |
) |
(6 |
) |
(8 |
) |
|
(149 |
) |
(252 |
) |
(191 |
) |
|
Balance at Dec. 31, 2005 |
1,986 |
|
3,478 |
|
2,566 |
|
|
45 |
|
- |
|
45 |
|
|
2,031 |
|
3,478 |
|
2,610 |
|
|
Revisions of previous estimates |
22 |
|
(28 |
) |
17 |
|
|
(7 |
) |
8 |
|
(6 |
) |
|
15 |
|
(20 |
) |
12 |
|
|
Improved recovery |
118 |
|
136 |
|
141 |
|
|
(1 |
) |
- |
|
(1 |
) |
|
117 |
|
136 |
|
140 |
|
|
Extensions & discoveries |
24 |
|
59 |
|
34 |
|
|
- |
|
- |
|
- |
|
|
24 |
|
59 |
|
34 |
|
|
Purchases of proved reserves |
254 |
|
435 |
|
326 |
|
|
- |
|
- |
|
- |
|
|
254 |
|
435 |
|
326 |
|
|
Sales of proved reserves |
(4 |
) |
(2 |
) |
(4 |
) |
|
- |
|
- |
|
- |
|
|
(4 |
) |
(2 |
) |
(4 |
) |
|
Current year production |
(166 |
) |
(268 |
) |
(211 |
) |
|
(7 |
) |
(8 |
) |
(8 |
) |
|
(173 |
) |
(276 |
) |
(219 |
) |
|
Balance at Dec. 31, 2006 |
2,234 |
|
3,810 |
|
2,868 |
|
|
30 |
|
- |
|
30 |
|
|
2,264 |
|
3,810 |
|
2,897 |
|
|
Proved Developed Reserves |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2002 |
1,475 |
|
1,740 |
|
1,765 |
|
|
34 |
|
- |
|
34 |
|
|
1,509 |
|
1,740 |
|
1,799 |
|
|
2003 |
1,543 |
|
1,803 |
|
1,844 |
|
|
35 |
|
9 |
|
37 |
|
|
1,578 |
|
1,812 |
|
1,880 |
|
|
2004 |
1,539 |
|
1,839 |
|
1,846 |
|
|
37 |
|
- |
|
37 |
|
|
1,576 |
|
1,839 |
|
1,883 |
|
|
2005 |
1,558 |
|
1,999 |
|
1,891 |
|
|
37 |
|
- |
|
37 |
|
|
1,595 |
|
1,999 |
|
1,928 |
|
|
2006 |
1,788 |
|
2,718 |
|
2,241 |
|
|
23 |
|
- |
|
23 |
|
|
1,811 |
|
2,718 |
|
2,264 |
|
|
Reserves-to-production ratio (YRS) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2002 |
13.3 |
|
8.9 |
|
12.4 |
|
|
5.3 |
|
- |
|
5.3 |
|
|
12.9 |
|
8.9 |
|
12.1 |
|
|
2003 |
13.1 |
|
11.7 |
|
12.8 |
|
|
4.8 |
|
- |
|
5.0 |
|
|
12.5 |
|
11.7 |
|
12.4 |
|
|
2004 |
13.3 |
|
12.8 |
|
13.2 |
|
|
4.8 |
|
- |
|
4.8 |
|
|
12.8 |
|
12.8 |
|
12.8 |
|
|
2005 |
14.0 |
|
14.1 |
|
14.0 |
|
|
6.4 |
|
- |
|
5.6 |
|
|
13.6 |
|
13.8 |
|
13.7 |
|
|
2006 |
13.5 |
|
14.2 |
|
13.6 |
|
|
4.3 |
|
- |
|
3.6 |
|
|
13.1 |
|
13.8 |
|
13.2 |
|
OCCIDENTAL PETROLEUM CORPORATION
WORLDWIDE BASIS PRODUCTION
MBOE/D
|
|
2006 | ||||||
|
|
OIL |
GAS |
BOE |
% of Total | |||
|
California |
86 |
|
256 |
|
129 |
|
21% |
|
Permian |
167 |
|
194 |
|
199 |
|
33% |
|
Horn Mountain |
12 |
|
7 |
|
13 |
|
2% |
|
Hugoton / Other |
3 |
|
138 |
|
26 |
|
4% |
|
Total US |
268 |
|
595 |
|
367 |
|
61% |
|
Argentina |
33 |
|
17 |
|
36 |
|
6% |
|
Bolivia |
- |
|
17 |
|
3 |
|
0% |
|
Colombia - 100% |
38 |
|
- |
|
38 |
|
6% |
|
Colombia - MI |
(5 |
) |
- |
|
(5 |
) |
-1% |
|
Latin America |
66 |
|
34 |
|
72 |
|
12% |
|
Oman |
18 |
|
30 |
|
23 |
|
4% |
|
Qatar |
43 |
|
- |
|
43 |
|
7% |
|
Libya |
23 |
|
- |
|
23 |
|
4% |
|
Yemen |
29 |
|
- |
|
29 |
|
5% |
|
Yemen - Comeco |
1 |
|
- |
|
1 |
|
0% |
|
Middle East / No Africa |
114 |
|
30 |
|
119 |
|
20% |
|
Pakistan |
4 |
|
76 |
|
17 |
|
3% |
|
Vanyoganneft |
23 |
|
22 |
|
27 |
|
4% |
|
Other Eastern |
27 |
|
98 |
|
43 |
|
7% |
|
|
|
|
|
|
|
|
|
|
Worldwide |
475 |
|
757 |
|
601 |
|
100% |