Occidental Petroleum Corporation

 

 

 

 

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) February 13, 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 8 – Other Events

 

Item 8.01.  Other Events

 

On February 13, 2009, Occidental Petroleum Corporation issued a press release announcing preliminary proved reserve additions from all sources for a production replacement ratio of 210 percent, before the effect of price-related revisions. The full text of the press release is attached to this report as Exhibit 99.1.

 

Section 9 - Financial Statements and Exhibits

 

Item 9.01.  Financial Statements and Exhibits

 

(d)  Exhibits

 

 

99.1

Press release dated February 13, 2009.

 

 

1

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

OCCIDENTAL PETROLEUM CORPORATION

 

(Registrant)

 

 

 

 

 

 

 

 

DATE:  February 13, 2009

/s/ ROY PINECI

 

Roy Pineci, Vice President, Controller

and Principal Accounting Officer

 

 

2

 

EXHIBIT INDEX

 

 

99.1

 

Press release dated February 13, 2009.

Exhibit 99.1

EXHIBIT 99.1

For Immediate Release: February 13, 2009

Occidental Replaces 210 Percent of 2008 Production

LOS ANGELES, February 13, 2009 -- Occidental Petroleum Corporation (NYSE: OXY) announced today that at year-end 2008, the company's preliminary worldwide proved reserves, on a consolidated basis, totaled 2.98 billion barrels of oil equivalent (BOE) compared to 2.87 billion BOE at the end of 2007. In 2008, the company's consolidated subsidiaries had proved reserve additions from all sources, before the effect of price-related revisions, of 463 million BOE, compared to production of 221 million BOE, for a production replacement ratio of 210 percent. At the end of 2008, Occidental's consolidated reserves-to-production ratio, assuming production remained at the 2008 level, was 13.5 years.

Excluding purchases of proved reserves and the effect of price revisions, the company added 253 million BOE of proved reserves on a consolidated basis, of which improved recovery provided 98 percent and extensions and discoveries provided 9 percent, partially offset by non-price-related negative revisions of 7 percent.

These additions were partially offset by negative revisions of 127 million BOE that were attributable to the difference between prices of oil and gas at year-end 2007 and year-end 2008. Negative domestic price revisions were partially offset by positive price revisions in the Middle East/North Africa, as a result of the impact of Production Sharing Contracts.

Occidental's costs for exploration and development activities were $4.4 billion. Additionally, Occidental incurred $3.5 billion in property acquisition costs. All of the acquisitions were domestic, mainly in the Rocky Mountains and the Permian Basin.

In 2008, proved developed reserves were 74 percent of total proved reserves. For the three-year period 2006 through 2008, Occidental's consolidated proved reserve additions totaled 1.1 billion BOE, and total production equaled 630 million BOE, for a reserve replacement ratio of 173 percent.

 

 

2008 RECAP

 

 

Reserve

 

Costs

 

Additions

 

Incurred

 

(Million BOE)

 

($ Millions)

 

 

 

 

 

 

 

 

 

Additions

 

271

 

 

 

$

4,441

 

 

 

 

 

 

 

 

 

 

Less: Physical Revisions

 

(18

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Additions

 

253

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Purchase of Proved Reserves

 

210

 

 

 

 

3,541

 

 

 

 

 

 

 

 

 

 

Additions from All Sources

 

463

 

 

 

$

7,982

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Production

 

(221

)

 

 

 

 

 

Sales of Proved Reserves

 

(3

)

 

 

 

 

 

Price Revisions

 

(127

)

 

 

 

 

 

 

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.

-0-

Contacts:

Richard S. Kline (media)

 

richard_kline@oxy.com

 

310-443-6249

 

 

 

Chris Stavros (investors)

 

chris_stavros@oxy.com

 

212-603-8184

 

 

 

On the web: www.oxy.com

 

 

2

 

OIL AND GAS PRELIMINARY RESERVES

(Consolidated Subsidiaries)

 

The following table sets forth Occidental's net interests in quantities of proved developed and undeveloped reserves of crude oil, natural gas liquids (NGLs), condensate and natural gas and changes in such quantities. Crude oil reserves (in millions of barrels) include condensate and NGLs. Natural gas volumes (in billion cubic feet) have been converted to barrels of oil equivalent (BOE) based on energy content of 6,000 cubic feet of gas to one barrel of oil.

 

 

 

United

 

Latin

 

Middle East/

 

Total

 

 

 

States

 

America

 

No. Africa

 

Million

 

 

 

Oil

 

Gas

 

Oil

 

Gas

 

Oil

 

Gas

 

BOE (b)

 

PROVED DEVELOPED AND

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

UNDEVELOPED RESERVES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2005

 

1,616

 

2,323

 

50

 

 

296

 

1,051

 

2,524

 

Revisions of

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

previous estimates

 

(28

)

(135

)

10

 

45

 

39

 

59

 

16

 

Improved recovery

 

69

 

120

 

33

 

 

14

 

7

 

137

 

Extensions and

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

discoveries

 

3

 

58

 

7

 

 

14

 

 

34

 

Purchases of proved

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

reserves

 

98

 

274

 

152

 

161

 

4

 

 

326

 

Sales of proved

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

reserves

 

(4

)

(2

)

 

 

 

 

(4

)

Production

 

(94

)

(214

)

(26

)

(12

)

(40

)

(11

)

(200

)

Balance at

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2006

 

1,660

 

2,424

 

226

 

194

 

327

 

1,106

 

2,833

 

Revisions of

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

previous estimates

 

(20

)

35

 

(17

)

5

 

(43

)

(130

)

(95

)

Improved recovery

 

114

 

406

 

17

 

5

 

52

 

6

 

253

 

Extensions and

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

discoveries

 

1

 

5

 

15

 

19

 

2

 

11

 

24

 

Purchases of proved

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

reserves

 

47

 

18

 

 

 

10

 

 

60

 

Sales of proved

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

reserves

 

 

 

 

 

 

 

 

Production

 

(95

)

(216

)

(27

)

(15

)

(43

)

(30

)

(209

)

Balance at

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2007

 

1,707

 

2,672

 

214

 

208

 

305

 

963

 

2,866

 

Revisions of

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

previous estimates

 

(243

)

(490

)

(6

)

(26

)

135

 

328

 

(145

)

Improved recovery

 

99

 

281

 

44

 

46

 

46

 

21

 

247

 

Extensions and

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

discoveries

 

11

 

76

 

 

 

 

 

24

 

Purchases of proved

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

reserves

 

71

 

832

 

 

 

 

 

210

 

Sales of proved

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

reserves

 

(2

)

(3

)

 

 

 

 

(3

)

Production

 

(96

)

(215

)

(28

)

(16

)

(46

)

(76

)

(221

)

Balance at

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2008

 

1,547

 

3,153

 

224

 

212

 

440

 

1,236

 

2,978

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3

 

OIL AND GAS PRELIMINARY RESERVES (continued)

(Consolidated Subsidiaries)

 

 

 

United

 

Latin

 

Middle East/

 

Total

 

 

 

States

 

America

 

No. Africa

 

Million

 

 

 

Oil

 

Gas

 

Oil

 

Gas

 

Oil

 

Gas

 

BOE (b)

 

PROVED DEVELOPED

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RESERVES (a)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2005

 

1,319

 

1,833

 

44

 

 

174

 

73

 

1,855

 

December 31, 2006

 

1,382

 

1,940

 

140

 

137

 

249

 

560

 

2,211

 

December 31, 2007

 

1,406

 

1,997

 

120

 

140

 

262

 

932

 

2,300

 

December 31, 2008

 

1,209

 

1,866

 

124

 

142

 

342

 

1,206

 

2,211

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(a) Approximately one percent of the proved developed oil reserves and approximately three percent of the proved developed gas reserves at December 31, 2008 are non-producing.

 

(b) Excludes other interests, which include the minority interest in a Colombian subsidiary, partially offset by Occidental's share of reserves from an equity investee in Yemen. Other interests have total proved reserves of (1) million BOE and proved developed reserves of (2) million BOE at December 31, 2008.

 

 

4

 

PRELIMINARY COSTS INCURRED

(Consolidated Subsidiaries)

 

Occidental's 2008, 2007 and 2006 costs incurred in oil and gas property acquisition, exploration and development activities, whether capitalized or expensed, were as follows:

 

 

 

United

 

Latin

 

Middle East/

 

 

 

 

 

 

States

 

America

 

No. Africa

 

Total (b)

 

FOR THE YEAR ENDED

 

 

 

 

 

 

 

 

 

 

 

 

 

DECEMBER 31, 2008

 

 

 

 

 

 

 

 

 

 

 

 

 

Property Acquisition

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs

 

 

 

 

 

 

 

 

 

 

 

 

 

Proved Properties

 

$

1,819

 

$

8

 

$

4

 

$

1,831

 

Unproved Properties

 

 

1,362

 

 

 

 

348

 

 

1,710

 

Exploration Costs

 

 

130

 

 

96

 

 

115

 

 

341

 

Development Costs

 

 

1,740

 

 

864

 

 

1,496

 

 

4,100

 

Costs Incurred

 

$

5,051

 

$

968

 

$

1,963

 

$

7,982

 

FOR THE YEAR ENDED

 

 

 

 

 

 

 

 

 

 

 

 

 

DECEMBER 31, 2007

 

 

 

 

 

 

 

 

 

 

 

 

 

Property Acquisition

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs

 

 

 

 

 

 

 

 

 

 

 

 

 

Proved Properties

 

$

626

 

$

 

$

300

 

$

926

 

Unproved Properties

 

 

167

 

 

(58

)

 

10

 

 

119

 

Exploration Costs

 

 

39

 

 

79

 

 

213

 

 

331

 

Development Costs

 

 

1,268

 

 

524

 

 

1,032

 

 

2,824

 

Costs Incurred

 

$

2,100

 

$

545

 

$

1,555

 

$

4,200

 

FOR THE YEAR ENDED

 

 

 

 

 

 

 

 

 

 

 

 

 

DECEMBER 31, 2006

 

 

 

 

 

 

 

 

 

 

 

 

 

Property Acquisition

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs (a)

 

 

 

 

 

 

 

 

 

 

 

 

 

Proved Properties

 

$

2,083

 

$

2,408

 

$

397

 

$

4,888

 

Unproved Properties

 

 

377

 

 

655

 

 

110

 

 

1,142

 

Exploration Costs

 

 

39

 

 

61

 

 

213

 

 

313

 

Development Costs

 

 

1,330

 

 

320

 

 

792

 

 

2,442

 

Costs Incurred

 

$

3,829

 

$

3,444

 

$

1,512

 

$

8,785

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

(b) Excludes costs incurred for other interests totaling $4 million in 2008.

 

 

5

 

PRELIMINARY 5-YEAR DATA

CONSOLIDATED SUBSIDIARIES

 

 

 

Reserve

 

 

 

 

Costs

 

 

Additions

 

Production

 

Incurred

 

 

(Million BOE)

 

(Million BOE)

 

($ Millions)

2004

 

241

 

 

166

 

 

1,662

 

2005

 

370

 

 

171

 

 

4,185

 

2006

 

513

 

 

200

 

 

8,785

*

2007

 

242

 

 

209

 

 

4,200

 

2008

 

336

 

 

221

 

 

7,982

 

3-Year

 

 

 

 

 

 

 

 

 

Average

 

363

 

 

210

 

 

6,990

 

5-Year

 

 

 

 

 

 

 

 

 

Average

 

340

 

 

193

 

 

5,363

 

 

Reserves Replacement

(Million BOE)

 

 

 

 

 

Improved

 

Extensions

 

 

 

 

 

 

 

 

Revisions

 

Recovery

 

Discoveries

 

Acquisitions

 

Total

2004

 

50

 

 

110

 

 

41

 

 

40

 

 

241

 

2005

 

(15

)

 

129

 

 

117

 

 

139

 

 

370

 

2006

 

16

 

 

137

 

 

34

 

 

326

 

 

513

 

2007

 

(95

)

 

253

 

 

24

 

 

60

 

 

242

 

2008

 

(145

)

 

247

 

 

24

 

 

210

 

 

336

 

3-Year

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average

 

(75

)

 

212

 

 

27

 

 

199

 

 

363

 

5-Year

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average

 

(38

)

 

175

 

 

48

 

 

155

 

 

340

 

 

 

Costs Incurred

($ Millions)

 

 

 

 

 

Exploration

 

Development

 

 

 

 

 

Acquisitions

 

Costs

 

Costs

 

Total

2004

 

166

 

 

132

 

 

1,364

 

 

1,662

 

2005

 

2,166

 

 

232

 

 

1,787

 

 

4,185

 

2006

 

6,030

 

 

313

 

 

2,442

 

 

8,785

*

2007

 

1,045

 

 

331

 

 

2,824

 

 

4,200

 

2008

 

3,541

 

 

341

 

 

4,100

 

 

7,982

 

3-Year

 

 

 

 

 

 

 

 

 

 

 

 

Average

 

3,539

 

 

328

 

 

3,122

 

 

6,990

 

5-Year

 

 

 

 

 

 

 

 

 

 

 

 

Average

 

2,590

 

 

270

 

 

2,503

 

 

5,363

 

 

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

 

 

6