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) January 29, 2009
OCCIDENTAL PETROLEUM CORPORATION
(Exact name of registrant as specified in its charter)
|
Delaware |
1-9210 |
95-4035997 |
|
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
|
10889 Wilshire Boulevard Los Angeles, California |
90024 |
|
(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 2 – Financial Information
Item 2.02. Results of Operations and Financial Condition
On January 29, 2009, Occidental Petroleum Corporation released information regarding its results of operations for the three and twelve months ended December 31, 2008. The exhibits to this Form 8-K and the information set forth in this Item 2.02 are being furnished pursuant to Item 2.02, Results of Operations and Financial Condition. The full text of the press release is attached to this report as Exhibit 99.1. The full text of the speeches given by Dr. Ray R. Irani and Stephen I. Chazen are attached to this report as Exhibit 99.2. Investor Relations Supplemental Schedules are attached to this report as Exhibit 99.3. Earnings Conference Call Slides are attached to this report as Exhibit 99.4. Forward-Looking Statements Disclosure for Earnings Release Presentation Materials are attached to this report as Exhibit 99.5.
Section 8 – Other Events
Item 8.01. Other Events
On January 29, 2009, Occidental Petroleum Corporation announced net income of $443 million ($0.55 per diluted share) for the fourth quarter of 2008, compared with $1.452 billion ($1.74 per diluted share) for the fourth quarter of 2007. Core results for the fourth quarter of 2008 were $957 million ($1.18 per diluted share), compared with $1.464 billion ($1.76 per diluted share) for the fourth quarter of 2007. Core results for 2008 excluded after-tax charges of $514 million ($0.63 per diluted share).
Net income for the twelve months of 2008 was $6.857 billion ($8.35 per diluted share), compared with $5.400 billion ($6.44 per diluted share) for the twelve months of 2007. Core results were $7.348 billion ($8.95 per diluted share) for the twelve months of 2008, compared with $4.405 billion ($5.25 per diluted share) for 2007. See the attached schedule for a reconciliation of net income to core results.
QUARTERLY RESULTS
Oil and Gas
Oil and gas segment earnings were $339 million for the fourth quarter of 2008, compared with $2.461 billion for the same period in 2007. The fourth quarter of 2008 core results were $996 million after excluding pre-tax losses of $599 million relating to the impairment of assets and $58 million for rig termination costs. The $1.465 billion decrease in the fourth quarter of 2008 core results was due to lower crude oil and natural gas prices, higher operating expenses, DD&A rates and exploration expense.
For the fourth quarter of 2008, daily oil and gas sales volumes averaged 620,000 barrels of oil equivalent (BOE), compared with 590,000 BOE per day in the fourth quarter of 2007. The increase includes 22,000 BOE per day from the Dolphin Project, 14,000 BOE per day domestically and 6,000 BOE per day from Oman, offset by 12,000 BOE per day lower production in Libya as a result of the new contract terms.
Oxy's realized price for worldwide crude oil was $53.52 per barrel for the fourth quarter of 2008, compared with $80.30 per barrel for the fourth quarter of 2007. Domestic realized gas
1
prices dropped from $6.77 per MCF in the fourth quarter of 2007 to $4.67 per MCF for the fourth quarter of 2008.
Chemicals
Chemical segment earnings for the fourth quarter of 2008 were $127 million, compared with $94 million for the same period in 2007. 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 improvement in the fourth quarter of 2008 results reflect higher caustic soda margins, partially offset by lower volumes for chlorine, caustic soda and polyvinyl chloride.
Midstream, Marketing and Other
Midstream segment earnings were $170 million for the fourth quarter of 2008, compared with $138 million for the fourth quarter of 2007. Earnings for the fourth quarter of 2008 reflect higher margins in crude oil marketing, higher pipeline income from Dolphin and lower NGL margins in gas processing.
TWELVE-MONTH RESULTS
Oil and Gas
Oil and gas segment earnings were $10.651 billion for the twelve months of 2008, compared with $7.957 billion for the same period of 2007. Oil and gas core results were $11.308 billion for the twelve months of 2008 after excluding the fourth quarter impairments and rig termination costs described above, compared to 2007 core results of $7.369 billion. The $3.939 billion increase in the 2008 core results reflected $3.980 billion from higher crude oil and natural gas prices and $639 million from increased oil and gas production, offset by higher operating expenses and increased DD&A rates.
Daily oil and gas sales volumes for the year were 601,000 BOE per day for 2008, compared with 570,000 BOE per day for the same 2007 period. The 5.4 percent increase was largely the result of 39,000 BOE per day from the Dolphin project, offset by a reduction of 7,000 BOE per day in Libya, as a result of the new contract.
Oxy's realized price for worldwide crude oil was $88.26 per barrel for the twelve months of 2008, compared with $64.77 per barrel for the twelve months of 2007. Domestic realized gas prices increased from $6.53 per MCF in the twelve months of 2007 to $8.03 per MCF in the twelve months of 2008.
Chemicals
Chemical segment earnings were $669 million for the twelve months of 2008 compared with $601 million in 2007. The 2008 core results were $759 million after excluding the fourth quarter charge for the plant closure and impairments mentioned above. The improvement in 2008 is due primarily to higher caustic soda margins, partially offset by lower volumes in chlorine, caustic soda and polyvinyl chloride.
2
Midstream, Marketing and Other
Midstream segment earnings were $520 million for the twelve months of 2008, compared with $367 million for the same period in 2007. The improvement in 2008 reflected higher pipeline income from Dolphin and higher margins in gas processing.
Forward-Looking Statements
Statements in this report 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 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; higher-than-expected costs; political risk; operational interruptions; changes in tax rates and not successfully completing (or any material delay in) any expansions, capital projects, acquisitions, or dispositions. You should not place undue reliance on these forward-looking statements which speak only as of the date of this report. 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.
3
SUMMARY OF SEGMENT NET SALES AND EARNINGS
|
(Millions, except |
|
Fourth Quarter |
|
Twelve Months |
| ||||||||
|
per-share amounts) |
|
|
2008 |
|
|
2007 |
|
|
2008 |
|
|
2007 |
|
|
SEGMENT NET SALES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil and Gas |
|
$ |
2,746 |
|
$ |
4,122 |
|
$ |
18,187 |
|
$ |
13,304 |
|
|
Chemical |
|
|
1,005 |
|
|
1,134 |
|
|
5,112 |
|
|
4,664 |
|
|
Midstream, Marketing and Other |
|
|
394 |
|
|
413 |
|
|
1,598 |
|
|
1,388 |
|
|
Eliminations and other |
|
|
(124 |
) |
|
(152 |
) |
|
(680 |
) |
|
(572 |
) |
|
Net sales |
|
$ |
4,021 |
|
$ |
5,517 |
|
$ |
24,217 |
|
$ |
18,784 |
|
|
SEGMENT EARNINGS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil and Gas (a) |
|
$ |
339 |
|
$ |
2,461 |
|
$ |
10,651 |
|
$ |
7,957 |
|
|
Chemical (b) |
|
|
127 |
|
|
94 |
|
|
669 |
|
|
601 |
|
|
Midstream, Marketing and Other |
|
|
170 |
|
|
138 |
|
|
520 |
|
|
367 |
|
|
|
|
|
636 |
|
|
2,693 |
|
|
11,840 |
|
|
8,925 |
|
|
Unallocated Corporate Items |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net (c) |
|
|
(16 |
) |
|
(13 |
) |
|
(26 |
) |
|
(199 |
) |
|
Income taxes |
|
|
(118 |
) |
|
(1,057 |
) |
|
(4,629 |
) |
|
(3,507 |
) |
|
Other (d) |
|
|
(54 |
) |
|
(175 |
) |
|
(346 |
) |
|
(141 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from Continuing Operations |
|
|
448 |
|
|
1,448 |
|
|
6,839 |
|
|
5,078 |
|
|
Discontinued operations, net (e) |
|
|
(5 |
) |
|
4 |
|
|
18 |
|
|
322 |
|
|
NET INCOME |
|
$ |
443 |
|
$ |
1,452 |
|
$ |
6,857 |
|
$ |
5,400 |
|
|
BASIC EARNINGS PER COMMON SHARE |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations |
|
$ |
0.55 |
|
$ |
1.75 |
|
$ |
8.37 |
|
$ |
6.08 |
|
|
Discontinued operations, net (e) |
|
|
— |
|
|
— |
|
|
0.02 |
|
|
0.39 |
|
|
|
|
$ |
0.55 |
|
$ |
1.75 |
|
$ |
8.39 |
|
$ |
6.47 |
|
|
DILUTED EARNINGS PER COMMON SHARE |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations |
|
$ |
0.55 |
|
$ |
1.74 |
|
$ |
8.33 |
|
$ |
6.05 |
|
|
Discontinued operations, net (e) |
|
|
— |
|
|
— |
|
|
0.02 |
|
|
0.39 |
|
|
|
|
$ |
0.55 |
|
$ |
1.74 |
|
$ |
8.35 |
|
$ |
6.44 |
|
|
AVERAGE COMMON SHARES OUTSTANDING |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BASIC |
|
|
810.3 |
|
|
828.4 |
|
|
817.6 |
|
|
834.9 |
|
|
DILUTED |
|
|
811.6 |
|
|
833.1 |
|
|
820.8 |
|
|
839.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See footnotes on following page.
4
|
(a) |
Oil and Gas - The fourth quarter of 2008 includes $599 million charges for asset impairments and a $58 million charge for the termination of rig contracts. The twelve months of 2007 included a gain of $412 million from the sale of Occidental's Russian joint venture interests, a $112 million gain resulting from the resolution of certain legal disputes, a $103 million gain on the sale of exploration properties, partially offset by $74 million in charges for exploration impairments, and a $35 million gain from the sale of oil and gas interest. |
|
|
|
|
(b) |
Chemical - The fourth quarter of 2008 includes a $90 million charge for plant closure and impairments. |
|
|
|
|
(c) |
Interest Expense, net - The twelve months of 2007 included $167 million of interest charges for the purchase of various debt issues in the open market. |
|
|
|
|
(d) |
Unallocated Corporate Items - Other - The twelve months of 2007 included a $326 million gain from the sale of Lyondell shares, a $47 million charge for plant closure and related environmental remediation reserve, and a $25 million severance accrual. |
|
|
|
|
(e) |
Discontinued Operations, net - In 2008, Occidental received payment from Ecuador for tax refunds. In 2007, Occidental completed an exchange of oil and gas interests in Horn Mountain with BP p.l.c. (BP) for oil and gas interests in the Permian Basin and a gas processing plant in Texas. Occidental also sold its oil and gas interests in Pakistan to BP. |
SUMMARY OF CAPITAL EXPENDITURES AND DD&A EXPENSE
|
|
|
Fourth Quarter |
|
Twelve Months |
| ||||||||
|
($ millions) |
|
|
2008 |
|
|
2007 |
|
|
2008 |
|
|
2007 |
|
|
CAPITAL EXPENDITURES |
|
$ |
1,594 |
|
$ |
946 |
|
$ |
4,664 |
|
$ |
3,360 |
|
|
DEPRECIATION, DEPLETION AND |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AMORTIZATION OF ASSETS |
|
$ |
753 |
|
$ |
639 |
|
$ |
2,710 |
|
$ |
2,379 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ITEMS AFFECTING COMPARABILITY OF CORE EARNINGS BETWEEN PERIODS
|
Income/(Expense) |
|
Fourth Quarter |
|
Twelve Months |
| ||||||||
|
($ millions) |
|
|
2008 |
|
|
2007 |
|
|
2008 |
|
|
2007 |
|
|
Foreign exchange gains and (losses)* |
|
$ |
88 |
|
$ |
5 |
|
$ |
91 |
|
$ |
(18 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*Amounts shown after tax.
5
SUMMARY OF OPERATING STATISTICS - SALES
|
|
|
Fourth Quarter |
|
Twelve Months |
| ||||
|
|
|
2008 |
|
2007 |
|
2008 |
|
2007 |
|
|
NET OIL, GAS AND LIQUIDS |
|
|
|
|
|
|
|
|
|
|
SALES PER DAY |
|
|
|
|
|
|
|
|
|
|
United States |
|
|
|
|
|
|
|
|
|
|
Crude Oil and Liquids (MBBL) |
|
|
|
|
|
|
|
|
|
|
California |
|
97 |
|
88 |
|
89 |
|
89 |
|
|
Permian |
|
167 |
|
170 |
|
168 |
|
167 |
|
|
Midcontinent and Rockies |
|
9 |
|
4 |
|
6 |
|
4 |
|
|
Total |
|
273 |
|
262 |
|
263 |
|
260 |
|
|
Natural Gas (MMCF) |
|
|
|
|
|
|
|
|
|
|
California |
|
221 |
|
250 |
|
235 |
|
254 |
|
|
Permian |
|
188 |
|
180 |
|
181 |
|
186 |
|
|
Midcontinent and Rockies |
|
187 |
|
148 |
|
171 |
|
153 |
|
|
Total |
|
596 |
|
578 |
|
587 |
|
593 |
|
|
Latin America |
|
|
|
|
|
|
|
|
|
|
Crude Oil (MBBL) |
|
|
|
|
|
|
|
|
|
|
Argentina |
|
32 |
|
31 |
|
32 |
|
32 |
|
|
Colombia |
|
45 |
|
41 |
|
43 |
|
42 |
|
|
Total |
|
77 |
|
72 |
|
75 |
|
74 |
|
|
Natural Gas (MMCF) |
|
|
|
|
|
|
|
|
|
|
Argentina |
|
24 |
|
19 |
|
21 |
|
22 |
|
|
Bolivia |
|
21 |
|
22 |
|
21 |
|
18 |
|
|
Total |
|
45 |
|
41 |
|
42 |
|
40 |
|
|
Middle East/North Africa |
|
|
|
|
|
|
|
|
|
|
Crude Oil and Liquids (MBBL) |
|
|
|
|
|
|
|
|
|
|
Oman |
|
27 |
|
20 |
|
23 |
|
20 |
|
|
Dolphin |
|
23 |
|
14 |
|
21 |
|
4 |
|
|
Qatar |
|
48 |
|
52 |
|
47 |
|
48 |
|
|
Yemen |
|
20 |
|
22 |
|
21 |
|
25 |
|
|
Libya |
|
10 |
|
22 |
|
15 |
|
22 |
|
|
Total |
|
128 |
|
130 |
|
127 |
|
119 |
|
|
Natural Gas (MMCF) |
|
|
|
|
|
|
|
|
|
|
Oman |
|
23 |
|
30 |
|
24 |
|
30 |
|
|
Dolphin |
|
209 |
|
133 |
|
184 |
|
51 |
|
|
Total |
|
232 |
|
163 |
|
208 |
|
81 |
|
|
Barrels of Oil Equivalent (MBOE) |
|
|
|
|
|
|
|
|
|
|
Subtotal consolidated subsidiaries |
|
624 |
|
594 |
|
605 |
|
573 |
|
|
Colombia-minority interest |
|
(6 |
) |
(6 |
) |
(6 |
) |
(5 |
) |
|
Yemen-Occidental net interest |
|
2 |
|
2 |
|
2 |
|
2 |
|
|
Total Worldwide Sales - MBOE |
|
620 |
|
590 |
|
601 |
|
570 |
|
|
|
|
|
|
|
|
|
|
|
|
6
SUMMARY OF OPERATING STATISTICS - PRODUCTION
|
|
|
Fourth Quarter |
|
Twelve Months |
| ||||
|
|
|
2008 |
|
2007 |
|
2008 |
|
2007 |
|
|
NET OIL, GAS AND LIQUIDS |
|
|
|
|
|
|
|
|
|
|
PRODUCTION PER DAY |
|
|
|
|
|
|
|
|
|
|
United States |
|
|
|
|
|
|
|
|
|
|
Crude Oil and Liquids (MBBL) |
|
273 |
|
262 |
|
263 |
|
260 |
|
|
Natural Gas (MMCF) |
|
596 |
|
578 |
|
587 |
|
593 |
|
|
Latin America |
|
|
|
|
|
|
|
|
|
|
Crude Oil (MBBL) |
|
|
|
|
|
|
|
|
|
|
Argentina |
|
38 |
|
32 |
|
34 |
|
33 |
|
|
Colombia |
|
45 |
|
41 |
|
44 |
|
42 |
|
|
Total |
|
83 |
|
73 |
|
78 |
|
75 |
|
|
Natural Gas (MMCF) |
|
45 |
|
41 |
|
42 |
|
40 |
|
|
Middle East/North Africa |
|
|
|
|
|
|
|
|
|
|
Crude Oil and Liquids (MBBL) |
|
|
|
|
|
|
|
|
|
|
Oman |
|
28 |
|
20 |
|
23 |
|
19 |
|
|
Dolphin |
|
22 |
|
14 |
|
20 |
|
5 |
|
|
Qatar |
|
48 |
|
51 |
|
47 |
|
47 |
|
|
Yemen |
|
20 |
|
22 |
|
21 |
|
25 |
|
|
Libya |
|
8 |
|
20 |
|
15 |
|
21 |
|
|
Total |
|
126 |
|
127 |
|
126 |
|
117 |
|
|
Natural Gas (MMCF) |
|
232 |
|
163 |
|
208 |
|
81 |
|
|
Barrels of Oil Equivalent (MBOE) |
|
|
|
|
|
|
|
|
|
|
Subtotal consolidated subsidiaries |
|
627 |
|
592 |
|
607 |
|
571 |
|
|
Colombia-minority interest |
|
(6 |
) |
(6 |
) |
(6 |
) |
(6 |
) |
|
Yemen-Occidental net interest |
|
2 |
|
2 |
|
2 |
|
2 |
|
|
Total Worldwide Production - MBOE |
|
623 |
|
588 |
|
603 |
|
567 |
|
|
|
|
|
|
|
|
|
|
|
|
7
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.
8
SIGNIFICANT TRANSACTIONS AND EVENTS AFFECTING EARNINGS
|
|
|
Fourth Quarter |
| ||||||||||
|
($ millions, except |
|
|
|
|
Diluted |
|
|
|
|
Diluted |
| ||
|
per-share amounts) |
|
|
2008 |
|
|
EPS |
|
|
2007 |
|
|
EPS |
|
|
TOTAL REPORTED EARNINGS |
|
$ |
443 |
|
$ |
0.55 |
|
$ |
1,452 |
|
$ |
1.74 |
|
|
Oil and Gas |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Earnings |
|
$ |
339 |
|
|
|
|
$ |
2,461 |
|
|
|
|
|
Add: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset impairments |
|
|
599 |
|
|
|
|
|
— |
|
|
|
|
|
Rig contract terminations |
|
|
58 |
|
|
|
|
|
— |
|
|
|
|
|
Segment Core Results |
|
|
996 |
|
|
|
|
|
2,461 |
|
|
|
|
|
Chemicals |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Earnings |
|
|
127 |
|
|
|
|
|
94 |
|
|
|
|
|
Add: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plant closure and Impairments |
|
|
90 |
|
|
|
|
|
— |
|
|
|
|
|
Segment Core Results |
|
|
217 |
|
|
|
|
|
94 |
|
|
|
|
|
Midstream, Marketing and Other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Earnings |
|
|
170 |
|
|
|
|
|
138 |
|
|
|
|
|
Add: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
No significant items affecting earnings |
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
Segment Core Results |
|
|
170 |
|
|
|
|
|
138 |
|
|
|
|
|
Total Segment Core Results |
|
|
1,383 |
|
|
|
|
|
2,693 |
|
|
|
|
|
Corporate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate Results — Non Segment* |
|
|
(193 |
) |
|
|
|
|
(1,241 |
) |
|
|
|
|
Add: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance Accrual |
|
|
— |
|
|
|
|
|
25 |
|
|
|
|
|
Tax effect of pre-tax adjustments |
|
|
(238 |
) |
|
|
|
|
(9 |
) |
|
|
|
|
Discontinued operations, net** |
|
|
5 |
|
|
|
|
|
(4 |
) |
|
|
|
|
Corporate Core Results — Non Segment |
|
|
(426 |
) |
|
|
|
|
(1,229 |
) |
|
|
|
|
TOTAL CORE RESULTS |
|
$ |
957 |
|
$ |
1.18 |
|
$ |
1,464 |
|
$ |
1.76 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* |
Interest expense, income taxes, G&A expense and other. |
|
** |
Amounts shown after tax. |
9
SIGNIFICANT TRANSACTIONS AND EVENTS AFFECTING EARNINGS (continued)
|
|
|
Twelve Months |
| ||||||||||
|
($ millions, except |
|
|
|
|
Diluted |
|
|
|
|
Diluted |
| ||
|
per-share amounts) |
|
|
2008 |
|
|
EPS |
|
|
2007 |
|
|
EPS |
|
|
TOTAL REPORTED EARNINGS |
|
$ |
6,857 |
|
$ |
8.35 |
|
$ |
5,400 |
|
$ |
6.44 |
|
|
Oil and Gas |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Earnings |
|
$ |
10,651 |
|
|
|
|
$ |
7,957 |
|
|
|
|
|
Add: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Russia joint venture** |
|
|
— |
|
|
|
|
|
(412 |
) |
|
|
|
|
Legal settlements** |
|
|
— |
|
|
|
|
|
(112 |
) |
|
|
|
|
Asset impairments |
|
|
599 |
|
|
|
|
|
74 |
|
|
|
|
|
Gain on sale of oil & gas interests |
|
|
|
|
|
|
|
|
(35 |
) |
|
|
|
|
Sale of exploration properties |
|
|
— |
|
|
|
|
|
(103 |
) |
|
|
|
|
Rig contract terminations |
|
|
58 |
|
|
|
|
|
— |
|
|
|
|
|
Segment Core Results |
|
|
11,308 |
|
|
|
|
|
7,369 |
|
|
|
|
|
Chemicals |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Earnings |
|
|
669 |
|
|
|
|
|
601 |
|
|
|
|
|
Add: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plant closure and Impairments |
|
|
90 |
|
|
|
|
|
— |
|
|
|
|
|
Segment Core Results |
|
|
759 |
|
|
|
|
|
601 |
|
|
|
|
|
Midstream, Marketing and Other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Earnings |
|
|
520 |
|
|
|
|
|
367 |
|
|
|
|
|
Add: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
No significant items affecting earnings |
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
Segment Core Results |
|
|
520 |
|
|
|
|
|
367 |
|
|
|
|
|
Total Segment Core Results |
|
|
12,587 |
|
|
|
|
|
8,337 |
|
|
|
|
|
Corporate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate Results — Non Segment* |
|
|
(4,983 |
) |
|
|
|
|
(3,525 |
) |
|
|
|
|
Add: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt purchase expense |
|
|
— |
|
|
|
|
|
167 |
|
|
|
|
|
Facility closure |
|
|
— |
|
|
|
|
|
47 |
|
|
|
|
|
Gain on sale of Lyondell shares |
|
|
— |
|
|
|
|
|
(326 |
) |
|
|
|
|
Severance accrual |
|
|
— |
|
|
|
|
|
25 |
|
|
|
|
|
Tax effect of pre-tax adjustments |
|
|
(238 |
) |
|
|
|
|
2 |
|
|
|
|
|
Discontinued operations, net** |
|
|
(18 |
) |
|
|
|
|
(322 |
) |
|
|
|
|
Corporate Core Results — Non Segment |
|
|
(5,239 |
) |
|
|
|
|
(3,932 |
) |
|
|
|
|
TOTAL CORE RESULTS |
|
$ |
7,348 |
|
$ |
8.95 |
|
$ |
4,405 |
|
$ |
5.25 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* |
Interest expense, income taxes, G&A expense and other. |
|
** |
Amounts shown after tax. |
10
Section 9 – Financial Statements and Exhibits
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
|
|
99.1 |
Press release dated January 29, 2009. |
|
|
|
|
|
|
99.2 |
Full text of speeches given by Dr. Ray R. Irani and Stephen I. Chazen. |
|
|
|
|
|
|
99.3 |
Investor Relations Supplemental Schedules. |
|
|
|
|
|
|
99.4 |
Earnings Conference Call Slides. |
|
|
|
|
|
|
99.5 |
Forward-Looking Statements Disclosure for Earnings Release Presentation Materials. |
11
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.
|
|
OCCIDENTAL PETROLEUM CORPORATION |
|
|
(Registrant) |
|
|
|
|
|
|
|
|
|
|
|
|
|
DATE: January 29, 2009 |
/s/ ROY PINECI |
|
|
Roy Pineci, Vice President, Controller and Principal Accounting Officer |
12
EXHIBIT INDEX
|
99.1 |
|
Press release dated January 29, 2009. |
|
|
|
|
|
99.2 |
|
Full text of speeches given by Dr. Ray R. Irani and Stephen I. Chazen. |
|
|
|
|
|
99.3 |
|
Investor Relations Supplemental Schedules. |
|
|
|
|
|
99.4 |
|
Earnings Conference Call Slides. |
|
|
|
|
|
99.5 |
|
Forward-Looking Statements Disclosure for Earnings Release Presentation Materials. |
EXHIBIT 99.1
For Immediate Release: January 29, 2009
Occidental Petroleum Announces Fourth Quarter 2008 Results
LOS ANGELES, January 29, 2009 -- Occidental Petroleum Corporation (NYSE: OXY) announced net income of $443 million ($0.55 per diluted share) for the fourth quarter of 2008, compared with $1.452 billion ($1.74 per diluted share) for the fourth quarter of 2007. Core results for the fourth quarter of 2008 were $957 million ($1.18 per diluted share), compared with $1.464 billion ($1.76 per diluted share) for the fourth quarter of 2007. Core results for 2008 excluded after-tax charges of $514 million ($0.63 per diluted share).
Net income for the twelve months of 2008 was $6.857 billion ($8.35 per diluted share), compared with $5.400 billion ($6.44 per diluted share) for the twelve months of 2007. Core results were $7.348 billion ($8.95 per diluted share) for the twelve months of 2008, compared with $4.405 billion ($5.25 per diluted share) for 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, "In spite of a difficult fourth quarter, 2008 was a very strong year for Occidental with full year earnings being the highest in Oxy's history. In addition, our production grew by 5.4 percent from 2007 reaching 601,000 BOE per day.
"We are investing for the future growth of the company, despite volatile commodity prices, while maintaining a discipline of investing only in projects that we believe give us good return on capital employed. In the fourth quarter, we completed the acquisition of the remainder of Plains Exploration's interests in the Permian and Piceance Basins. We announced the signing of a preliminary agreement to develop the Jarn Yaphour and Ramhan oil and gas fields in the Emirate of Abu
Dhabi and the signing of an exploration and production sharing agreement to develop existing gas fields in Northern Oman. Additionally, earlier this month we were selected from among several international companies to develop oil and gas reserves in the Kingdom of Bahrain.
"The current oil and gas industry cost structure is higher than what the current product prices can support. In order to protect our returns, we are announcing a 2009 capital program of $3.5 billion. We believe that with this level of capital, we will achieve our targeted returns in the current price environment as well as grow our production volumes in 2009, 2010 and beyond."
QUARTERLY RESULTS
Oil and Gas
Oil and gas segment earnings were $339 million for the fourth quarter of 2008, compared with $2.461 billion for the same period in 2007. The fourth quarter of 2008 core results were $996 million after excluding pre-tax losses of $599 million relating to the impairment of assets and $58 million for rig termination costs. The $1.465 billion decrease in the fourth quarter of 2008 core results was due to lower crude oil and natural gas prices, higher operating expenses, DD&A rates and exploration expense.
For the fourth quarter of 2008, daily oil and gas sales volumes averaged 620,000 barrels of oil equivalent (BOE), compared with 590,000 BOE per day in the fourth quarter of 2007. The increase includes 22,000 BOE per day from the Dolphin Project, 14,000 BOE per day domestically and 6,000 BOE per day from Oman, offset by 12,000 BOE per day lower production in Libya as a result of the new contract terms.
Oxy's realized price for worldwide crude oil was $53.52 per barrel for the fourth quarter of 2008, compared with $80.30 per barrel for the fourth quarter of 2007. Domestic realized gas prices dropped from $6.77 per MCF in the fourth quarter of 2007 to $4.67 per MCF for the fourth quarter of 2008.
2
Chemicals
Chemical segment earnings for the fourth quarter of 2008 were $127 million, compared with $94 million for the same period in 2007. 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 improvement in the fourth quarter of 2008 results reflect higher caustic soda margins, partially offset by lower volumes for chlorine, caustic soda and polyvinyl chloride.
Midstream, Marketing and Other
Midstream segment earnings were $170 million for the fourth quarter of 2008, compared with $138 million for the fourth quarter of 2007. Earnings for the fourth quarter of 2008 reflect higher margins in crude oil marketing, higher pipeline income from Dolphin and lower NGL margins in gas processing.
TWELVE-MONTH RESULTS
Oil and Gas
Oil and gas segment earnings were $10.651 billion for the twelve months of 2008, compared with $7.957 billion for the same period of 2007. Oil and gas core results were $11.308 billion for the twelve months of 2008 after excluding the fourth quarter impairments and rig termination costs described above, compared to 2007 core results of $7.369 billion. The $3.939 billion increase in the 2008 core results reflected $3.980 billion from higher crude oil and natural gas prices and $639 million from increased oil and gas production, offset by higher operating expenses and increased DD&A rates.
Daily oil and gas sales volumes for the year were 601,000 BOE per day for 2008, compared with 570,000 BOE per day for the same 2007 period. The 5.4 percent increase was largely the result of 39,000 BOE per day from the Dolphin project, offset by a reduction of 7,000 BOE per day in Libya, as a result of the new contract.
Oxy's realized price for worldwide crude oil was $88.26 per barrel for the twelve months of 2008, compared with $64.77 per barrel for the twelve months of 2007. Domestic realized gas
3
prices increased from $6.53 per MCF in the twelve months of 2007 to $8.03 per MCF in the twelve months of 2008.
Chemicals
Chemical segment earnings were $669 million for the twelve months of 2008 compared with $601 million in 2007. The 2008 core results were $759 million after excluding the fourth quarter charge for the plant closure and impairments mentioned above. The improvement in 2008 is due primarily to higher caustic soda margins, partially offset by lower volumes in chlorine, caustic soda and polyvinyl chloride.
Midstream, Marketing and Other
Midstream segment earnings were $520 million for the twelve months of 2008, compared with $367 million for the same period in 2007. The improvement in 2008 reflected higher pipeline income from Dolphin and higher margins in gas processing.
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.
4
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 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; higher-than-expected costs; political risk; operational interruptions; changes in tax rates and not successfully completing (or any material delay in) any expansions, capital projects, acquisitions, or dispositions. 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.
-0-
|
Contacts: |
Richard S. Kline (media) |
|
|
richard_kline@oxy.com |
|
|
310-443-6249 |
|
|
|
|
|
Chris Stavros (investors) |
|
|
chris_stavros@oxy.com |
|
|
212-603-8184 |
|
|
|
|
|
For further analysis of Occidental's quarterly performance, please visit the web site: www.oxy.com |
5
SUMMARY OF SEGMENT NET SALES AND EARNINGS
|
(Millions, except |
|
Fourth Quarter |
|
Twelve Months |
| ||||||||
|
per-share amounts) |
|
|
2008 |
|
|
2007 |
|
|
2008 |
|
|
2007 |
|
|
SEGMENT NET SALES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil and Gas |
|
$ |
2,746 |
|
$ |
4,122 |
|
$ |
18,187 |
|
$ |
13,304 |
|
|
Chemical |
|
|
1,005 |
|
|
1,134 |
|
|
5,112 |
|
|
4,664 |
|
|
Midstream, Marketing and Other |
|
|
394 |
|
|
413 |
|
|
1,598 |
|
|
1,388 |
|
|
Eliminations and other |
|
|
(124 |
) |
|
(152 |
) |
|
(680 |
) |
|
(572 |
) |
|
Net sales |
|
$ |
4,021 |
|
$ |
5,517 |
|
$ |
24,217 |
|
$ |
18,784 |
|
|
SEGMENT EARNINGS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil and Gas (a) |
|
$ |
339 |
|
$ |
2,461 |
|
$ |
10,651 |
|
$ |
7,957 |
|
|
Chemical (b) |
|
|
127 |
|
|
94 |
|
|
669 |
|
|
601 |
|
|
Midstream, Marketing and Other |
|
|
170 |
|
|
138 |
|
|
520 |
|
|
367 |
|
|
|
|
|
636 |
|
|
2,693 |
|
|
11,840 |
|
|
8,925 |
|
|
Unallocated Corporate Items |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net (c) |
|
|
(16 |
) |
|
(13 |
) |
|
(26 |
) |
|
(199 |
) |
|
Income taxes |
|
|
(118 |
) |
|
(1,057 |
) |
|
(4,629 |
) |
|
(3,507 |
) |
|
Other (d) |
|
|
(54 |
) |
|
(175 |
) |
|
(346 |
) |
|
(141 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from Continuing Operations |
|
|
448 |
|
|
1,448 |
|
|
6,839 |
|
|
5,078 |
|
|
Discontinued operations, net (e) |
|
|
(5 |
) |
|
4 |
|
|
18 |
|
|
322 |
|
|
NET INCOME |
|
$ |
443 |
|
$ |
1,452 |
|
$ |
6,857 |
|
$ |
5,400 |
|
|
BASIC EARNINGS PER COMMON SHARE |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations |
|
$ |
0.55 |
|
$ |
1.75 |
|
$ |
8.37 |
|
$ |
6.08 |
|
|
Discontinued operations, net (e) |
|
|
— |
|
|
— |
|
|
0.02 |
|
|
0.39 |
|
|
|
|
$ |
0.55 |
|
$ |
1.75 |
|
$ |
8.39 |
|
$ |
6.47 |
|
|
DILUTED EARNINGS PER COMMON SHARE |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations |
|
$ |
0.55 |
|
$ |
1.74 |
|
$ |
8.33 |
|
$ |
6.05 |
|
|
Discontinued operations, net (e) |
|
|
— |
|
|
— |
|
|
0.02 |
|
|
0.39 |
|
|
|
|
$ |
0.55 |
|
$ |
1.74 |
|
$ |
8.35 |
|
$ |
6.44 |
|
|
AVERAGE COMMON SHARES OUTSTANDING |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BASIC |
|
|
810.3 |
|
|
828.4 |
|
|
817.6 |
|
|
834.9 |
|
|
DILUTED |
|
|
811.6 |
|
|
833.1 |
|
|
820.8 |
|
|
839.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See footnotes on following page.
6
|
(a) |
Oil and Gas - The fourth quarter of 2008 includes $599 million charges for asset impairments and a $58 million charge for the termination of rig contracts. The twelve months of 2007 included a gain of $412 million from the sale of Occidental's Russian joint venture interests, a $112 million gain resulting from the resolution of certain legal disputes, a $103 million gain on the sale of exploration properties, partially offset by $74 million in charges for exploration impairments, and a $35 million gain from the sale of oil and gas interest. |
|
|
|
|
(b) |
Chemical - The fourth quarter of 2008 includes a $90 million charge for plant closure and impairments. |
|
|
|
|
(c) |
Interest Expense, net - The twelve months of 2007 included $167 million of interest charges for the purchase of various debt issues in the open market. |
|
|
|
|
(d) |
Unallocated Corporate Items - Other - The twelve months of 2007 included a $326 million gain from the sale of Lyondell shares, a $47 million charge for plant closure and related environmental remediation reserve, and a $25 million severance accrual. |
|
|
|
|
(e) |
Discontinued Operations, net - In 2008, Occidental received payment from Ecuador for tax refunds. In 2007, Occidental completed an exchange of oil and gas interests in Horn Mountain with BP p.l.c. (BP) for oil and gas interests in the Permian Basin and a gas processing plant in Texas. Occidental also sold its oil and gas interests in Pakistan to BP. |
SUMMARY OF CAPITAL EXPENDITURES AND DD&A EXPENSE
|
|
|
Fourth Quarter |
|
Twelve Months |
| ||||||||
|
($ millions) |
|
|
2008 |
|
|
2007 |
|
|
2008 |
|
|
2007 |
|
|
CAPITAL EXPENDITURES |
|
$ |
1,594 |
|
$ |
946 |
|
$ |
4,664 |
|
$ |
3,360 |
|
|
DEPRECIATION, DEPLETION AND |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AMORTIZATION OF ASSETS |
|
$ |
753 |
|
$ |
639 |
|
$ |
2,710 |
|
$ |
2,379 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ITEMS AFFECTING COMPARABILITY OF CORE EARNINGS BETWEEN PERIODS
|
Income/(Expense) |
|
Fourth Quarter |
|
Twelve Months |
| ||||||||
|
($ millions) |
|
|
2008 |
|
|
2007 |
|
|
2008 |
|
|
2007 |
|
|
Foreign exchange gains and (losses)* |
|
$ |
88 |
|
$ |
5 |
|
$ |
91 |
|
$ |
(18 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*Amounts shown after tax.
7
SUMMARY OF OPERATING STATISTICS - SALES
|
|
|
Fourth Quarter |
|
Twelve Months |
| ||||
|
|
|
2008 |
|
2007 |
|
2008 |
|
2007 |
|
|
NET OIL, GAS AND LIQUIDS |
|
|
|
|
|
|
|
|
|
|
SALES PER DAY |
|
|
|
|
|
|
|
|
|
|
United States |
|
|
|
|
|
|
|
|
|
|
Crude Oil and Liquids (MBBL) |
|
|
|
|
|
|
|
|
|
|
California |
|
97 |
|
88 |
|
89 |
|
89 |
|
|
Permian |
|
167 |
|
170 |
|
168 |
|
167 |
|
|
Midcontinent and Rockies |
|
9 |
|
4 |
|
6 |
|
4 |
|
|
Total |
|
273 |
|
262 |
|
263 |
|
260 |
|
|
Natural Gas (MMCF) |
|
|
|
|
|
|
|
|
|
|
California |
|
221 |
|
250 |
|
235 |
|
254 |
|
|
Permian |
|
188 |
|
180 |
|
181 |
|
186 |
|
|
Midcontinent and Rockies |
|
187 |
|
148 |
|
171 |
|
153 |
|
|
Total |
|
596 |
|
578 |
|
587 |
|
593 |
|
|
Latin America |
|
|
|
|
|
|
|
|
|
|
Crude Oil (MBBL) |
|
|
|
|
|
|
|
|
|
|
Argentina |
|
32 |
|
31 |
|
32 |
|
32 |
|
|
Colombia |
|
45 |
|
41 |
|
43 |
|
42 |
|
|
Total |
|
77 |
|
72 |
|
75 |
|
74 |
|
|
Natural Gas (MMCF) |
|
|
|
|
|
|
|
|
|
|
Argentina |
|
24 |
|
19 |
|
21 |
|
22 |
|
|
Bolivia |
|
21 |
|
22 |
|
21 |
|
18 |
|
|
Total |
|
45 |
|
41 |
|
42 |
|
40 |
|
|
Middle East/North Africa |
|
|
|
|
|
|
|
|
|
|
Crude Oil and Liquids (MBBL) |
|
|
|
|
|
|
|
|
|
|
Oman |
|
27 |
|
20 |
|
23 |
|
20 |
|
|
Dolphin |
|
23 |
|
14 |
|
21 |
|
4 |
|
|
Qatar |
|
48 |
|
52 |
|
47 |
|
48 |
|
|
Yemen |
|
20 |
|
22 |
|
21 |
|
25 |
|
|
Libya |
|
10 |
|
22 |
|
15 |
|
22 |
|
|
Total |
|
128 |
|
130 |
|
127 |
|
119 |
|
|
Natural Gas (MMCF) |
|
|
|
|
|
|
|
|
|
|
Oman |
|
23 |
|
30 |
|
24 |
|
30 |
|
|
Dolphin |
|
209 |
|
133 |
|
184 |
|
51 |
|
|
Total |
|
232 |
|
163 |
|
208 |
|
81 |
|
|
Barrels of Oil Equivalent (MBOE) |
|
|
|
|
|
|
|
|
|
|
Subtotal consolidated subsidiaries |
|
624 |
|
594 |
|
605 |
|
573 |
|
|
Colombia-minority interest |
|
(6 |
) |
(6 |
) |
(6 |
) |
(5 |
) |
|
Yemen-Occidental net interest |
|
2 |
|
2 |
|
2 |
|
2 |
|
|
Total Worldwide Sales - MBOE |
|
620 |
|
590 |
|
601 |
|
570 |
|
|
|
|
|
|
|
|
|
|
|
|
8
SUMMARY OF OPERATING STATISTICS - PRODUCTION
|
|
|
Fourth Quarter |
|
Twelve Months |
| ||||
|
|
|
2008 |
|
2007 |
|
2008 |
|
2007 |
|
|
NET OIL, GAS AND LIQUIDS |
|
|
|
|
|
|
|
|
|
|
PRODUCTION PER DAY |
|
|
|
|
|
|
|
|
|
|
United States |
|
|
|
|
|
|
|
|
|
|
Crude Oil and Liquids (MBBL) |
|
273 |
|
262 |
|
263 |
|
260 |
|
|
Natural Gas (MMCF) |
|
596 |
|
578 |
|
587 |
|
593 |
|
|
Latin America |
|
|
|
|
|
|
|
|
|
|
Crude Oil (MBBL) |
|
|
|
|
|
|
|
|
|
|
Argentina |
|
38 |
|
32 |
|
34 |
|
33 |
|
|
Colombia |
|
45 |
|
41 |
|
44 |
|
42 |
|
|
Total |
|
83 |
|
73 |
|
78 |
|
75 |
|
|
Natural Gas (MMCF) |
|
45 |
|
41 |
|
42 |
|
40 |
|
|
Middle East/North Africa |
|
|
|
|
|
|
|
|
|
|
Crude Oil and Liquids (MBBL) |
|
|
|
|
|
|
|
|
|
|
Oman |
|
28 |
|
20 |
|
23 |
|
19 |
|
|
Dolphin |
|
22 |
|
14 |
|
20 |
|
5 |
|
|
Qatar |
|
48 |
|
51 |
|
47 |
|
47 |
|
|
Yemen |
|
20 |
|
22 |
|
21 |
|
25 |
|
|
Libya |
|
8 |
|
20 |
|
15 |
|
21 |
|
|
Total |
|
126 |
|
127 |
|
126 |
|
117 |
|
|
Natural Gas (MMCF) |
|
232 |
|
163 |
|
208 |
|
81 |
|
|
Barrels of Oil Equivalent (MBOE) |
|
|
|
|
|
|
|
|
|
|
Subtotal consolidated subsidiaries |
|
627 |
|
592 |
|
607 |
|
571 |
|
|
Colombia-minority interest |
|
(6 |
) |
(6 |
) |
(6 |
) |
(6 |
) |
|
Yemen-Occidental net interest |
|
2 |
|
2 |
|
2 |
|
2 |
|
|
Total Worldwide Production - MBOE |
|
623 |
|
588 |
|
603 |
|
567 |
|
|
|
|
|
|
|
|
|
|
|
|
9
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.
10
SIGNIFICANT TRANSACTIONS AND EVENTS AFFECTING EARNINGS
|
|
|
Fourth Quarter |
| ||||||||||
|
($ millions, except |
|
|
|
|
Diluted |
|
|
|
|
Diluted |
| ||
|
per-share amounts) |
|
|
2008 |
|
|
EPS |
|
|
2007 |
|
|
EPS |
|
|
TOTAL REPORTED EARNINGS |
|
$ |
443 |
|
$ |
0.55 |
|
$ |
1,452 |
|
$ |
1.74 |
|
|
Oil and Gas |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Earnings |
|
$ |
339 |
|
|
|
|
$ |
2,461 |
|
|
|
|
|
Add: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset impairments |
|
|
599 |
|
|
|
|
|
— |
|
|
|
|
|
Rig contract terminations |
|
|
58 |
|
|
|
|
|
— |
|
|
|
|
|
Segment Core Results |
|
|
996 |
|
|
|
|
|
2,461 |
|
|
|
|
|
Chemicals |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Earnings |
|
|
127 |
|
|
|
|
|
94 |
|
|
|
|
|
Add: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plant closure and Impairments |
|
|
90 |
|
|
|
|
|
— |
|
|
|
|
|
Segment Core Results |
|
|
217 |
|
|
|
|
|
94 |
|
|
|
|
|
Midstream, Marketing and Other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Earnings |
|
|
170 |
|
|
|
|
|
138 |
|
|
|
|
|
Add: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
No significant items affecting earnings |
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
Segment Core Results |
|
|
170 |
|
|
|
|
|
138 |
|
|
|
|
|
Total Segment Core Results |
|
|
1,383 |
|
|
|
|
|
2,693 |
|
|
|
|
|
Corporate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate Results — Non Segment* |
|
|
(193 |
) |
|
|
|
|
(1,241 |
) |
|
|
|
|
Add: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance Accrual |
|
|
— |
|
|
|
|
|
25 |
|
|
|
|
|
Tax effect of pre-tax adjustments |
|
|
(238 |
) |
|
|
|
|
(9 |
) |
|
|
|
|
Discontinued operations, net** |
|
|
5 |
|
|
|
|
|
(4 |
) |
|
|
|
|
Corporate Core Results — Non Segment |
|
|
(426 |
) |
|
|
|
|
(1,229 |
) |
|
|
|
|
TOTAL CORE RESULTS |
|
$ |
957 |
|
$ |
1.18 |
|
$ |
1,464 |
|
$ |
1.76 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* |
Interest expense, income taxes, G&A expense and other. |
|
** |
Amounts shown after tax. |
11
SIGNIFICANT TRANSACTIONS AND EVENTS AFFECTING EARNINGS (continued)
|
|
|
Twelve Months |
| ||||||||||
|
($ millions, except |
|
|
|
|
Diluted |
|
|
|
|
Diluted |
| ||
|
per-share amounts) |
|
|
2008 |
|
|
EPS |
|
|
2007 |
|
|
EPS |
|
|
TOTAL REPORTED EARNINGS |
|
$ |
6,857 |
|
$ |
8.35 |
|
$ |
5,400 |
|
$ |
6.44 |
|
|
Oil and Gas |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Earnings |
|
$ |
10,651 |
|
|
|
|
$ |
7,957 |
|
|
|
|
|
Add: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Russia joint venture** |
|
|
— |
|
|
|
|
|
(412 |
) |
|
|
|
|
Legal settlements** |
|
|
— |
|
|
|
|
|
(112 |
) |
|
|
|
|
Asset impairments |
|
|
599 |
|
|
|
|
|
74 |
|
|
|
|
|
Gain on sale of oil & gas interests |
|
|
|
|
|
|
|
|
(35 |
) |
|
|
|
|
Sale of exploration properties |
|
|
— |
|
|
|
|
|
(103 |
) |
|
|
|
|
Rig contract terminations |
|
|
58 |
|
|
|
|
|
— |
|
|
|
|
|
Segment Core Results |
|
|
11,308 |
|
|
|
|
|
7,369 |
|
|
|
|
|
Chemicals |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Earnings |
|
|
669 |
|
|
|
|
|
601 |
|
|
|
|
|
Add: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plant closure and Impairments |
|
|
90 |
|
|
|
|
|
— |
|
|
|
|
|
Segment Core Results |
|
|
759 |
|
|
|
|
|
601 |
|
|
|
|
|
Midstream, Marketing and Other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Earnings |
|
|
520 |
|
|
|
|
|
367 |
|
|
|
|
|
Add: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
No significant items affecting earnings |
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
Segment Core Results |
|
|
520 |
|
|
|
|
|
367 |
|
|
|
|
|
Total Segment Core Results |
|
|
12,587 |
|
|
|
|
|
8,337 |
|
|
|
|
|
Corporate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate Results — Non Segment* |
|
|
(4,983 |
) |
|
|
|
|
(3,525 |
) |
|
|
|
|
Add: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt purchase expense |
|
|
— |
|
|
|
|
|
167 |
|
|
|
|
|
Facility closure |
|
|
— |
|
|
|
|
|
47 |
|
|
|
|
|
Gain on sale of Lyondell shares |
|
|
— |
|
|
|
|
|
(326 |
) |
|
|
|
|
Severance accrual |
|
|
— |
|
|
|
|
|
25 |
|
|
|
|
|
Tax effect of pre-tax adjustments |
|
|
(238 |
) |
|
|
|
|
2 |
|
|
|
|
|
Discontinued operations, net** |
|
|
(18 |
) |
|
|
|
|
(322 |
) |
|
|
|
|
Corporate Core Results — Non Segment |
|
|
(5,239 |
) |
|
|
|
|
(3,932 |
) |
|
|
|
|
TOTAL CORE RESULTS |
|
$ |
7,348 |
|
$ |
8.95 |
|
$ |
4,405 |
|
$ |
5.25 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* |
Interest expense, income taxes, G&A expense and other. |
|
** |
Amounts shown after tax. |
12
EXHIBIT 99.2
Occidental Petroleum Corporation
DR. RAY R. IRANI
Chairman and Chief Executive Officer
– Conference Call –
Fourth Quarter 2008 Earnings Announcement
January 29, 2009
Los Angeles, California
Thank you, Chris. Good morning, ladies and gentlemen.
Last year was an interesting year.
Oxy achieved solid results in 2008, including record earnings of $6.9 billion, an increase of 27 percent from 2007.
However, 2008 was in fact three years in one for our industry. Collectively, we experienced solid growth in the first part of the year, followed by unprecedented record-high oil prices, and finally a collapse of those prices as the global economy went into recession.
Today, I will focus on how we plan to manage and grow the business in the future, even though the current economy and low oil and gas prices make it challenging.
First, I want to mention a few developments from 2008 that will be key to Oxy’s continued success. Our growth in 2008 is indicative of our future.
Oxy’s worldwide production increased 5.4 percent over 2007, reaching 601,000 BOE per day. Even more significant was the growth in our oil and gas reserves. We estimate that we replaced approximately 200 percent of our production in 2008, without taking into account the effect of price changes from 2007 to 2008, with the majority coming through organic growth. You will receive
more information about Oxy’s reserves replacement when our 2008 numbers are finalized.
We ended the year with cash on hand of $1.8 billion and very little net debt. And in the past 12 months, we have capitalized on some key opportunities to strengthen our position and achieve further growth.
In the fourth quarter of 2008, we signed an Exploration and Production Sharing Agreement with Oman to develop four medium-sized gas fields and to explore for potential new discoveries. We expect the existing fields to reach production of 10,000 BOE per day, net to Oxy.
We have also continued production growth at the giant Mukhaizna oil field in south-central Oman, where we have a major steam flood project for enhanced oil recovery, one of our technological strengths. As of year-end 2008, gross daily production was over six times higher than the production rate in September 2005, when Oxy assumed operation of the field.
In the third quarter we signed a preliminary agreement with the Abu Dhabi National Oil Company to appraise and develop two medium-sized oil and gas fields in Abu Dhabi. Oxy will operate both fields and will hold a 100-percent interest in the concessions. When fully operational, we expect these two projects in Abu Dhabi to produce 20,000 BOE per day.
Additionally, you may have seen the recent media reports that Bahrain National Oil and Gas Authority has selected Oxy as the winner of the very competitive bid process to develop oil and gas assets in the Kingdom. Our respective teams are now finalizing the relevant technical and financial agreements. Various Bahrain agencies have already approved Oxy as the winning bidder for the project and we hope to have the completed agreement approved by the Bahrain Parliament before year-end.
2
Our strong balance sheet has also enabled additional growth of Oxy’s reserves in the Permian Basin, Mid-Continent and California. We intend to continue acquiring additional desirable assets as they become available in the U.S. at more attractive prices.
In 2008, we spent about $4.7 billion on capital expenditures. This year we plan to spend approximately $3.5 billion on projects that will allow us continued growth while protecting our targeted financial returns. We maintain a firm policy of pursuing only those opportunities which meet our standards for return on capital employed and complement our existing assets. The ongoing turbulence in the global economy only reinforces the logic of our selectivity in considering potential transactions.
Even with reduced spending, we are confident that we will grow our production in excess of 5 percent both this year and next, much of that growth from our international projects, including those I discussed earlier.
We are also currently focusing on increasing our operational efficiency throughout the company. We are reducing key cost areas including overhead, external purchasing and outside services. Steve Chazen will give you additional details in a moment.
The coming months will be challenging for all businesses in all industries. However, in good economic times and bad, Oxy is well-positioned to succeed. Oxy will continue to maintain a low-risk, low-leverage profile and a consistent focus on building stockholder value. With our concentration on core areas, growth in production and reserves, our efficient operations and our strong balance sheet, we are confident in our ability to achieve sustained growth and solid profitability.
I’ll now turn the call over to Steve Chazen.
###
3
Occidental Petroleum Corporation
STEPHEN CHAZEN
President and Chief Financial Officer
– Conference Call –
Fourth Quarter 2008 Earnings Announcement
January 29, 2009
Los Angeles, California
Thank you Ray.
Net income for the quarter was $443 million, or $0.55 per diluted share, compared to $1.5 billion, or $1.74 per diluted share in the fourth quarter of 2007. The 2008 fourth quarter net income includes after-tax non-core charges totaling $514 million. These charges included $390 million for impairment of undeveloped acreage in Argentina and Yemen, $27 million for impairment of producing oil and gas properties, $37 million for rig contract terminations and $55 million for chemical plant closure and impairments. Core results were $957 million, or $1.18 per diluted share in the fourth quarter of 2008, compared to $1.5 billion, or $1.76 per diluted share in the fourth quarter of 2007.
Here’s the segment breakdown for the fourth quarter.
Oil and gas fourth quarter 2008 segment earnings were $339 million, compared to $2.5 billion for the fourth quarter of 2007. Oil and gas core results for the fourth quarter of 2008 were $996 million, after excluding
4
asset impairments and rig termination costs. The following accounted for the decrease in oil and gas earnings between these quarters:
|
|
• |
The $1.5 billion decrease in the fourth quarter of 2008 core results was due to $1.4 billion lower crude oil and natural gas prices, a benefit of $0.1 billion for higher volumes offset by higher operating expenses, DD&A rates and exploration expense. Occidental’s average realized crude oil price in the 2008 fourth quarter was $53.52 per barrel, a decrease of 33 percent from the comparable period in 2007. Oxy’s domestic average realized gas price for the quarter was $4.67 per mcf, compared with $6.77 per mcf for the fourth quarter 2007. |
|
|
• |
Worldwide oil and gas sales volumes for the fourth quarter of 2008 were 620,000 barrels of oil equivalent per day, an increase of 5 percent, compared with 590,000 BOE in the fourth quarter of last year. The increase includes 22,000 BOE per day from the Dolphin project, 14,000 BOE per day domestically and 6,000 BOE per day from Oman, offset by 12,000 BOE per day lower production in Libya as a result of the new contract terms. |
|
|
• |
The fourth quarter of 2008 oil and gas sales volumes were 32,000 BOE per day higher than the third quarter of 2008 volumes. |
|
|
• |
Exploration expense, excluding non core items, was $134 million in the quarter. |
|
|
• |
Fourth quarter non-core items included impairments of undeveloped acreage in Argentina and Yemen, impairment of producing oil and gas properties and rig contract terminations. |
5
Chemical segment earnings for the fourth quarter of 2008 were $127 million. After excluding the plant closure and impairments, the fourth quarter 2008 core results were $217 million. The higher earnings were attributable primarily to higher caustic soda margins. Chemicals earned $94 million in last year’s fourth quarter.
Midstream segment earnings for the fourth quarter of 2008 were $170 million, an increase of $32 million from the fourth quarter of 2007 results. The improvement in earnings was due to higher margins in crude oil marketing, higher pipeline income from Dolphin and lower NGL margins in the gas processing business.
Fourth quarter 2008 results also included after-tax foreign exchange gains of $88 million of which $70 million was in oil and gas.
Let me now turn to Occidental’s performance during the twelve months.
Net income was a record $6.9 billion, or $8.35 per diluted share for the twelve months of 2008, compared with $5.4 billion, or $6.44 per diluted share for the same period of 2007. Core results for the twelve months of 2008 were $7.3 billion, or $8.95 per diluted share, compared with $4.4 billion, or $5.25 per diluted share for the full year 2007. Income for the twelve months of 2008 included $491 million of charges, net of tax and 2007 included a $1 billion benefit, net of tax, for the items noted on the schedule reconciling net income to core results.
We have broken out oil and gas production taxes and ad valorem taxes into a separate line item called “taxes - other than on income,” for disclosure purposes to highlight their sensitivity to product price variations. These taxes were $2.62 a barrel in 2008 compared with $1.97 a barrel for 2007. Oil and gas cash production costs (after exclusion of the taxes described above) were
6
$12.13 a barrel for the twelve months of 2008, compared to last year’s costs of $10.37 a barrel. The bulk of the increase is related to higher maintenance, workovers and field operating costs.
Reserves
We currently estimate that we replaced approximately 200 percent of our oil and gas production in 2008, without taking into account the effect of price changes from 2007 to 2008. With the effect of price changes, we estimate we replaced about 150 percent of our production. Slightly over half of the reserve additions, excluding the effect of price changes, came from internal sources resulting in over 100 percent reserve replacement. Major increases were in the California properties, Permian and the Rockies, and in Oman, which in aggregate constituted more than half of such reserve adds.
Capital Spending
Last year’s capital program was about $4.7 billion. Additionally, we spent another $4.7 billion for acquisitions. As a result of these expenditures, we have accumulated a sizeable inventory of projects. The bulk of these projects can be delayed until such time as the industry cost structure is in line with product prices. We believe that the service company cost structure is more reflective of an $80 oil environment rather than a $40 one. An illustration of our ability to defer drilling is that we have a total of 5 million net acres in the United States. 70 percent is held by production, about 10 percent consists of long-term leases, with many years on average to run, and the remainder in mineral acres held in perpetuity.
This year’s capital program of $3.5 billion will focus on ensuring that our returns remain well above our cost of capital given current oil and gas prices and contractor costs. About 80 percent of the capital will be in oil and gas and the remainder in midstream and chemical. Gas drilling with less
7
than $5.00 per mcf gas is unattractive. We will continue to fully fund much of our Middle East operations, our successful exploration programs in California and Utah, and our exploration in Argentina. Formerly "quick payout" wells in the Permian and California will be deferred until they become "quick payout" again. We will also continue to fund our midstream and CO2 programs.
You should expect that our capital run rate in the first quarter will be greater than the $3.5 billion level and will decline all year unless economic conditions improve. The effect of this program on our production should be fairly modest this year, around 10,000 BOE per day, resulting in a probable production range of 620,000 to 660,000 BOE per day and with about 630,000 to 650,000 BOE per day in the first quarter. Year-over-year, Argentina and Oman will show the most growth.
We are also focusing on internal costs. Some reductions in overhead will be made this year which should improve our overhead levels by at least $1.00 per BOE. We are renegotiating our supplier contracts to further reduce costs and are laying down rigs, including paying cancellation costs when that makes sense. We expect these efforts to result in a reduction in the cost of executing our capital programs, as well as, a reduction of our operating expenses.
Oxy’s focus has been and will continue to be delivering returns well in excess of our cost of capital. When costs and prices are inline, our capital program will be boosted and the project inventory worked down faster.
Cash Flow
Cash flow from operations for the twelve months was $10.7 billion. We used $4.7 billion of the company’s cash flow to fund capital expenditures, $4.7 billion for acquisitions and $940 million to pay
8
dividends. We spent $1.5 billion to repurchase 19.4 million common shares and we borrowed $1 billion in the fourth quarter. These and other net cash outflows decreased our $2.0 billion cash balance at the end of last year by $200 million to $1.8 billion at December 31.
The weighted average basic shares outstanding for the twelve months were 817.6 million and the weighted average diluted shares outstanding were 820.8 million. At December 31, there were 810.4 million basic shares outstanding and the diluted share amount was approximately 813.5 million.
Our debt to capitalization ratio was 9 percent. Oxy’s 2008 return on equity was 27 percent, with return on capital employed of 25 percent.
As we look ahead in the current quarter:
|
|
• |
We expect exploration expense to be about $60 million. |
|
|
• |
We expect chemical segment earnings for the first quarter to be $100 million. High caustic soda margins are expected to continue through the period offset by the continued weakness in the construction and housing markets impacting domestic demand. Despite the difficult economic conditions, exports are anticipated to show modest improvement over the abysmal demand of the fourth quarter. |
|
|
• |
The worldwide effective tax rate on core income was 40 percent for 2008. We expect our combined worldwide tax rate in the first quarter of 2009, to be about 46 percent. The increase in the rate from the prior year is caused by higher foreign-sourced income expected in 2009 as a percentage of total income. Our fourth quarter and twelve-month U. S. and foreign tax rates are included in the “Investor Relations Supplemental Schedule.” |
9
|
|
• |
Our Oil & Gas DD&A expense for 2009 should be approximately $11.50 per BOE. Depreciation for the other two segments should be approximately $400 million. |
|
|
• |
We expect to have severance and similar charges in the first quarter of 2009. |
|
|
• |
Copies of the press release announcing our fourth quarter earnings and the Investor Relations Supplemental Schedules are available on our website at www.oxy.com or through the SEC’s EDGAR system. |
Now we’re ready to take your questions.
10
Occidental Petroleum Corporation
Return on Capital Employed (% )
($ Millions)
|
Reconciliation to Generally Accepted Accounting Principles (GAAP) |
|
2007 |
2008 |
|
|
|
| ||||
|
GAAP measure - earnings applicable to common shareholders |
|
|
5,400 |
|
|
6,857 |
|
|
|
|
|
|
Interest expense |
|
|
199 |
|
|
26 |
|
|
|
|
|
|
Tax effect of interest expense |
|
|
(70 |
) |
|
(9 |
) |
|
|
|
|
|
Earnings before tax-effected interest expense |
|
|
5,529 |
|
|
6,874 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP stockholders' equity |
|
|
22,823 |
|
|
27,300 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DEBT |
|
|
|
|
|
|
|
|
|
|
|
|
GAAP debt |
|
|
|
|
|
|
|
|
|
|
|
|
Debt, including current maturities |
|
|
1,788 |
|
|
2,747 |
|
|
|
|
|
|
Non-GAAP debt |
|
|
|
|
|
|
|
|
|
|
|
|
Capital lease obligation |
|
|
25 |
|
|
25 |
|
|
|
|
|
|
Subsidiary preferred stock |
|
|
- |
|
|
- |
|
|
|
|
|
|
Total debt |
|
|
1,813 |
|
|
2,772 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total capital employed |
|
|
24,636 |
|
|
30,072 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on Capital Employed (%) |
|
|
23.6 |
|
|
25.1 |
|
|
|
|
|
EXHIBIT 99.3
Investor Relations Supplemental Schedules
Investor Relations Supplemental Schedules
Summary
($ Millions)
|
|
4Q 2008 |
4Q 2007 |
|
|
|
|
|
Reported Net Income |
$443 |
$1,452 |
|
EPS - Diluted |
$0.55 |
$1.74 |
|
|
|
|
|
Core Results |
$957 |
$1,464 |
|
EPS - Diluted |
$1.18 |
$1.76 |
|
|
|
|
|
Total Worldwide Sales Volumes (mboe/day) |
620 |
590 |
|
Total Worldwide Production (mboe/day) |
623 |
588 |
|
|
|
|
|
Total Worldwide Crude Oil Realizations ($/BBL) |
$53.52 |
$80.30 |
|
Domestic Natural Gas Realizations ($/MCF) |
$4.67 |
$6.77 |
|
|
|
|
|
Wtd. Average Basic Shares O/S (mm) |
810.3 |
828.4 |
|
Wtd. Average Diluted Shares O/S (mm) |
811.6 |
833.1 |
|
|
|
|
|
|
|
|
|
|
YTD 2008 |
YTD 2007 |
|
|
|
|
|
Reported Net Income |
$6,857 |
$5,400 |
|
EPS - Diluted |
$8.35 |
$6.44 |
|
|
|
|
|
Core Results |
$7,348 |
$4,405 |
|
EPS - Diluted |
$8.95 |
$5.25 |
|
|
|
|
|
Total Worldwide Sales Volumes (mboe/day) |
601 |
570 |
|
Total Worldwide Production (mboe/day) |
603 |
567 |
|
|
|
|
|
Total Worldwide Crude Oil Realizations ($/BBL) |
$88.26 |
$64.77 |
|
Domestic Natural Gas Realizations ($/MCF) |
$8.03 |
$6.53 |
|
|
|
|
|
Wtd. Average Basic Shares O/S (mm) |
817.6 |
834.9 |
|
Wtd. Average Diluted Shares O/S (mm) |
820.8 |
839.1 |
|
|
|
|
|
Shares Outstanding (mm) |
810.2 |
825.7 |
|
|
|
|
|
Cash Flow from Operations |
$10,700 |
$6,800 |
1
Investor Relations Supplemental Schedules
OCCIDENTAL PETROLEUM
2008 Fourth Quarter
Net Income (Loss)
($ millions)
|
|
Reported Income |
|
Significant Items Affecting Income |
|
Core Results | ||||||||
|
Oil & Gas |
$ |
339 |
|
|
$ |
58 |
|
|
Rig contract terminations |
|
|
996 |
|
|
|
|
|
|
|
|
599 |
|
|
Asset impairments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chemical |
|
127 |
|
|
|
90 |
|
|
Plant closure and impairments |
|
|
217 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Midstream, marketing and other |
|
170 |
|
|
|
|
|
|
|
|
|
170 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
(16 |
) |
|
|
|
|
|
|
|
|
(16 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other |
|
(54 |
) |
|
|
|
|
|
|
|
|
(54 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxes |
|
(118 |
) |
|
|
(238 |
) |
|
Tax effect of adjustments |
|
|
(356 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations |
|
448 |
|
|
|
509 |
|
|
|
|
|
957 |
|
|
Discontinued operations, net of tax |
|
(5 |
) |
|
|
5 |
|
|
Discontinued operations, net |
|
— |
| |
|
Net Income |
$ |
443 |
|
|
$ |
514 |
|
|
|
|
$ |
957 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic Earnings Per Common Share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations |
$ |
0.55 |
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations, net |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
Net Income |
$ |
0.55 |
|
|
|
|
|
|
|
|
$ |
1.18 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings Per Common Share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations |
$ |
0.55 |
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations, net |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
Net Income |
$ |
0.55 |
|
|
|
|
|
|
|
|
$ |
1.18 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2
Investor Relations Supplemental Schedules
OCCIDENTAL PETROLEUM
2007 Fourth Quarter
Net Income (Loss)
($ millions)
|
|
Reported Income |
|
Significant Items Affecting Income |
|
Core Results | ||||||||
|
Oil & Gas |
$ |
2,461 |
|
|
|
|
|
|
|
|
$ |
2,461 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chemical |
|
94 |
|
|
|
|
|
|
|
|
|
94 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Midstream, marketing and other |
|
138 |
|
|
|
|
|
|
|
|
|
138 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
(13 |
) |
|
|
|
|
|
|
|
|
(13 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other |
|
(175 |
) |
|
|
25 |
|
|
Severance |
|
|
(150 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxes |
|
(1,057 |
) |
|
|
(9 |
) |
|
Tax effect of adjustments |
|
|
(1,066 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations |
|
1,448 |
|
|
|
16 |
|
|
|
|
|
1,464 |
|
|
Discontinued operations, net of tax |
|
4 |
|
|
|
(4 |
) |
|
Discontinued operations, net |
|
— |
| |
|
Net Income |
$ |
1,452 |
|
|
$ |
12 |
|
|
|
|
$ |
1,464 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic Earnings Per Common Share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations |
$ |
1.75 |
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations, net of tax |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
Net Income |
$ |
1.75 |
|
|
|
|
|
|
|
|
$ |
1.77 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings Per Common Share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations |
$ |
1.74 |
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations, net of tax |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
Net Income |
$ |
1.74 |
|
|
|
|
|
|
|
|
$ |
1.76 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3
Investor Relations Supplemental Schedules
OCCIDENTAL PETROLEUM
2008 Total Year
Net Income (Loss)
($ millions)
|
|
Reported Income |
|
Significant Items Affecting Income |
|
Core Results | ||||||||
|
Oil & Gas |
$ |
10,651 |
|
|
$ |
58 |
|
|
Rig contract terminations |
|
$ |
11,308 |
|
|
|
|
|
|
|
|
599 |
|
|
Asset impairments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chemical |
|
669 |
|
|
|
90 |
|
|
Plant closure and impairments |
|
|
759 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Midstream, marketing and other |
|
520 |
|
|
|
|
|
|
|
|
|
520 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
(26 |
) |
|
|
|
|
|
|
|
|
(26 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other |
|
(346 |
) |
|
|
|
|
|
|
|
|
(346 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxes |
|
(4,629 |
) |
|
|
(238 |
) |
|
Tax effect of adjustments |
|
|
(4,867 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations |
|
6,839 |
|
|
|
509 |
|
|
|
|
|
7,348 |
|
|
Discontinued operations, net of tax |
|
18 |
|
|
|
(18 |
) |
|
Discontinued operations, net |
|
— |
| |
|
Net Income |
$ |
6,857 |
|
|
$ |
491 |
|
|
|
|
$ |
7,348 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic Earnings Per Common Share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations |
$ |
8.37 |
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations, net |
|
0.02 |
|
|
|
|
|
|
|
|
|
|
|
|
Net Income |
$ |
8.39 |
|
|
|
|
|
|
|
|
$ |
8.99 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings Per Common Share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations |
$ |
8.33 |
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations, net |
|
0.02 |
|
|
|
|
|
|
|
|
|
|
|
|
Net Income |
$ |
8.35 |
|
|
|
|
|
|
|
|
$ |
8.95 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4
Investor Relations Supplemental Schedules
OCCIDENTAL PETROLEUM
2007 Total Year
Net Income (Loss)
($ millions)
|
|
Reported Income |
|
Significant Items Affecting Income |
|
Core Results | ||||||||
|
Oil & Gas |
$ |
7,957 |
|
|
$ |
(412 |
) |
|
Sale of Russian operations |
|
$ |
7,369 |
|
|
|
|
|
|
|
|
(112 |
) |
|
Legal settlements |
|
|
|
|
|
|
|
|
|
|
|
(103 |
) |
|
Sale of exploration properties |
|
|
|
|
|
|
|
|
|
|
|
(35 |
) |
|
Sale of oil & gas interests |
|
|
|
|
|
|
|
|
|
|
|
74 |
|
|
Exploration impairments |
|
|
|
|
|
Chemical |
|
601 |
|
|
|
|
|
|
|
|
|
601 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Midstream, marketing and other |
|
367 |
|
|
|
|
|
|
|
|
|
367 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
(199 |
) |
|
|
167 |
|
|
Debt purchases |
|
|
(32 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other |
|
(141 |
) |
|
|
(326 |
) |
|
Sale of Lyondell shares |
|
|
(395 |
) |
|
|
|
|
|
|
|
25 |
|
|
Severance charge |
|
|
|
|
|
|
|
|
|
|
|
47 |
|
|
Facility closure |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxes |
|
(3,507 |
) |
|
|
2 |
|
|
Tax effect of adjustments |
|
|
(3,505 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations |
|
5,078 |
|
|
|
(673 |
) |
|
|
|
|
4,405 |
|
|
Discontinued operations, net of tax |
|
322 |
|
|
|
(322 |
) |
|
Discontinued operations, net |
|
— |
| |
|
Net Income |
$ |
5,400 |
|
|
$ |
(995 |
) |
|
|
|
$ |
4,405 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic Earnings Per Common Share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations |
$ |
6.08 |
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations, net of tax |
|
0.39 |
|
|
|
|
|
|
|
|
|
|
|
|
Net Income |
$ |
6.47 |
|
|
|
|
|
|
|
|
$ |
5.28 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings Per Common Share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations |
$ |
6.05 |
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations, net of tax |
|
0.39 |
|
|
|
|
|
|
|
|
|
|
|
|
Net Income |
$ |
6.44 |
|
|
|
|
|
|
|
|
$ |
5.25 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5
Investor Relations Supplemental Schedules
OCCIDENTAL PETROLEUM
Items Affecting Comparability of Core Results Between Periods
The item(s) below are included in core results and are shown in this table because they affect the comparability between periods.
|
Pre-tax |
|
|
|
|
|
|
|
|
|
|
|
|
Income / (Expense) |
Fourth Quarter |
|
12 Months | ||||||||
|
|
2008 |
|
2007 |
|
2008 |
|
2007 | ||||
|
Corporate |
|
|
|
|
|
|
|
|
|
|
|
|
Foreign Exchange Gains & (Losses)* |
88 |
|
|
5 |
|
|
91 |
|
|
(18 |
) |
*Amounts shown after tax
6
Investor Relations Supplemental Schedules
OCCIDENTAL PETROLEUM
Worldwide Effective Tax Rate
|
|
QUARTERLY |
|
YEAR TO-DATE | |||||||||||
|
|
2008 |
|
2008 |
|
2007 |
|
2008 |
|
2007 | |||||
|
REPORTED INCOME |
QTR 4 |
|
QTR 3 |
|
QTR 4 |
|
12 Months |
|
12 Months | |||||
|
Oil & Gas (a) |
339 |
|
|
3,618 |
|
|
2,461 |
|
|
10,651 |
|
|
7,957 |
|
|
Chemicals |
127 |
|
|
219 |
|
|
94 |
|
|
669 |
|
|
601 |
|
|
Midstream, marketing and other |
170 |
|
|
66 |
|
|
138 |
|
|
520 |
|
|
367 |
|
|
Corporate |
(70 |
) |
|
(85 |
) |
|
(188 |
) |
|
(372 |
) |
|
(340 |
) |
|
Pre-tax income |
566 |
|
|
3,818 |
|
|
2,505 |
|
|
11,468 |
|
|
8,585 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal and state |
65 |
|
|
716 |
|
|
473 |
|
|
2,188 |
|
|
1,558 |
|
|
Foreign (a) |
53 |
|
|
830 |
|
|
584 |
|
|
2,441 |
|
|
1,949 |
|
|
Total |
118 |
|
|
1,546 |
|
|
1,057 |
|
|
4,629 |
|
|
3,507 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations |
448 |
|
|
2,272 |
|
|
1,448 |
|
|
6,839 |
|
|
5,078 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Worldwide effective tax rate |
21% |
|
40% |
|
42% |
|
40% |
|
41% | |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2008 |
|
2008 |
|
2007 |
|
2008 |
|
2007 | |||||
|
CORE RESULTS |
QTR 4 |
|
QTR 3 |
|
QTR 4 |
|
12 Months |
|
12 Months | |||||
|
Oil & Gas (a) |
996 |
|
|
3,618 |
|
|
2,461 |
|
|
11,308 |
|
|
7,369 |
|
|
Chemicals |
217 |
|
|
219 |
|
|
94 |
|
|
759 |
|
|
601 |
|
|
Midstream, marketing and other |
170 |
|
|
66 |
|
|
138 |
|
|
520 |
|
|
367 |
|
|
Corporate |
(70 |
) |
|
(85 |
) |
|
(163 |
) |
|
(372 |
) |
|
(427 |
) |
|
Pre-tax income |
1,313 |
|
|
3,818 |
|
|
2,530 |
|
|
12,215 |
|
|
7,910 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal and state |
131 |
|
|
716 |
|
|
482 |
|
|
2,254 |
|
|
1,556 |
|
|
Foreign (a) |
225 |
|
|
830 |
|
|
584 |
|
|
2,613 |
|
|
1,949 |
|
|
Total |
356 |
|
|
1,546 |
|
|
1,066 |
|
|
4,867 |
|
|
3,505 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core results |
957 |
|
|
2,272 |
|
|
1,464 |
|
|
7,348 |
|
|
4,405 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Worldwide effective tax rate |
27% |
|
40% |
|
42% |
|
40% |
|
44% | |||||
(a) Revenues and income tax expense include taxes owed by Occidental but paid by governmental entities on its behalf. Oil and gas pre-tax income includes the following revenue amounts by periods.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2008 |
|
2008 |
|
2007 |
|
2008 |
|
2007 | |||||
|
|
QTR 4 |
|
QTR 3 |
|
QTR 4 |
|
12 Months |
|
12 Months | |||||
|
|
250 |
|
|
731 |
|
|
406 |
|
|
2,051 |
|
|
1,325 |
|
7
Investor Relations Supplemental Schedules
OCCIDENTAL PETROLEUM
2008 Fourth Quarter Net Income (Loss)
Reported Income Comparison
|
|
Fourth |
|
Third |
|
|
|
| ||||
|
|
Quarter |
|
Quarter |
|
|
|
| ||||
|
|
2008 |
|
2008 |
|
B / (W) | ||||||
|
Oil & Gas |
$ |
339 |
|
|
$ |
3,618 |
|
|
$ |
(3,279 |
) |
|
Chemical |
|
127 |
|
|
|
219 |
|
|
|
(92 |
) |
|
Midstream, marketing and other |
|
170 |
|
|
|
66 |
|
|
|
104 |
|
|
Corporate |
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
(16 |
) |
|
|
(3 |
) |
|
|
(13 |
) |
|
Other |
|
(54 |
) |
|
|
(82 |
) |
|
|
28 |
|
|
Taxes |
|
(118 |
) |
|
|
(1,546 |
) |
|
|
1,428 |
|
|
Income from continuing operations |
|
448 |
|
|
|
2,272 |
|
|
|
(1,824 |
) |
|
Discontinued operations, net |
|
(5 |
) |
|
|
(1 |
) |
|
|
(4 |
) |
|
Net Income |
$ |
443 |
|
|
$ |
2,271 |
|
|
$ |
(1,828 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings Per Common Share |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.55 |
|
|
$ |
2.79 |
|
|
$ |
(2.24 |
) |
|
Diluted |
$ |
0.55 |
|
|
$ |
2.78 |
|
|
$ |
(2.23 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Worldwide Effective Tax Rate |
|
21% |
|
|
40% |
|
|
19% | |||
|
|
|
|
|
|
|
|
|
|
|
|
|
OCCIDENTAL PETROLEUM
2008 Fourth Quarter Net Income (Loss)
Core Results Comparison
|
|
Fourth |
|
Third |
|
|
|
| ||||
|
|
Quarter |
|
Quarter |
|
|
|
| ||||
|
|
2008 |
|
2008 |
|
B / (W) | ||||||
|
Oil & Gas |
$ |
996 |
|
|
$ |
3,618 |
|
|
$ |
(2,622 |
) |
|
Chemical |
|
217 |
|
|
|
219 |
|
|
|
(2 |
) |
|
Midstream, marketing and other |
|
170 |
|
|
|
66 |
|
|
|
104 |
|
|
Corporate |
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
(16 |
) |
|
|
(3 |
) |
|
|
(13 |
) |
|
Other |
|
(54 |
) |
|
|
(82 |
) |
|
|
28 |
|
|
Taxes |
|
(356 |
) |
|
|
(1,546 |
) |
|
|
1,190 |
|
|
Core Results |
$ |
957 |
|
|
$ |
2,272 |
|
|
$ |
(1,315 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core Results Per Common Share |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
1.18 |
|
|
$ |
2.79 |
|
|
$ |
(1.61 |
) |
|
Diluted |
$ |
1.18 |
|
|
$ |
2.78 |
|
|
$ |
(1.60 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Worldwide Effective Tax Rate |
|
27% |
|
|
40% |
|
|
13% | |||
|
|
|
|
|
|
|
|
|
|
|
|
|
8
Investor Relations Supplemental Schedules
OCCIDENTAL PETROLEUM
Oil & Gas
Variance Analysis 4Q08 vs. 3Q08
($ Millions)
*Includes foreign tax liability f/x gains of $76 million
OCCIDENTAL PETROLEUM
Chemical
Variance Analysis 4Q08 vs. 3Q08
($ Millions)
*Lower energy and feedstock costs
9
Investor Relations Supplemental Schedules
OCCIDENTAL PETROLEUM
2008 Fourth Quarter Net Income (Loss)
Reported Income Comparison
|
|
Fourth |
|
Fourth |
|
|
|
| ||||
|
|
Quarter |
|
Quarter |
|
|
|
| ||||
|
|
2008 |
|
2007 |
|
B / (W) | ||||||
|
Oil & Gas |
$ |
339 |
|
|
$ |
2,461 |
|
|
$ |
(2,122 |
) |
|
Chemical |
|
127 |
|
|
|
94 |
|
|
|
33 |
|
|
Midstream, marketing and other |
|
170 |
|
|
|
138 |
|
|
|
32 |
|
|
Corporate |
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
(16 |
) |
|
|
(13 |
) |
|
|
(3 |
) |
|
Other |
|
(54 |
) |
|
|
(175 |
) |
|
|
121 |
|
|
Taxes |
|
(118 |
) |
|
|
(1,057 |
) |
|
|
939 |
|
|
Income from continuing operations |
|
448 |
|
|
|
1,448 |
|
|
|
(1,000 |
) |
|
Discontinued operations, net |
|
(5 |
) |
|
|
4 |
|
|
|
(9 |
) |
|
Net Income |
$ |
443 |
|
|
$ |
1,452 |
|
|
$ |
(1,009 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings Per Common Share |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.55 |
|
|
$ |
1.75 |
|
|
$ |
(1.20 |
) |
|
Diluted |
$ |
0.55 |
|
|
$ |
1.74 |
|
|
$ |
(1.19 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Worldwide Effective Tax Rate |
|
21% |
|
|
42% |
|
|
21% | |||
|
|
|
|
|
|
|
|
|
|
|
|
|
OCCIDENTAL PETROLEUM
2008 Fourth Quarter Net Income (Loss)
Core Results Comparison
|
|
Fourth |
|
Fourth |
|
|
|
| ||||
|
|
Quarter |
|
Quarter |
|
|
|
| ||||
|
|
2008 |
|
2007 |
|
B / (W) | ||||||
|
Oil & Gas |
$ |
996 |
|
|
$ |
2,461 |
|
|
$ |
(1,465 |
) |
|
Chemical |
|
217 |
|
|
|
94 |
|
|
|
123 |
|
|
Midstream, marketing and other |
|
170 |
|
|
|
138 |
|
|
|
32 |
|
|
Corporate |
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
(16 |
) |
|
|
(13 |
) |
|
|
(3 |
) |
|
Other |
|
(54 |
) |
|
|
(150 |
) |
|
|
96 |
|
|
Taxes |
|
(356 |
) |
|
|
(1,066 |
) |
|
|
710 |
|
|
Core Results |
$ |
957 |
|
|
$ |
1,464 |
|
|
$ |
(507 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core Results Per Common Share |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
1.18 |
|
|
$ |
1.77 |
|
|
$ |
(0.59 |
) |
|
Diluted |
$ |
1.18 |
|
|
$ |
1.76 |
|
|
$ |
(0.58 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Worldwide Effective Tax Rate |
|
27% |
|
|
42% |
|
|
15% | |||
|
|
|
|
|
|
|
|
|
|
|
|
|
10
Investor Relations Supplemental Schedules
OCCIDENTAL PETROLEUM
Oil & Gas
Variance Analysis 4Q08 vs. 4Q07
($ Millions)
* DD&A rate increase and higher operating expenses
OCCIDENTAL PETROLEUM
Chemical
Variance Analysis 4Q08 vs. 4Q07
($ Millions)
* Lower feedstock costs
11
Investor Relations Supplemental Schedules
OCCIDENTAL PETROLEUM
SUMMARY OF OPERATING STATISTICS
|
|
|
Fourth Quarter |
|
Twelve Months | ||||||||
|
|
|
2008 |
|
2007 |
|
2008 |
|
2007 | ||||
|
SALES VOLUMES PER DAY: |
|
|
|
|
|
|
|
|
|
|
|
|
|
United States |
|
|
|
|
|
|
|
|
|
|
|
|
|
Crude Oil and Liquids (MBL) |
|
|
|
|
|
|
|
|
|
|
|
|
|
California |
|
97 |
|
|
88 |
|
|
89 |
|
|
89 |
|
|
Permian |
|
167 |
|
|
170 |
|
|
168 |
|
|
167 |
|
|
Midcontinent and Rockies |
|
9 |
|
|
4 |
|
|
6 |
|
|
4 |
|
|
Total |
|
273 |
|
|
262 |
|
|
263 |
|
|
260 |
|
|
Natural Gas (MMCF) |
|
|
|
|
|
|
|
|
|
|
|
|
|
California |
|
221 |
|
|
250 |
|
|
235 |
|
|
254 |
|
|
Permian |
|
188 |
|
|
180 |
|
|
181 |
|
|
186 |
|
|
Midcontinent and Rockies |
|
187 |
|
|
148 |
|
|
171 |
|
|
153 |
|
|
Total |
|
596 |
|
|
578 |
|
|
587 |
|
|
593 |
|
|
Latin America |
|
|
|
|
|
|
|
|
|
|
|
|
|
Crude Oil (MBL) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Argentina |
|
32 |
|
|
31 |
|
|
32 |
|
|
32 |
|
|
Colombia |
|
45 |
|
|
41 |
|
|
43 |
|
|
42 |
|
|
Total |
|
77 |
|
|
72 |
|
|
75 |
|
|
74 |
|
|
Natural Gas (MMCF) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Argentina |
|
24 |
|
|
19 |
|
|
21 |
|
|
22 |
|
|
Bolivia |
|
21 |
|
|
22 |
|
|
21 |
|
|
18 |
|
|
Total |
|
45 |
|
|
41 |
|
|
42 |
|
|
40 |
|
|
Middle East / North Africa |
|
|
|
|
|
|
|
|
|
|
|
|
|
Crude Oil and Liquids (MBL) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Oman |
|
27 |
|
|
20 |
|
|
23 |
|
|
20 |
|
|
Dolphin |
|
23 |
|
|
14 |
|
|
21 |
|
|
4 |
|
|
Qatar |
|
48 |
|
|
52 |
|
|
47 |
|
|
48 |
|
|
Yemen |
|
20 |
|
|
22 |
|
|
21 |
|
|
25 |
|
|
Libya |
|
10 |
|
|
22 |
|
|
15 |
|
|
22 |
|
|
Total |
|
128 |
|
|
130 |
|
|
127 |
|
|
119 |
|
|
Natural Gas (MMCF) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Oman |
|
23 |
|
|
30 |
|
|
24 |
|
|
30 |
|
|
Dolphin |
|
209 |
|
|
133 |
|
|
184 |
|
|
51 |
|
|
Total |
|
232 |
|
|
163 |
|
|
208 |
|
|
81 |
|
|
Barrels of Oil Equivalent (MBOE) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal consolidated subsidiaries |
|
624 |
|
|
594 |
|
|
605 |
|
|
573 |
|
|
Other interests |
|
|
|
|
|
|
|
|
|
|
|
|
|
Colombia - minority interest |
|
(6 |
) |
|
(6 |
) |
|
(6 |
) |
|
(5 |
) |
|
Yemen - Occidental net interest |
|
2 |
|
|
2 |
|
|
2 |
|
|
2 |
|
|
Total worldwide sales - MBOE |
|
620 |
|
|
590 |
|
|
601 |
|
|
570 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12
Investor Relations Supplemental Schedules
OCCIDENTAL PETROLEUM
SUMMARY OF OPERATING STATISTICS
|
|
|
Fourth Quarter |
|
Twelve Months | ||||||||
|
|
|
2008 |
|
2007 |
|
2008 |
|
2007 | ||||
|
NET PRODUCTION PER DAY: |
|
|
|
|
|
|
|
|
|
|
|
|
|
United States |
|
|
|
|
|
|
|
|
|
|
|
|
|
Crude Oil and Liquids (MBL) |
|
273 |
|
|
262 |
|
|
263 |
|
|
260 |
|
|
Natural Gas (MMCF) |
|
596 |
|
|
578 |
|
|
587 |
|
|
593 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Latin America |
|
|
|
|
|
|
|
|
|
|
|
|
|
Crude Oil (MBL) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Argentina |
|
38 |
|
|
32 |
|
|
34 |
|
|
33 |
|
|
Colombia |
|
45 |
|
|
41 |
|
|
44 |
|
|
42 |
|
|
Total |
|
83 |
|
|
73 |
|
|
78 |
|
|
75 |
|
|
Natural Gas (MMCF) |
|
45 |
|
|
41 |
|
|
42 |
|
|
40 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Middle East / North Africa |
|
|
|
|
|
|
|
|
|
|
|
|
|
Crude Oil and Liquids (MBL) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Oman |
|
28 |
|
|
20 |
|
|
23 |
|
|
19 |
|
|
Dolphin |
|
22 |
|
|
14 |
|
|
20 |
|
|
5 |
|
|
Qatar |
|
48 |
|
|
51 |
|
|
47 |
|
|
47 |
|
|
Yemen |
|
20 |
|
|
22 |
|
|
21 |
|
|
25 |
|
|
Libya |
|
8 |
|
|
20 |
|
|
15 |
|
|
21 |
|
|
Total |
|
126 |
|
|
127 |
|
|
126 |
|
|
117 |
|
|
Natural Gas (MMCF) |
|
232 |
|
|
163 |
|
|
208 |
|
|
81 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Barrels of Oil Equivalent (MBOE) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal consolidated subsidiaries |
|
627 |
|
|
592 |
|
|
607 |
|
|
571 |
|
|
Other interests |
|
|
|
|
|
|
|
|
|
|
|
|
|
Colombia - minority interest |
|
(6 |
) |
|
(6 |
) |
|
(6 |
) |
|
(6 |
) |
|
Yemen - Occidental net interest |
|
2 |
|
|
2 |
|
|
2 |
|
|
2 |
|
|
Total worldwide production - MBOE |
|
623 |
|
|
588 |
|
|
603 |
|
|
567 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13
Investor Relations Supplemental Schedules
OCCIDENTAL PETROLEUM
SUMMARY OF OPERATING STATISTICS
|
|
|
Fourth Quarter |
|
Twelve Months | ||||||||||||
|
|
|
2008 |
|
2007 |
|
2008 |
|
2007 | ||||||||
|
OIL & GAS: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PRICES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United States |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Crude Oil ($/BBL) |
|
|
52.64 |
|
|
|
83.17 |
|
|
|
91.16 |
|
|
|
65.67 |
|
|
Natural gas ($/MCF) |
|
|
4.67 |
|
|
|
6.77 |
|
|
|
8.03 |
|
|
|
6.53 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Latin America |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Crude Oil ($/BBL) |
|
|
47.48 |
|
|
|
67.92 |
|
|
|
70.53 |
|
|
|
56.66 |
|
|
Natural Gas ($/MCF) |
|
|
4.99 |
|
|
|
3.69 |
|
|
|
4.43 |
|
|
|
2.66 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Middle East / North Africa |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Crude Oil ($/BBL) |
|
|
59.09 |
|
|
|
83.88 |
|
|
|
94.70 |
|
|
|
69.24 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Worldwide |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Crude Oil ($/BBL) |
|
|
53.52 |
|
|
|
80.30 |
|
|
|
88.26 |
|
|
|
64.77 |
|
|
Natural Gas ($/MCF) |
|
|
3.72 |
|
|
|
5.41 |
|
|
|
6.10 |
|
|
|
5.68 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fourth Quarter |
|
Twelve Months | ||||||||||||
|
|
|
2008 |
|
2007 |
|
2008 |
|
2007 | ||||||||
|
Exploration Expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Domestic |
|
$ |
53 |
|
|
$ |
21 |
|
|
$ |
95 |
|
|
$ |
121 |
|
|
Latin America |
|
|
18 |
|
|
|
16 |
|
|
|
53 |
|
|
|
52 |
|
|
Middle East / North Africa |
|
|
142 |
|
|
|
57 |
|
|
|
259 |
|
|
|
219 |
|
|
Other Eastern Hemisphere |
|
|
2 |
|
|
|
7 |
|
|
|
1 |
|
|
|
30 |
|
|
TOTAL REPORTED |
|
$ |
215 |
|
|
$ |
101 |
|
|
$ |
408 |
|
|
$ |
422 |
|
|
Less - non-core impairments |
|
|
(81 |
) |
|
|
— |
|
|
|
(81 |
) |
|
|
(58 |
) |
|
TOTAL CORE |
|
$ |
134 |
|
|
$ |
101 |
|
|
$ |
327 |
|
|
$ |
364 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14
Investor Relations Supplemental Schedules
OCCIDENTAL PETROLEUM
SUMMARY OF OPERATING STATISTICS
|
|
|
Fourth Quarter |
|
Twelve Months | ||||||||
|
Capital Expenditures ($MM) |
|
2008 |
|
2007 |
|
2008 |
|
2007 | ||||
|
Oil & Gas |
|
|
|
|
|
|
|
|
|
|
|
|
|
California |
|
$ |
244 |
|
$ |
140 |
|
$ |
802 |
|
$ |
573 |
|
Permian |
|
|
207 |
|
|
77 |
|
|
485 |
|
|
367 |
|
Other U.S. |
|
|
149 |
|
|
59 |
|
|
389 |
|
|
201 |
|
Latin America |
|
|
301 |
|
|
192 |
|
|
848 |
|
|
508 |
|
Middle East / North Africa |
|
|
323 |
|
|
249 |
|
|
1,058 |
|
|
1,059 |
|
Exploration |
|
|
107 |
|
|
36 |
|
|
263 |
|
|
157 |
|
Chemicals |
|
|
86 |
|
|
107 |
|
|
240 |
|
|
245 |
|
Midstream, marketing and other |
|
|
160 |
|
|
83 |
|
|
492 |
|
|
243 |
|
Corporate |
|
|
17 |
|
|
3 |
|
|
87 |
|
|
7 |
|
TOTAL |
|
$ |
1,594 |
|
$ |
946 |
|
$ |
4,664 |
|
$ |
3,360 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation, Depletion & |
|
Fourth Quarter |
|
Twelve Months | ||||||||
|
Amortization of Assets ($MM) |
|
2008 |
|
2007 |
|
2008 |
|
2007 | ||||
|
Oil & Gas |
|
|
|
|
|
|
|
|
|
|
|
|
|
Domestic |
|
$ |
334 |
|
$ |
276 |
|
$ |
1,094 |
|
$ |
1,040 |
|
Latin America |
|
|
140 |
|
|
93 |
|
|
453 |
|
|
355 |
|
Middle East / North Africa |
|
|
181 |
|
|
170 |
|
|
760 |
|
|
597 |
|
Chemicals |
|
|
72 |
|
|
78 |
|
|
311 |
|
|
304 |
|
Midstream, marketing and other |
|
|
21 |
|
|
18 |
|
|
73 |
|
|
67 |
|
Corporate |
|
|
5 |
|
|
4 |
|
|
19 |
|
|
16 |
|
TOTAL |
|
$ |
753 |
|
$ |
639 |
|
$ |
2,710 |
|
$ |
2,379 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15
Investor Relations Supplemental Schedules
OCCIDENTAL PETROLEUM
CORPORATE
($ millions)
|
|
|
31-Dec-08 |
|
31-Dec-07 | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
CAPITALIZATION |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-Term Debt (including current maturities) |
|
|
$ |
2,740 |
|
|
|
$ |
1,776 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes Payable |
|
|
|
7 |
|
|
|
|
12 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Others |
|
|
|
25 |
|
|
|
|
25 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Debt |
|
|
$ |
2,772 |
|
|
|
$ |
1,813 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EQUITY |
|
|
$ |
27,300 |
|
|
|
$ |
22,823 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Debt To Total Capitalization |
|
|
|
9% |
|
|
|
|
7% |
|
|
|
|
|
|
|
|
|
|
|
|
|
16
EXHIBIT 99.4
Fourth Quarter 2008
Earnings Conference Call
January 29, 2009
1
2
Fourth Quarter 2008 Earnings – Highlights
Core Results - $957 Million vs. $1.5 Billion in 4Q07
Core EPS $1.18 (diluted) vs. $1.76 in 4Q07.
Net Income - $443 Million vs. $1.5 Billion in 4Q07
EPS $0.55 (diluted) vs. $1.74 in 4Q07.
Net Income includes after-tax non-core charges as follows:
$390 mm impairment of undeveloped acreage in Argentina and
Yemen;
$27 mm impairment of producing oil and gas properties;
$37 mm for rig contract terminations, and;
$55 mm for chemical plant closure and impairments.
2
3
Fourth Quarter 2008 Earnings - Oil & Gas
Segment Variance Analysis - 4Q08 vs. 4Q07
Core Results for 4Q08 of $996 Million
($ in millions)
$2,461
4Q07
$1,415
Sales Price
$61
Sales
Volume/Mix
$34
Exploration
Expense
$77
*All Others
$996
4Q08
*All Others include: DD&A rate increase and higher operating expenses.
3
4
Fourth Quarter 2008 Earnings –
Oil & Gas Segment
4Q08
4Q07
Reported Segment Earnings ($ mm)
$339
$2,461
WTI Oil Price ($/bbl)
$58.73
$90.68
NYMEX Gas Price ($/mcf)
$6.97
$7.06
Oxy’s Realized Prices
Worldwide Oil ($/bbl)
$53.52
$80.30
US Natural Gas ($/mcf)
$4.67
$6.77
4
5
Fourth Quarter 2008 Earnings –
Oil & Gas Segment
4Q08
4Q07
Oil and Gas Sales Volumes (mboe/d)
620
590
+ 5.1% year-over-year
Year-over-year sales volume increase includes:
Dolphin project (+22 mboe/d);
Domestic operations (+14 mboe/d);
Oman (+6 mboe/d);
Libya, due to the new contract terms (-12 mboe/day).
Sales volumes were +32 mboe/d vs. 3Q08.
Exploration expense, excl. non-core items was $134 mm in 4Q08.
4Q08 non-core items include:
Impairments of undeveloped acreage in Argentina and Yemen;
Impairment of producing oil and gas properties, and;
Rig contract terminations.
5
6
Fourth Quarter 2008 Earnings – Chemical
Segment Variance Analysis - 4Q08 vs. 4Q07
Core Results for 4Q08 of $217 Million
Excludes $90 mm pre-tax loss related to plant closure and impairments;
Improved results attributable primarily to higher caustic soda margins.
($ in millions)
$94
4Q07
$156
Sales Price
$86
Sales
Volume/Mix
$65
Operations/
Manufacturing*
$12
All Others
$217
4Q08
*Lower feedstock costs.
6
7
Fourth Quarter 2008 Earnings – Midstream
Segment Variance Analysis - 4Q08 vs. 4Q07
Core Results for 4Q08 of $170 Million
Improvement due to higher crude oil marketing margins, higher Dolphin
pipeline income, partly offset by lower NGL/gas processing margins.
($ in millions)
$138
4Q07
$65
Marketing*
$21
Pipeline
$43
Gas Processing
$11
All Others
$170
4Q08
*Includes positive mark to market adjustments in crude oil marketing.
7
8
Fourth Quarter 2008 Earnings –
Full Year 2008 Results
Core Results FY2008 - $7.3 Billion vs. $4.4 Billion in FY2007
Core EPS $8.95 (diluted) vs. $5.25 in FY2007
Net Income FY2008 - $6.9 Billion vs. $5.4 Billion in FY2007
EPS $8.35 (diluted) vs. $6.44 in FY2007
2008 Net Income includes after-tax charges of $491 mm.
2007 Net Income includes an after-tax benefit of $1 Billion.
2008 Disclosure Reclassification:
We have broken out oil and gas production taxes and ad valorem taxes into
a separate line item called “taxes – other than on income”.
This highlights their sensitivity to product price variations;
These taxes were $2.62/boe in 2008 compared to $1.97/boe in 2007.
Oil and gas cash production costs (excl. the taxes above) were $12.13/boe
for 2008 versus $10.37/boe in 2007.
Increase is due to higher maintenance, workovers and field operating costs.
8
9
Fourth Quarter 2008 Earnings –
2008 Oil & Gas Reserves
We currently estimate that we replaced approximately 200%
of our oil and gas production in 2008.
This excludes the effect of price changes from 2007 to 2008.
Including the effect of price changes, we estimate that we
replaced around 150% of our 2008 production.
Slightly over half of the reserve additions, excluding effect of
price changes, came from internal sources resulting in over
100% reserve replacement.
Major reserve increases were in:
the California properties;
the Permian and the Rockies, and;
Oman.
In aggregate, these areas constituted more than half of such reserve
adds.
9
10
Fourth Quarter 2008 Earnings – Capital Spending
Last year’s capital program was about $4.7 billion, and we
spent another $4.7 billion for acquisitions.
As a result, we have accumulated a sizeable inventory of projects which can
be delayed until the industry cost structure is in line with product prices.
We believe that the service company cost structure is more
reflective of an $80 oil environment rather than a $40 one.
An illustration of our ability to defer drilling is that we have 5 mm net acres
in the US;
70% of this acreage is held by production;
about 10% consists of long-term leases, with many years on average to run,
and;
the remainder in mineral acres held in perpetuity.
This year’s capital program of $3.5 billion will focus on
ensuring that our returns remain well above our cost of capital
given current oil and gas prices and contractor costs.
About 80% of the capital will be in Oil and Gas and the
remainder in Midstream and Chemical.
10
11
Fourth Quarter 2008 Earnings – Capital Spending
Gas drilling with less than $5 per mcf gas is unattractive.
We will continue to fully fund much of our Middle East
operations, successful exploration programs in California,
Utah, and exploration in Argentina.
Formerly "quick payout" wells in the Permian and California
will be deferred until they become "quick payout" again.
We will continue to fund our Midstream and CO2 programs.
Expect our capital run rate in 1Q09 to be greater than the $3.5
billion level and will decline all year unless economic
conditions improve.
The effect of this program on our production should be modest in 2009, around
10 mboe/d, with a probable production range of 620 to 660 mboe/d and, with
about 630 to 650 mboe/d in 1Q09.
Year-over-year, Argentina and Oman will show the most growth.
11
12
Fourth Quarter 2008 Earnings – Capital Spending
We are also focusing on internal costs.
Some reductions in overhead will be made this year which should improve our
overhead levels by at least $1/boe.
We are renegotiating our supplier contracts to further reduce
costs and are laying down rigs, including paying cancellation
costs when that makes sense.
We expect these efforts to result in a reduction in the cost of executing our
capital programs, as well as, a reduction of our operating expenses.
Oxy’s focus has been and will continue to be delivering
returns well in excess of our cost of capital.
When costs and prices are inline, our capital program will be
boosted and the project inventory worked down faster.
12
13
Fourth Quarter 2008 Earnings –
Full Year 2008 Cash Flow
($ in millions)
$12,700
Cash
Flow From
Operations
$10,700
Beginning
Cash
$2,000
Available
Cash
$4,700
Capex
$4,700
Acquisitions
$950
Debt
$940
Dividends
$1,500
Share
Repurchase
$10
Other
$1,800
Ending Cash
Balance
12/31/08
13
14
Fourth Quarter 2008 Earnings –
Shares Outstanding, Debt and Returns
Shares Outstanding (mm)
2008
12/31/08
Weighted Average Basic
817.6
Weighted Average Diluted
820.8
Basic Shares Outstanding
810.4
Diluted Shares Outstanding
813.5
2008
2007
Debt/Capital
9%
7%
ROE
27%
26%
ROCE*
25%
24%
*See the investor relations supplemental schedules for the reconciliation of non-GAAP items.
14
15
Fourth Quarter 2008 Earnings - Outlook
We expect 1Q09 exploration expense to be about $60 mm.
We expect 1Q09 Chemical earnings to be $100 mm.
High caustic soda margins are expected to continue through the period, offset
by continued weakness in the construction and housing markets impacting
domestic demand.
Despite the difficult economic conditions, exports are anticipated to show
modest improvement over abysmal demand of 4Q08.
We expect our combined worldwide tax rate to be about 46%
in 1Q09, compared to 40% for full-year 2008.
Increase is caused by higher expected foreign-sourced income expected in
2009 as a percentage of total income.
We expect our Oil & Gas DD&A expense for 2009 to be
approximately $11.50/boe. Depreciation for the other two
segments should be approximately $400 mm.
We expect to have severance and similar charges in 1Q09.
15
Occidental Petroleum Corporation
Return on Capital Employed (% )
($ Millions)
|
Reconciliation to Generally Accepted Accounting Principles (GAAP) |
|
2007 |
2008 |
|
|
|
| ||||
|
GAAP measure - earnings applicable to common shareholders |
|
|
5,400 |
|
|
6,857 |
|
|
|
|
|
|
Interest expense |
|
|
199 |
|
|
26 |
|
|
|
|
|
|
Tax effect of interest expense |
|
|
(70 |
) |
|
(9 |
) |
|
|
|
|
|
Earnings before tax-effected interest expense |
|
|
5,529 |
|
|
6,874 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP stockholders' equity |
|
|
22,823 |
|
|
27,300 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DEBT |
|
|
|
|
|
|
|
|
|
|
|
|
GAAP debt |
|
|
|
|
|
|
|
|
|
|
|
|
Debt, including current maturities |
|
|
1,788 |
|
|
2,747 |
|
|
|
|
|
|
Non-GAAP debt |
|
|
|
|
|
|
|
|
|
|
|
|
Capital lease obligation |
|
|
25 |
|
|
25 |
|
|
|
|
|
|
Subsidiary preferred stock |
|
|
- |
|
|
- |
|
|
|
|
|
|
Total debt |
|
|
1,813 |
|
|
2,772 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total capital employed |
|
|
24,636 |
|
|
30,072 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on Capital Employed (%) |
|
|
23.6 |
|
|
25.1 |
|
|
|
|
|
EXHIBIT 99.5
FORWARD-LOOKING STATEMENTS FOR EARNINGS RELEASE PRESENTATION MATERIALS
Statements in this presentation 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: global commodity pricing fluctuations and supply/demand considerations for oil, gas and chemicals; exploration risks, such as drilling of unsuccessful wells; 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 presentation. 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.