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 31, 2013
OCCIDENTAL PETROLEUM CORPORATION
(Exact name of registrant as specified in its charter)
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Delaware
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1-9210
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95-4035997
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(State or other jurisdiction
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(Commission
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(I.R.S. Employer
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of incorporation)
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File Number)
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Identification No.)
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10889 Wilshire Boulevard
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||
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Los Angeles, California
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90024
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(Address of principal executive offices)
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(ZIP code)
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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 31, 2013, Occidental Petroleum Corporation released information regarding its results of operations for the three and twelve months ended December 31, 2012. 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 Cynthia L. Walker and Stephen 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 is attached to this report as Exhibit 99.5. The information in this Item 2.02 and Exhibits 99.1 through 99.5, inclusive, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.
Section 8 – Other Events
Item 8.01. Other Events
On January 31, 2013, Occidental Petroleum Corporation announced core income of $1.5 billion ($1.83 per diluted share) for the fourth quarter of 2012, compared with $1.6 billion ($2.02 per diluted share) for the fourth quarter of 2011. In the fourth quarter of 2012, we recorded after-tax charges of $1.1 billion or $1.41 per diluted share, almost all of which was related to the impairment of gas assets in the Midcontinent. Net income for the fourth quarter of 2012 after this charge was $336 million ($0.42 per diluted share), compared with $1.6 billion ($2.01 per diluted share) for the same period of 2011.
Core income was $5.8 billion ($7.09 per diluted share) for the year 2012, compared with $6.8 billion ($8.39 per diluted share) for 2011. Net income for the twelve months of 2012 was $4.6 billion ($5.67 per diluted share), compared with $6.8 billion ($8.32 per diluted share) for 2011.
QUARTERLY RESULTS
Oil and Gas
Oil and gas core earnings were $2.3 billion for the fourth quarter of 2012, compared with $2.5 billion for the fourth quarter of 2011. Lower 2012 earnings resulted from lower year-over-year prices across all products in the fourth quarter of 2012 and higher DD&A rates, partially offset by higher liquids volumes. After including the fourth quarter 2012 charges, which will be discussed in more detail on the earnings call, segment earnings were $522 million.
For the fourth quarter of 2012, daily oil and gas production volumes averaged 779,000 barrels of oil equivalent (BOE), compared with 748,000 BOE in the fourth quarter of 2011.
The fourth quarter 2012 production increase resulted from higher volumes of 26,000 BOE per day from domestic operations and 5,000 BOE per day from international production. The international increase included higher production in Iraq, Bahrain and Libya, partially offset by lower volumes from Dolphin, resulting from the full cost recovery of pre-startup capital, and in Yemen due to the Masila field contract expiration.
1
Daily sales volumes increased from 749,000 BOE in the fourth quarter of 2011 to 784,000 BOE in the fourth quarter of 2012.
Oxy’s realized price for worldwide crude oil was $96.19 per barrel for the fourth quarter of 2012, compared with $99.62 per barrel for the fourth quarter of 2011. The fourth quarter of 2012 realized oil price represents 109 percent of the average WTI and 87 percent of the average Brent price. Worldwide NGL prices were $45.08 per barrel in the fourth quarter of 2012, compared with $55.25 per barrel in the fourth quarter of 2011. Domestic gas prices decreased 14 percent from $3.59 per MCF in the fourth quarter of 2011 to $3.09 per MCF for the fourth quarter of 2012.
Fourth quarter 2012 realized prices were higher than third quarter 2012 prices for worldwide NGLs and domestic natural gas but were slightly lower for worldwide crude oil. On a sequential quarterly basis, prices increased 11 percent for NGLs and 25 percent for domestic natural gas and decreased less than 1 percent for worldwide crude oil.
Chemical
Chemical segment earnings for the fourth quarter of 2012 were $180 million, compared with $144 million in the fourth quarter of 2011. The increase was primarily the result of higher export volumes for caustic soda and vinyl chloride monomer and lower ethylene costs.
Midstream, Marketing and Other
Midstream segment earnings were $75 million for the fourth quarter of 2012, compared with $70 million for the fourth quarter of 2011.
TWELVE-MONTH RESULTS
Oil and Gas
Oil and gas core earnings were $8.8 billion for the twelve months of 2012, compared with $10.3 billion for the same period of 2011. The decrease in 2012 reflected lower NGL and natural gas prices, higher operating costs, exploration expense and DD&A rates, partially offset by higher oil prices and domestic volumes. Segment earnings, after including the fourth quarter charges, were $7.1 billion for 2012, compared with $10.2 billion for 2011.
Oil and gas production volumes for the twelve months were 766,000 BOE per day for 2012, compared with 733,000 BOE per day for the same period in 2011. Year-over-year, Oxy's domestic production increased by 9 percent, while total company production increased by 5 percent. Dolphin's full cost recovery of pre-startup capital, which reduced production, was the only operation where production sharing and similar contracts had an appreciable effect.
The twelve-month 2012 production increase resulted from 37,000 BOE per day in higher domestic volumes, partially offset by lower volumes in the Middle East/North Africa and Latin America.
Daily sales volumes were 764,000 BOE in the twelve months of 2012, compared with 731,000 BOE for the same period in 2011.
Oxy's realized prices improved for crude oil but declined for natural gas and NGLs on a year-over-year basis. Worldwide crude oil prices were $99.87 per barrel for the twelve months of 2012, compared with $97.92 per barrel for the twelve months of 2011. Worldwide NGL prices were $45.18 per
2
barrel for the year 2012, compared with $55.53 per barrel for the year 2011. Domestic gas prices declined 35 percent, from $4.06 per MCF in the twelve months of 2011 to $2.62 per MCF in the twelve months of 2012.
Chemical
Chemical segment earnings were $720 million for the twelve months of 2012, compared with $861 million for the same period in 2011. The reduction was primarily a result of lower margins due to weaker economic conditions in Europe and Asia, and increased competitive activity from these regions. The calcium chloride and potassium hydroxide businesses were also negatively impacted by an extremely mild winter and drought conditions in the United States.
Midstream, Marketing and Other
Midstream segment earnings were $439 million for the twelve months of 2012, compared with $448 million for the same period in 2011.
Forward-Looking Statements
Portions of this report contain forward-looking statements and involve risks and uncertainties that could materially affect expected results of operations, liquidity, cash flows and business prospects. Factors that could cause results to differ materially include, but are not limited to: global commodity pricing fluctuations; supply and demand considerations for Occidental’s products; general domestic political and regulatory approval conditions; higher-than-expected costs; international political conditions; not successfully completing, or any material delay of, any development of new fields, expansion projects, capital expenditures, efficiency-improvement projects, acquisitions or dispositions; potential failure to achieve expected production from existing and future oil and gas development projects or acquisitions; exploration risks such as drilling unsuccessful wells; any changes in general economic conditions domestically or internationally; the ability to attract trained engineers; potential liability for remedial actions under existing or future environmental regulations and litigation; potential liability resulting from pending or future litigation; potential disruption or interruption of Occidental’s production or manufacturing or damage to facilities due to accidents, chemical releases, labor unrest, weather, natural disasters, political events or insurgent activity; failure of risk management; changes in law or regulations; or changes in tax rates. Words such as "estimate", "project", "predict", "will", "would", "should", "could", "may", "might", "anticipate", "plan", "intend", "believe", "expect", "aim", "goal", "target", "objective", "likely" or similar expressions that convey the uncertainty of future events or outcomes generally indicate forward-looking statements. 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. Material risks that may affect Occidental’s results of operations and financial position appear in Part 1, Item 1A "Risk Factors" of the 2011 Form 10-K.
3
|
Attachment 1
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||||||||||||||||
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SUMMARY OF SEGMENT NET SALES AND EARNINGS
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||||||||||||||||
|
Fourth Quarter
|
Twelve Months
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|||||||||||||||
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($ millions, except per-share amounts)
|
2012
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2011
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2012
|
2011
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||||||||||||
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SEGMENT NET SALES
|
||||||||||||||||
|
Oil and Gas
|
$
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4,874
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$
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4,784
|
$
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18,906
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$
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18,419
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||||||||
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Chemical
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1,141
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1,094
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4,580
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4,815
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||||||||||||
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Midstream, Marketing and Other
|
355
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338
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1,399
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1,447
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||||||||||||
|
Eliminations
|
(199
|
)
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(182
|
)
|
(713
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)
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(742
|
)
|
||||||||
|
Net Sales
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$
|
6,171
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$
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6,034
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$
|
24,172
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$
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23,939
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||||||||
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SEGMENT EARNINGS
|
||||||||||||||||
|
Oil and Gas (a)
|
$
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522
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$
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2,537
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$
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7,095
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$
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10,241
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||||||||
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Chemical
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180
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144
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720
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861
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||||||||||||
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Midstream, Marketing and Other
|
75
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70
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439
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448
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||||||||||||
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777
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2,751
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8,254
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11,550
|
|||||||||||||
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Unallocated Corporate Items
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||||||||||||||||
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Interest expense, net (b)
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(30
|
)
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(25
|
)
|
(117
|
)
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(284
|
)
|
||||||||
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Income taxes (c)
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(249
|
)
|
(949
|
)
|
(3,118
|
)
|
(4,201
|
)
|
||||||||
|
Other
|
(134
|
)
|
(136
|
)
|
(384
|
)
|
(425
|
)
|
||||||||
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Income from Continuing Operations
|
364
|
1,641
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4,635
|
6,640
|
||||||||||||
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Discontinued operations, net (d)
|
(28
|
)
|
(7
|
)
|
(37
|
)
|
131
|
|||||||||
|
NET INCOME
|
$
|
336
|
$
|
1,634
|
$
|
4,598
|
$
|
6,771
|
||||||||
|
BASIC EARNINGS PER COMMON SHARE
|
||||||||||||||||
|
Income from continuing operations
|
$
|
0.45
|
$
|
2.02
|
$
|
5.72
|
$
|
8.16
|
||||||||
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Discontinued operations, net
|
(0.03
|
)
|
(0.01
|
)
|
(0.05
|
)
|
0.16
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|||||||||
|
$
|
0.42
|
$
|
2.01
|
$
|
5.67
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$
|
8.32
|
|||||||||
|
DILUTED EARNINGS PER COMMON SHARE
|
||||||||||||||||
|
Income from continuing operations
|
$
|
0.45
|
$
|
2.02
|
$
|
5.71
|
$
|
8.16
|
||||||||
|
Discontinued operations, net
|
(0.03
|
)
|
(0.01
|
)
|
(0.04
|
)
|
0.16
|
|||||||||
|
$
|
0.42
|
$
|
2.01
|
$
|
5.67
|
$
|
8.32
|
|||||||||
|
AVERAGE COMMON SHARES OUTSTANDING
|
||||||||||||||||
|
BASIC
|
807.1
|
810.7
|
809.3
|
812.1
|
||||||||||||
|
DILUTED
|
807.7
|
811.5
|
810.0
|
812.9
|
||||||||||||
|
(a) Oil and Gas - The fourth quarter and twelve months of 2012 include pre-tax charges of $1.7 billion related to the impairment of domestic gas assets and related items. The twelve months of 2011 include pre-tax charges of $35 million related to exploration write-offs in Libya and $29 million related to Colombia net worth tax. Also, included in the twelve months of 2011 results is a pre-tax gain for sale of an interest in a Colombia pipeline of $22 million.
|
||||||||||||||||
|
(b) Unallocated Corporate Items - Interest Expense, net - The twelve months of 2011 include a pre-tax charge of $163 million related to the premium on debt extinguishment.
|
||||||||||||||||
|
(c) Unallocated Corporate Items - Taxes - The twelve months of 2011 include a net $21 million charge for out-of-period state income taxes.
|
||||||||||||||||
|
(d) Discontinued Operations, net - The twelve months of 2011 include a $144 million after-tax gain from the sale of the Argentine operations.
|
||||||||||||||||
4
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Attachment 2
|
||||||||||||||||
|
SUMMARY OF CAPITAL EXPENDITURES AND DD&A EXPENSE
|
||||||||||||||||
|
Fourth Quarter
|
Twelve Months
|
|||||||||||||||
|
($ millions)
|
2012
|
2011
|
2012
|
2011
|
||||||||||||
|
CAPITAL EXPENDITURES
|
$
|
2,510
|
$
|
2,549
|
$
|
10,226
|
$
|
7,518
|
||||||||
|
DEPRECIATION, DEPLETION AND
|
||||||||||||||||
|
AMORTIZATION OF ASSETS
|
$
|
1,191
|
$
|
938
|
$
|
4,511
|
$
|
3,591
|
||||||||
5
|
Attachment 3
|
||||||||||||||||
|
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.
|
||||||||||||||||
|
Fourth Quarter
|
||||||||||||||||
|
($ millions, except per-share amounts)
|
2012
|
Diluted
EPS
|
2011
|
Diluted
EPS
|
||||||||||||
|
TOTAL REPORTED EARNINGS
|
$
|
336
|
$
|
0.42
|
$
|
1,634
|
$
|
2.01
|
||||||||
|
Oil and Gas
|
||||||||||||||||
|
Segment Earnings
|
$
|
522
|
$
|
2,537
|
||||||||||||
|
Add:
|
||||||||||||||||
|
Asset impairments and related items
|
1,731
|
-
|
||||||||||||||
|
Segment Core Results
|
2,253
|
2,537
|
||||||||||||||
|
Chemicals
|
||||||||||||||||
|
Segment Earnings
|
180
|
144
|
||||||||||||||
|
Add:
|
||||||||||||||||
|
No significant items affecting earnings
|
-
|
-
|
||||||||||||||
|
Segment Core Results
|
180
|
144
|
||||||||||||||
|
Midstream, Marketing and Other
|
||||||||||||||||
|
Segment Earnings
|
75
|
70
|
||||||||||||||
|
Add:
|
||||||||||||||||
|
No significant items affecting earnings
|
-
|
-
|
||||||||||||||
|
Segment Core Results
|
75
|
70
|
||||||||||||||
|
Total Segment Core Results
|
2,508
|
2,751
|
||||||||||||||
|
Corporate
|
||||||||||||||||
|
Corporate Results --
|
||||||||||||||||
|
Non Segment *
|
(441
|
)
|
(1,117
|
)
|
||||||||||||
|
Add:
|
||||||||||||||||
|
Litigation reserves
|
20
|
-
|
||||||||||||||
|
Tax effect of pre-tax adjustments
|
(636
|
)
|
-
|
|||||||||||||
|
Discontinued operations, net **
|
28
|
7
|
||||||||||||||
|
Corporate Core Results - Non Segment
|
(1,029
|
)
|
(1,110
|
)
|
||||||||||||
|
TOTAL CORE RESULTS
|
$
|
1,479
|
$
|
1.83
|
$
|
1,641
|
$
|
2.02
|
||||||||
|
* Interest expense, income taxes, G&A expense and other.
|
||||||||||||||||
|
** Amounts shown after tax.
|
||||||||||||||||
6
|
Attachment 4
|
||||||||||||||||
|
SIGNIFICANT TRANSACTIONS AND EVENTS AFFECTING EARNINGS (continued)
|
||||||||||||||||
|
Twelve Months
|
||||||||||||||||
|
($ millions, except per-share amounts)
|
2012
|
Diluted
EPS
|
2011
|
Diluted
EPS
|
||||||||||||
|
TOTAL REPORTED EARNINGS
|
$
|
4,598
|
$
|
5.67
|
$
|
6,771
|
$
|
8.32
|
||||||||
|
Oil and Gas
|
||||||||||||||||
|
Segment Earnings
|
$
|
7,095
|
$
|
10,241
|
||||||||||||
|
Add:
|
||||||||||||||||
|
Asset impairments and related items
|
1,731
|
-
|
||||||||||||||
|
Libya exploration write-off
|
-
|
35
|
||||||||||||||
|
Gain on sale of Colombia pipeline interest
|
-
|
(22
|
)
|
|||||||||||||
|
Foreign tax
|
-
|
29
|
||||||||||||||
|
Segment Core Results
|
8,826
|
10,283
|
||||||||||||||
|
Chemicals
|
||||||||||||||||
|
Segment Earnings
|
720
|
861
|
||||||||||||||
|
Add:
|
||||||||||||||||
|
No significant items affecting earnings
|
-
|
-
|
||||||||||||||
|
Segment Core Results
|
720
|
861
|
||||||||||||||
|
Midstream, Marketing and Other
|
||||||||||||||||
|
Segment Earnings
|
439
|
448
|
||||||||||||||
|
Add:
|
||||||||||||||||
|
No significant items affecting earnings
|
-
|
-
|
||||||||||||||
|
Segment Core Results
|
439
|
448
|
||||||||||||||
|
Total Segment Core Results
|
9,985
|
11,592
|
||||||||||||||
|
Corporate
|
||||||||||||||||
|
Corporate Results --
|
||||||||||||||||
|
Non Segment *
|
(3,656
|
)
|
(4,779
|
)
|
||||||||||||
|
Add:
|
||||||||||||||||
|
Litigation reserves
|
20
|
-
|
||||||||||||||
|
Premium on debt extinguishments
|
-
|
163
|
||||||||||||||
|
State income tax charge
|
-
|
33
|
||||||||||||||
|
Tax effect of pre-tax adjustments
|
(636
|
)
|
(50
|
)
|
||||||||||||
|
Discontinued operations, net **
|
37
|
(131
|
)
|
|||||||||||||
|
Corporate Core Results - Non Segment
|
(4,235
|
)
|
(4,764
|
)
|
||||||||||||
|
TOTAL CORE RESULTS
|
$
|
5,750
|
$
|
7.09
|
$
|
6,828
|
$
|
8.39
|
||||||||
|
* Interest expense, income taxes, G&A expense and other
|
||||||||||||||||
|
** Amounts shown after tax.
|
||||||||||||||||
7
|
Attachment 5
|
||||||||||||||||
|
SUMMARY OF OPERATING STATISTICS - PRODUCTION
|
||||||||||||||||
|
Fourth Quarter
|
Twelve Months
|
|||||||||||||||
|
2012
|
2011
|
2012
|
2011
|
|||||||||||||
|
NET OIL, GAS AND LIQUIDS PRODUCTION PER DAY
|
||||||||||||||||
|
United States
|
||||||||||||||||
|
Crude Oil (MBBL)
|
||||||||||||||||
|
California
|
92
|
84
|
88
|
80
|
||||||||||||
|
Permian
|
146
|
137
|
142
|
134
|
||||||||||||
|
Midcontinent and Other
|
27
|
19
|
25
|
16
|
||||||||||||
|
Total
|
265
|
240
|
255
|
230
|
||||||||||||
|
NGL (MBBL)
|
||||||||||||||||
|
California
|
21
|
15
|
17
|
15
|
||||||||||||
|
Permian
|
40
|
37
|
39
|
38
|
||||||||||||
|
Midcontinent and Other
|
16
|
18
|
17
|
16
|
||||||||||||
|
Total
|
77
|
70
|
73
|
69
|
||||||||||||
|
Natural Gas (MMCF)
|
||||||||||||||||
|
California
|
242
|
276
|
256
|
260
|
||||||||||||
|
Permian
|
162
|
167
|
155
|
157
|
||||||||||||
|
Midcontinent and Other
|
396
|
390
|
410
|
365
|
||||||||||||
|
Total
|
800
|
833
|
821
|
782
|
||||||||||||
|
Latin America
|
||||||||||||||||
|
Crude Oil (MBBL) - Colombia
|
30
|
28
|
29
|
29
|
||||||||||||
|
Natural Gas (MMCF) - Bolivia
|
12
|
14
|
13
|
15
|
||||||||||||
|
Middle East / North Africa
|
||||||||||||||||
|
Crude Oil (MBBL)
|
||||||||||||||||
|
Bahrain
|
4
|
5
|
4
|
4
|
||||||||||||
|
Dolphin
|
7
|
9
|
8
|
9
|
||||||||||||
|
Oman
|
74
|
67
|
67
|
67
|
||||||||||||
|
Qatar
|
71
|
76
|
71
|
73
|
||||||||||||
|
Other
|
36
|
33
|
36
|
38
|
||||||||||||
|
Total
|
192
|
190
|
186
|
191
|
||||||||||||
|
NGL (MBBL)
|
||||||||||||||||
|
Dolphin
|
7
|
9
|
8
|
10
|
||||||||||||
|
Other
|
-
|
-
|
1
|
-
|
||||||||||||
|
Total
|
7
|
9
|
9
|
10
|
||||||||||||
|
Natural Gas (MMCF)
|
||||||||||||||||
|
Bahrain
|
242
|
180
|
232
|
173
|
||||||||||||
|
Dolphin
|
138
|
181
|
163
|
199
|
||||||||||||
|
Oman
|
56
|
58
|
57
|
54
|
||||||||||||
|
Total
|
436
|
419
|
452
|
426
|
||||||||||||
|
Barrels of Oil Equivalent (MBOE)
|
779
|
748
|
766
|
733
|
||||||||||||
8
|
Attachment 6
|
||||||||||||||||
|
SUMMARY OF OPERATING STATISTICS - SALES
|
||||||||||||||||
|
Fourth Quarter
|
Twelve Months
|
|||||||||||||||
|
2012
|
2011
|
2012
|
2011
|
|||||||||||||
|
NET OIL, GAS AND LIQUIDS SALES PER DAY
|
||||||||||||||||
|
United States
|
||||||||||||||||
|
Crude Oil (MBBL)
|
265
|
240
|
255
|
230
|
||||||||||||
|
NGL (MBBL)
|
77
|
70
|
73
|
69
|
||||||||||||
|
Natural Gas (MMCF)
|
800
|
833
|
819
|
782
|
||||||||||||
|
Latin America
|
||||||||||||||||
|
Crude Oil (MBBL) - Colombia
|
30
|
32
|
28
|
29
|
||||||||||||
|
Natural Gas (MMCF) - Bolivia
|
12
|
14
|
13
|
15
|
||||||||||||
|
Middle East / North Africa
|
||||||||||||||||
|
Crude Oil (MBBL)
|
||||||||||||||||
|
Bahrain
|
4
|
5
|
4
|
4
|
||||||||||||
|
Dolphin
|
7
|
9
|
8
|
9
|
||||||||||||
|
Oman
|
70
|
66
|
66
|
69
|
||||||||||||
|
Qatar
|
75
|
75
|
71
|
73
|
||||||||||||
|
Other
|
39
|
31
|
36
|
34
|
||||||||||||
|
Total
|
195
|
186
|
185
|
189
|
||||||||||||
|
NGL (MBBL)
|
||||||||||||||||
|
Dolphin
|
7
|
10
|
8
|
10
|
||||||||||||
|
Other
|
2
|
-
|
1
|
-
|
||||||||||||
|
Total
|
9
|
10
|
9
|
10
|
||||||||||||
|
Natural Gas (MMCF)
|
436
|
419
|
452
|
426
|
||||||||||||
|
Barrels of Oil Equivalent (MBOE)
|
784
|
749
|
764
|
731
|
||||||||||||
9
Section 9 - Financial Statements and Exhibits
Item 9.01. Financial Statements and Exhibits
|
(d)
|
Exhibits
|
|
|
99.1
|
Press release dated January 13, 2013.
|
|
|
99.2
|
Full text of speeches given by Cynthia L. Walker and Stephen Chazen.
|
|
|
99.3
|
Investor Relations Supplemental Schedules.
|
|
|
99.4
|
Earnings Conference Call Slides.
|
|
|
99.5
|
Forward-Looking Statements Disclosure for Earnings Release Presentation Materials.
|
10
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 31, 2013
|
/s/ ROY PINECI
|
|
|
Roy Pineci, Vice President, Controller
|
||
|
and Principal Accounting Officer
|
EXHIBIT INDEX
|
(d)
|
Exhibits
|
|
|
99.1
|
Press release dated January 31, 2013.
|
|
|
99.2
|
Full text of speeches given by Cynthia L. Walker and Stephen 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 31, 2013
Occidental Petroleum Announces 4th Quarter and 12 Months of 2012 Income
|
●
|
Q4 2012 record total company oil and gas production of 779,000 barrels of oil equivalent per day
|
|
|
●
|
Q4 2012 domestic daily oil and gas production of 475,000 barrels of oil equivalent, a record for the ninth consecutive quarter
|
|
|
●
|
Q4 2012 core earnings of $1.5 billion, or $1.83 per diluted share
|
LOS ANGELES, January 31, 2013 -- Occidental Petroleum Corporation (NYSE:OXY) announced core income of $1.5 billion ($1.83 per diluted share) for the fourth quarter of 2012, compared with $1.6 billion ($2.02 per diluted share) for the fourth quarter of 2011. In the fourth quarter of 2012, we recorded after-tax charges of $1.1 billion or $1.41 per diluted share, almost all of which was related to the impairment of gas assets in the Midcontinent. Net income for the fourth quarter of 2012 after this charge was $336 million ($0.42 per diluted share), compared with $1.6 billion ($2.01 per diluted share) for the same period of 2011.
Core income was $5.8 billion ($7.09 per diluted share) for the year 2012, compared with $6.8 billion ($8.39 per diluted share) for 2011. Net income for the twelve months of 2012 was $4.6 billion ($5.67 per diluted share), compared with $6.8 billion ($8.32 per diluted share) for 2011.
In announcing the results, Stephen I. Chazen, President and Chief Executive Officer, said, "Our fourth quarter domestic production of 475,000 barrels of oil equivalent per day, of which 342,000 barrels per day was liquids, set a record for the ninth consecutive quarter. Our total company production for all of 2012 was 766,000 barrels of oil equivalent per day, which was 5 percent higher than 2011. Our domestic oil production grew by 11 percent for all of 2012 to 255,000 barrels per day from 230,000 barrels in 2011.
"Fourth quarter core income was $1.5 billion or $1.83 per diluted share. These results were $0.13 higher than the third quarter of 2012 as a result of higher liquids volumes, higher realized NGL and domestic gas prices and lower operating expenses. In the fourth quarter, our production costs were $1.04 a barrel lower than the third quarter, with improvements across most units. The reductions resulted from efficiencies achieved across most cost categories including savings in surface operations, reductions in the use of outside contractors, curtailment of uneconomic down-hole maintenance and workover
1 of 5
activity, as well as related overhead. Our exit rate on a per barrel basis was well below the total year 2012 and below the fourth quarter 2011 levels. We generated cash flow from continuing operations before working capital changes of $12.1 billion for the twelve months of 2012 and invested $10.2 billion in capital expenditures."
QUARTERLY RESULTS
Oil and Gas
Oil and gas core earnings were $2.3 billion for the fourth quarter of 2012, compared with $2.5 billion for the fourth quarter of 2011. Lower 2012 earnings resulted from lower year-over-year prices across all products in the fourth quarter of 2012 and higher DD&A rates, partially offset by higher liquids volumes. After including the fourth quarter 2012 charges, which will be discussed in more detail on the earnings call, segment earnings were $522 million.
For the fourth quarter of 2012, daily oil and gas production volumes averaged 779,000 barrels of oil equivalent (BOE), compared with 748,000 BOE in the fourth quarter of 2011.
The fourth quarter 2012 production increase resulted from higher volumes of 26,000 BOE per day from domestic operations and 5,000 BOE per day from international production. The international increase included higher production in Iraq, Bahrain and Libya, partially offset by lower volumes from Dolphin, resulting from the full cost recovery of pre-startup capital, and in Yemen due to the Masila field contract expiration.
Daily sales volumes increased from 749,000 BOE in the fourth quarter of 2011 to 784,000 BOE in the fourth quarter of 2012.
Oxy’s realized price for worldwide crude oil was $96.19 per barrel for the fourth quarter of 2012, compared with $99.62 per barrel for the fourth quarter of 2011. The fourth quarter of 2012 realized oil price represents 109 percent of the average WTI and 87 percent of the average Brent price. Worldwide NGL prices were $45.08 per barrel in the fourth quarter of 2012, compared with $55.25 per barrel in the fourth quarter of 2011. Domestic gas prices decreased 14 percent from $3.59 per MCF in the fourth quarter of 2011 to $3.09 per MCF for the fourth quarter of 2012.
Fourth quarter 2012 realized prices were higher than third quarter 2012 prices for worldwide NGLs and domestic natural gas but were slightly lower for worldwide crude oil. On a sequential quarterly basis, prices increased 11 percent for NGLs and 25 percent for domestic natural gas and decreased less than 1 percent for worldwide crude oil.
Chemical
Chemical segment earnings for the fourth quarter of 2012 were $180 million, compared with $144 million in the fourth quarter of 2011. The increase was primarily the
2 of 5
result of higher export volumes for caustic soda and vinyl chloride monomer and lower ethylene costs.
Midstream, Marketing and Other
Midstream segment earnings were $75 million for the fourth quarter of 2012, compared with $70 million for the fourth quarter of 2011.
TWELVE-MONTH RESULTS
Oil and Gas
Oil and gas core earnings were $8.8 billion for the twelve months of 2012, compared with $10.3 billion for the same period of 2011. The decrease in 2012 reflected lower NGL and natural gas prices, higher operating costs, exploration expense and DD&A rates, partially offset by higher oil prices and domestic volumes. Segment earnings, after including the fourth quarter charges, were $7.1 billion for 2012, compared with $10.2 billion for 2011.
Oil and gas production volumes for the twelve months were 766,000 BOE per day for 2012, compared with 733,000 BOE per day for the same period in 2011. Year-over-year, Oxy's domestic production increased by 9 percent, while total company production increased by 5 percent. Dolphin's full cost recovery of pre-startup capital, which reduced production, was the only operation where production sharing and similar contracts had an appreciable effect.
The twelve-month 2012 production increase resulted from 37,000 BOE per day in higher domestic volumes, partially offset by lower volumes in the Middle East/North Africa and Latin America.
Daily sales volumes were 764,000 BOE in the twelve months of 2012, compared with 731,000 BOE for the same period in 2011.
Oxy's realized prices improved for crude oil but declined for natural gas and NGLs on a year-over-year basis. Worldwide crude oil prices were $99.87 per barrel for the twelve months of 2012, compared with $97.92 per barrel for the twelve months of 2011. Worldwide NGL prices were $45.18 per barrel for the year 2012, compared with $55.53 per barrel for the year 2011. Domestic gas prices declined 35 percent, from $4.06 per MCF in the twelve months of 2011 to $2.62 per MCF in the twelve months of 2012.
Chemical
Chemical segment earnings were $720 million for the twelve months of 2012, compared with $861 million for the same period in 2011. The reduction was primarily a result of lower margins due to weaker economic conditions in Europe and Asia, and increased competitive activity from these regions. The calcium chloride and potassium
3 of 5
hydroxide businesses were also negatively impacted by an extremely mild winter and drought conditions in the United States.
Midstream, Marketing and Other
Midstream segment earnings were $439 million for the twelve months of 2012, compared with $448 million for the same period in 2011.
About Oxy
Occidental Petroleum Corporation (OXY) 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 one of the largest U.S. oil and gas companies, based on equity market capitalization. Oxy's wholly owned subsidiary OxyChem manufactures and markets chlor-alkali products and vinyls. Oxy is committed to safeguarding the environment, protecting the safety and health of employees and neighboring communities and upholding high standards of social responsibility in all of the company's worldwide operations.
Forward-Looking Statements
Portions of this press release contain forward-looking statements and involve risks and uncertainties that could materially affect expected results of operations, liquidity, cash flows and business prospects. Factors that could cause results to differ materially include, but are not limited to: global commodity pricing fluctuations; supply and demand considerations for Occidental’s products; general domestic political and regulatory approval conditions; higher-than-expected costs; international political conditions; not successfully completing, or any material delay of, any development of new fields, expansion projects, capital expenditures, efficiency-improvement projects, acquisitions or dispositions; potential failure to achieve expected production from existing and future oil and gas development projects or acquisitions; exploration risks such as drilling unsuccessful wells; any changes in general economic conditions domestically or internationally; the ability to attract trained engineers; potential liability for remedial actions under existing or future environmental regulations and litigation; potential liability resulting from pending or future litigation; potential disruption or interruption of Occidental’s production or manufacturing or damage to facilities due to accidents, chemical releases, labor unrest, weather, natural disasters, political events or insurgent activity; failure of risk management; changes in law or regulations; or changes in tax rates. Words such as "estimate", "project", "predict", "will", "would", "should", "could", "may", "might", "anticipate", "plan", "intend", "believe", "expect", "aim", "goal", "target", "objective", "likely" or similar expressions that convey the uncertainty of future events or outcomes generally indicate forward-looking statements. You should not place undue reliance on these forward-looking statements, which speak only as of the date
4 of 5
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. Material risks that may affect Occidental’s results of operations and financial position appear in Part 1, Item 1A "Risk Factors" of the 2011 Form 10-K.
-0-
Contacts:
Melissa E. Schoeb (media)
melissa_schoeb@oxy.com
310-443-6504
or
Chris Stavros (investors)
chris_stavros@oxy.com
212-603-8184
For further analysis of Occidental's quarterly performance, please visit the
website: www.oxy.com
5 of 5
|
Attachment 1
|
||||||||||||||||
|
SUMMARY OF SEGMENT NET SALES AND EARNINGS
|
||||||||||||||||
|
Fourth Quarter
|
Twelve Months
|
|||||||||||||||
|
($ millions, except per-share amounts)
|
2012
|
2011
|
2012
|
2011
|
||||||||||||
|
SEGMENT NET SALES
|
||||||||||||||||
|
Oil and Gas
|
$
|
4,874
|
$
|
4,784
|
$
|
18,906
|
$
|
18,419
|
||||||||
|
Chemical
|
1,141
|
1,094
|
4,580
|
4,815
|
||||||||||||
|
Midstream, Marketing and Other
|
355
|
338
|
1,399
|
1,447
|
||||||||||||
|
Eliminations
|
(199
|
)
|
(182
|
)
|
(713
|
)
|
(742
|
)
|
||||||||
|
Net Sales
|
$
|
6,171
|
$
|
6,034
|
$
|
24,172
|
$
|
23,939
|
||||||||
|
SEGMENT EARNINGS
|
||||||||||||||||
|
Oil and Gas (a)
|
$
|
522
|
$
|
2,537
|
$
|
7,095
|
$
|
10,241
|
||||||||
|
Chemical
|
180
|
144
|
720
|
861
|
||||||||||||
|
Midstream, Marketing and Other
|
75
|
70
|
439
|
448
|
||||||||||||
|
777
|
2,751
|
8,254
|
11,550
|
|||||||||||||
|
Unallocated Corporate Items
|
||||||||||||||||
|
Interest expense, net (b)
|
(30
|
)
|
(25
|
)
|
(117
|
)
|
(284
|
)
|
||||||||
|
Income taxes (c)
|
(249
|
)
|
(949
|
)
|
(3,118
|
)
|
(4,201
|
)
|
||||||||
|
Other
|
(134
|
)
|
(136
|
)
|
(384
|
)
|
(425
|
)
|
||||||||
|
Income from Continuing Operations
|
364
|
1,641
|
4,635
|
6,640
|
||||||||||||
|
Discontinued operations, net (d)
|
(28
|
)
|
(7
|
)
|
(37
|
)
|
131
|
|||||||||
|
NET INCOME
|
$
|
336
|
$
|
1,634
|
$
|
4,598
|
$
|
6,771
|
||||||||
|
BASIC EARNINGS PER COMMON SHARE
|
||||||||||||||||
|
Income from continuing operations
|
$
|
0.45
|
$
|
2.02
|
$
|
5.72
|
$
|
8.16
|
||||||||
|
Discontinued operations, net
|
(0.03
|
)
|
(0.01
|
)
|
(0.05
|
)
|
0.16
|
|||||||||
|
$
|
0.42
|
$
|
2.01
|
$
|
5.67
|
$
|
8.32
|
|||||||||
|
DILUTED EARNINGS PER COMMON SHARE
|
||||||||||||||||
|
Income from continuing operations
|
$
|
0.45
|
$
|
2.02
|
$
|
5.71
|
$
|
8.16
|
||||||||
|
Discontinued operations, net
|
(0.03
|
)
|
(0.01
|
)
|
(0.04
|
)
|
0.16
|
|||||||||
|
$
|
0.42
|
$
|
2.01
|
$
|
5.67
|
$
|
8.32
|
|||||||||
|
AVERAGE COMMON SHARES OUTSTANDING
|
||||||||||||||||
|
BASIC
|
807.1
|
810.7
|
809.3
|
812.1
|
||||||||||||
|
DILUTED
|
807.7
|
811.5
|
810.0
|
812.9
|
||||||||||||
|
(a) Oil and Gas - The fourth quarter and twelve months of 2012 include pre-tax charges of $1.7 billion related to the impairment of domestic gas assets and related items. The twelve months of 2011 include pre-tax charges of $35 million related to exploration write-offs in Libya and $29 million related to Colombia net worth tax. Also, included in the twelve months of 2011 results is a pre-tax gain for sale of an interest in a Colombia pipeline of $22 million.
|
||||||||||||||||
|
(b) Unallocated Corporate Items - Interest Expense, net - The twelve months of 2011 include a pre-tax charge of $163 million related to the premium on debt extinguishment.
|
||||||||||||||||
|
(c) Unallocated Corporate Items - Taxes - The twelve months of 2011 include a net $21 million charge for out-of-period state income taxes.
|
||||||||||||||||
|
(d) Discontinued Operations, net - The twelve months of 2011 include a $144 million after-tax gain from the sale of the Argentine operations.
|
||||||||||||||||
|
Attachment 2
|
||||||||||||||||
|
SUMMARY OF CAPITAL EXPENDITURES AND DD&A EXPENSE
|
||||||||||||||||
|
Fourth Quarter
|
Twelve Months
|
|||||||||||||||
|
($ millions)
|
2012
|
2011
|
2012
|
2011
|
||||||||||||
|
CAPITAL EXPENDITURES
|
$
|
2,510
|
$
|
2,549
|
$
|
10,226
|
$
|
7,518
|
||||||||
|
DEPRECIATION, DEPLETION AND
|
||||||||||||||||
|
AMORTIZATION OF ASSETS
|
$
|
1,191
|
$
|
938
|
$
|
4,511
|
$
|
3,591
|
||||||||
|
Attachment 3
|
||||||||||||||||
|
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.
|
||||||||||||||||
|
Fourth Quarter
|
||||||||||||||||
|
($ millions, except per-share amounts)
|
2012
|
Diluted
EPS
|
2011
|
Diluted
EPS
|
||||||||||||
|
TOTAL REPORTED EARNINGS
|
$
|
336
|
$
|
0.42
|
$
|
1,634
|
$
|
2.01
|
||||||||
|
Oil and Gas
|
||||||||||||||||
|
Segment Earnings
|
$
|
522
|
$
|
2,537
|
||||||||||||
|
Add:
|
||||||||||||||||
|
Asset impairments and related items
|
1,731
|
-
|
||||||||||||||
|
Segment Core Results
|
2,253
|
2,537
|
||||||||||||||
|
Chemicals
|
||||||||||||||||
|
Segment Earnings
|
180
|
144
|
||||||||||||||
|
Add:
|
||||||||||||||||
|
No significant items affecting earnings
|
-
|
-
|
||||||||||||||
|
Segment Core Results
|
180
|
144
|
||||||||||||||
|
Midstream, Marketing and Other
|
||||||||||||||||
|
Segment Earnings
|
75
|
70
|
||||||||||||||
|
Add:
|
||||||||||||||||
|
No significant items affecting earnings
|
-
|
-
|
||||||||||||||
|
Segment Core Results
|
75
|
70
|
||||||||||||||
|
Total Segment Core Results
|
2,508
|
2,751
|
||||||||||||||
|
Corporate
|
||||||||||||||||
|
Corporate Results --
|
||||||||||||||||
|
Non Segment *
|
(441
|
)
|
(1,117
|
)
|
||||||||||||
|
Add:
|
||||||||||||||||
|
Litigation reserves
|
20
|
-
|
||||||||||||||
|
Tax effect of pre-tax adjustments
|
(636
|
)
|
-
|
|||||||||||||
|
Discontinued operations, net **
|
28
|
7
|
||||||||||||||
|
Corporate Core Results - Non Segment
|
(1,029
|
)
|
(1,110
|
)
|
||||||||||||
|
TOTAL CORE RESULTS
|
$
|
1,479
|
$
|
1.83
|
$
|
1,641
|
$
|
2.02
|
||||||||
|
* Interest expense, income taxes, G&A expense and other.
|
||||||||||||||||
|
** Amounts shown after tax.
|
||||||||||||||||
|
Attachment 4
|
||||||||||||||||
|
SIGNIFICANT TRANSACTIONS AND EVENTS AFFECTING EARNINGS (continued)
|
||||||||||||||||
|
Twelve Months
|
||||||||||||||||
|
($ millions, except per-share amounts)
|
2012
|
Diluted
EPS
|
2011
|
Diluted
EPS
|
||||||||||||
|
TOTAL REPORTED EARNINGS
|
$
|
4,598
|
$
|
5.67
|
$
|
6,771
|
$
|
8.32
|
||||||||
|
Oil and Gas
|
||||||||||||||||
|
Segment Earnings
|
$
|
7,095
|
$
|
10,241
|
||||||||||||
|
Add:
|
||||||||||||||||
|
Asset impairments and related items
|
1,731
|
-
|
||||||||||||||
|
Libya exploration write-off
|
-
|
35
|
||||||||||||||
|
Gain on sale of Colombia pipeline interest
|
-
|
(22
|
)
|
|||||||||||||
|
Foreign tax
|
-
|
29
|
||||||||||||||
|
Segment Core Results
|
8,826
|
10,283
|
||||||||||||||
|
Chemicals
|
||||||||||||||||
|
Segment Earnings
|
720
|
861
|
||||||||||||||
|
Add:
|
||||||||||||||||
|
No significant items affecting earnings
|
-
|
-
|
||||||||||||||
|
Segment Core Results
|
720
|
861
|
||||||||||||||
|
Midstream, Marketing and Other
|
||||||||||||||||
|
Segment Earnings
|
439
|
448
|
||||||||||||||
|
Add:
|
||||||||||||||||
|
No significant items affecting earnings
|
-
|
-
|
||||||||||||||
|
Segment Core Results
|
439
|
448
|
||||||||||||||
|
Total Segment Core Results
|
9,985
|
11,592
|
||||||||||||||
|
Corporate
|
||||||||||||||||
|
Corporate Results --
|
||||||||||||||||
|
Non Segment *
|
(3,656
|
)
|
(4,779
|
)
|
||||||||||||
|
Add:
|
||||||||||||||||
|
Litigation reserves
|
20
|
-
|
||||||||||||||
|
Premium on debt extinguishments
|
-
|
163
|
||||||||||||||
|
State income tax charge
|
-
|
33
|
||||||||||||||
|
Tax effect of pre-tax adjustments
|
(636
|
)
|
(50
|
)
|
||||||||||||
|
Discontinued operations, net **
|
37
|
(131
|
)
|
|||||||||||||
|
Corporate Core Results - Non Segment
|
(4,235
|
)
|
(4,764
|
)
|
||||||||||||
|
TOTAL CORE RESULTS
|
$
|
5,750
|
$
|
7.09
|
$
|
6,828
|
$
|
8.39
|
||||||||
|
* Interest expense, income taxes, G&A expense and other
|
||||||||||||||||
|
** Amounts shown after tax.
|
||||||||||||||||
|
Attachment 5
|
||||||||||||||||
|
SUMMARY OF OPERATING STATISTICS - PRODUCTION
|
||||||||||||||||
|
Fourth Quarter
|
Twelve Months
|
|||||||||||||||
|
2012
|
2011
|
2012
|
2011
|
|||||||||||||
|
NET OIL, GAS AND LIQUIDS PRODUCTION PER DAY
|
||||||||||||||||
|
United States
|
||||||||||||||||
|
Crude Oil (MBBL)
|
||||||||||||||||
|
California
|
92
|
84
|
88
|
80
|
||||||||||||
|
Permian
|
146
|
137
|
142
|
134
|
||||||||||||
|
Midcontinent and Other
|
27
|
19
|
25
|
16
|
||||||||||||
|
Total
|
265
|
240
|
255
|
230
|
||||||||||||
|
NGL (MBBL)
|
||||||||||||||||
|
California
|
21
|
15
|
17
|
15
|
||||||||||||
|
Permian
|
40
|
37
|
39
|
38
|
||||||||||||
|
Midcontinent and Other
|
16
|
18
|
17
|
16
|
||||||||||||
|
Total
|
77
|
70
|
73
|
69
|
||||||||||||
|
Natural Gas (MMCF)
|
||||||||||||||||
|
California
|
242
|
276
|
256
|
260
|
||||||||||||
|
Permian
|
162
|
167
|
155
|
157
|
||||||||||||
|
Midcontinent and Other
|
396
|
390
|
410
|
365
|
||||||||||||
|
Total
|
800
|
833
|
821
|
782
|
||||||||||||
|
Latin America
|
||||||||||||||||
|
Crude Oil (MBBL) - Colombia
|
30
|
28
|
29
|
29
|
||||||||||||
|
Natural Gas (MMCF) - Bolivia
|
12
|
14
|
13
|
15
|
||||||||||||
|
Middle East / North Africa
|
||||||||||||||||
|
Crude Oil (MBBL)
|
||||||||||||||||
|
Bahrain
|
4
|
5
|
4
|
4
|
||||||||||||
|
Dolphin
|
7
|
9
|
8
|
9
|
||||||||||||
|
Oman
|
74
|
67
|
67
|
67
|
||||||||||||
|
Qatar
|
71
|
76
|
71
|
73
|
||||||||||||
|
Other
|
36
|
33
|
36
|
38
|
||||||||||||
|
Total
|
192
|
190
|
186
|
191
|
||||||||||||
|
NGL (MBBL)
|
||||||||||||||||
|
Dolphin
|
7
|
9
|
8
|
10
|
||||||||||||
|
Other
|
-
|
-
|
1
|
-
|
||||||||||||
|
Total
|
7
|
9
|
9
|
10
|
||||||||||||
|
Natural Gas (MMCF)
|
||||||||||||||||
|
Bahrain
|
242
|
180
|
232
|
173
|
||||||||||||
|
Dolphin
|
138
|
181
|
163
|
199
|
||||||||||||
|
Oman
|
56
|
58
|
57
|
54
|
||||||||||||
|
Total
|
436
|
419
|
452
|
426
|
||||||||||||
|
Barrels of Oil Equivalent (MBOE)
|
779
|
748
|
766
|
733
|
||||||||||||
|
Attachment 6
|
||||||||||||||||
|
SUMMARY OF OPERATING STATISTICS - SALES
|
||||||||||||||||
|
Fourth Quarter
|
Twelve Months
|
|||||||||||||||
|
2012
|
2011
|
2012
|
2011
|
|||||||||||||
|
NET OIL, GAS AND LIQUIDS SALES PER DAY
|
||||||||||||||||
|
United States
|
||||||||||||||||
|
Crude Oil (MBBL)
|
265
|
240
|
255
|
230
|
||||||||||||
|
NGL (MBBL)
|
77
|
70
|
73
|
69
|
||||||||||||
|
Natural Gas (MMCF)
|
800
|
833
|
819
|
782
|
||||||||||||
|
Latin America
|
||||||||||||||||
|
Crude Oil (MBBL) - Colombia
|
30
|
32
|
28
|
29
|
||||||||||||
|
Natural Gas (MMCF) - Bolivia
|
12
|
14
|
13
|
15
|
||||||||||||
|
Middle East / North Africa
|
||||||||||||||||
|
Crude Oil (MBBL)
|
||||||||||||||||
|
Bahrain
|
4
|
5
|
4
|
4
|
||||||||||||
|
Dolphin
|
7
|
9
|
8
|
9
|
||||||||||||
|
Oman
|
70
|
66
|
66
|
69
|
||||||||||||
|
Qatar
|
75
|
75
|
71
|
73
|
||||||||||||
|
Other
|
39
|
31
|
36
|
34
|
||||||||||||
|
Total
|
195
|
186
|
185
|
189
|
||||||||||||
|
NGL (MBBL)
|
||||||||||||||||
|
Dolphin
|
7
|
10
|
8
|
10
|
||||||||||||
|
Other
|
2
|
-
|
1
|
-
|
||||||||||||
|
Total
|
9
|
10
|
9
|
10
|
||||||||||||
|
Natural Gas (MMCF)
|
436
|
419
|
452
|
426
|
||||||||||||
|
Barrels of Oil Equivalent (MBOE)
|
784
|
749
|
764
|
731
|
||||||||||||
EXHIBIT 99.2
Occidental Petroleum Corporation
CYNTHIA L. WALKER
Executive Vice President and Chief Financial Officer
– Conference Call –
Fourth Quarter 2012 Earnings Announcement
January 31, 2013
Los Angeles, California
Thank you Chris.
Core income was $1.5 billion or $1.83 per diluted share in the fourth quarter of 2012, compared to $1.6 billion or $2.02 per diluted share in the fourth quarter of 2011 and $1.4 billion or $1.70 per diluted share in the third quarter of 2012. The improvement from the third quarter reflected the effect of higher liquids production, higher realized NGL and domestic gas prices and reduced operating expenses in the oil and gas business, partially offset by lower earnings in the midstream segment.
In the fourth quarter we recorded pre-tax charges of $1.8 billion, representing $1.1 billion after-tax or $1.41 per diluted share. Almost all of the charges were for impairments in the Oil and Gas Midcontinent business units, over 90 percent of which was related to natural gas properties, which were acquired more than four years ago on average. While the performance of the properties was generally as expected, natural gas prices have declined by approximately 50% since the acquisitions. Natural gas and NGL prices
used for reserve calculations in 2012 were significantly lower than prices used in 2011, resulting in declines in economically feasible reserves in these properties. In addition, despite the recent modest increase in gas prices, drilling in many gassy areas remains uneconomical. As a result, we continue to operate at minimal levels in these areas as we have discussed previously. The charges related to the natural gas properties reflect the impairment of such properties to approximate fair value.
Net income after the fourth quarter charge I mentioned was $336 million, or $0.42 per diluted share.
I will now discuss the segment breakdown of results for the fourth quarter.
Oil and gas earnings for the fourth quarter of 2012, excluding the charge I mentioned, were $2.3 billion, compared to $2.0 billion in the third quarter of 2012 and $2.5 billion in the fourth quarter of 2011. We delivered a quarter-over-quarter improvement, despite the decline in WTI prices, as a result of higher liquids production, higher realized NGL and domestic gas prices and, importantly, lower operating expenses.
Oil and gas production costs were $14.99 per barrel for the twelve months of 2012, compared with $12.84 per barrel for the full year 2011. Our fourth quarter production costs were $14.95 per barrel, which was $1.04 per barrel lower than the third quarter level. I would note that these reductions occurred during the course of the quarter and our year-end exit rate on a per barrel basis was lower than the fourth quarter 2011 average and well below the fourth quarter 2012 level, giving us confidence as we begin 2013. Steve will review the drivers of the improvement and our expectations for 2013 in more detail.
2
The fourth quarter 2012 total daily production on a BOE basis was 779,000 barrels, a new record set by the company, and was up 13,000 barrels per day from the third quarter of 2012, and up 4 percent from the fourth quarter of 2011. Approximately 6,000 barrels, or almost half of the total sequential increase in quarterly production, came from domestic operations, mainly in California and Permian, almost all of which was attributable to higher oil production.
|
●
|
Our domestic production was 475,000 barrels per day, an increase of 6,000 barrels per day from the third quarter of 2012 and now the ninth consecutive quarterly domestic volume record for the company. Production was 6 percent higher than the fourth quarter of 2011. All of the net sequential quarterly increase came from oil production in California and Permian. Domestic gas production was down slightly from the third quarter, which was offset by higher liquids production resulting from higher yields from our new Elk Hills gas plant.
|
|
|
●
|
Latin America volumes were 32,000 barrels per day, which was flat compared to the prior quarter and the same period in 2011.
|
|
|
●
|
In the Middle East, production was 272,000 barrels per day, an increase of 7,000 barrels from the third quarter of 2012 volumes. Higher spending levels in Iraq and Oman resulted in 8,000 barrels per day higher production. Dolphin production was lower due to the full cost recovery of pre-startup capital. Other factors affecting production sharing and similar contracts, including oil prices, did not significantly impact this quarter’s production volumes compared to the fourth quarter of 2011 or the third quarter of 2012. Details regarding other country-specific production levels are
|
3
|
available in the Investor Relations Supplemental Schedules we provide.
|
||
|
●
|
Fourth quarter realized prices were mixed for our products compared to the third quarter of the year. Our worldwide crude oil realized price was $96.19 per barrel, a slight decrease from the third quarter; while worldwide NGLs were $45.08 per barrel, an increase of about 11 percent, and domestic natural gas prices were $3.09 per MCF, an improvement of 25 percent.
|
|
|
●
|
Fourth quarter 2012 realized prices were lower than the prior year fourth quarter prices for all our products. On a year-over-year basis, price decreases were 3 percent for worldwide crude oil, 18 percent for worldwide NGLs and 14 percent for domestic natural gas.
|
|
|
●
|
Realized oil prices for the quarter represented 109 percent of the average WTI price and 87 percent of the average Brent price. Realized NGL prices were 51 percent of the average WTI price and realized domestic gas prices were 92 percent of the average NYMEX price.
|
|
|
●
|
At current global prices, a $1.00 per barrel change in oil prices affects our quarterly earnings before income taxes by $37 million and $7 million for a $1.00 per barrel change in NGL prices. A change in domestic gas prices of 50 cents per million BTUs affects quarterly pre-tax earnings by about $30 million. These price change sensitivities include the impact of production-sharing and similar contract volume changes.
|
4
|
●
|
Taxes other than on income, which are generally related to product prices, were $2.39 per barrel for the full year of 2012, compared with $2.21 per barrel for the full year of 2011.
|
|
|
●
|
Fourth quarter exploration expense was $82 million. We expect first quarter 2013 exploration expense to be about $90 million for seismic and drilling in our exploration programs.
|
|
|
●
|
Our fourth quarter DD&A rate was $14.47 per barrel and we expect the full year 2013 rate to be approximately $17 per barrel.
|
Chemical segment earnings for the fourth quarter of 2012 were $180 million, compared to $162 million in the third quarter of 2012 and $144 million for the fourth quarter of 2011. The sequential quarterly improvement reflected higher caustic soda and PVC prices, partially offset by higher energy and feedstock costs. The year-over-year increase reflected higher export volumes for caustic soda and VCM and lower feedstock costs. The chemical segment first quarter 2013 earnings are expected to be about $150 million. Typical weak seasonal demand, particularly in the construction and agricultural market segments, combined with the recent increases in ethylene and natural gas costs may, however, tighten margins in the first quarter.
Midstream segment earnings were $75 million for the fourth quarter of 2012, compared to $156 million in the third quarter of 2012 and $70 million in the fourth quarter of 2011. The 2012 sequential quarterly decrease in earnings was caused by lower marketing and trading, foreign pipeline and power generation earnings.
The worldwide effective tax rate on core income was 37 percent for the fourth quarter of 2012. The rate was lower than the prior quarter and our guidance, largely due to higher proportion of domestic income in the fourth
5
quarter than foreign income. Our fourth quarter U.S. and foreign tax rates are included in the Investor Relations Supplemental Schedules. We expect our combined worldwide tax rate in the first quarter of 2013 to increase to about 40 percent.
In the twelve months of 2012, we generated $12.1 billion of cash flow from continuing operations before changes in working capital. Working capital changes reduced our full year cash flow from operations by approximately $800 million to $11.3 billion. Capital expenditures for the twelve months of 2012 were $10.2 billion, of which $2.5 billion was spent in the fourth quarter. The fourth quarter 2012 capital spend was approximately $100 million lower than the third quarter 2012, driven by an approximately 12 percent reduction in oil and gas spending, partially offset by increases in the chemical and midstream segments. The higher capital at chemicals was related to the construction of a new membrane chlor-alkali plant in Tennessee, which is expected to be completed by the fourth quarter of 2013. Midstream capital was higher mainly due to the Al Hosn gas project. Total year capital expenditures by segment were 80 percent in oil and gas, 15 percent in midstream and the remainder in chemicals. Acquisitions for the twelve months of 2012 were $2.5 billion, of which $1.3 billion was spent in the fourth quarter on domestic oil and gas properties. Financial activities, which included five quarterly dividends paid, stock buybacks and a $1.74 billion borrowing earlier this year, resulted in a net use of cash of $850 million. These and other net cash flows resulted in a $1.6 billion cash balance at December 31.
During the year, we bought about 7.5 million of our own shares at a cost of about $580 million. Approximately 5 million of the shares were purchased in the fourth quarter at an average price of $76.15.
6
The weighted-average basic shares outstanding for the twelve months of 2012 were 809.3 million and the weighted-average diluted shares outstanding were 810.0 million. The weighted-average basic shares outstanding for the fourth quarter of 2012 were 807.1 million and the weighted-average diluted shares outstanding were 807.7 million. We had approximately 805.5 million shares outstanding at the end of the year.
Our debt-to-capitalization ratio was 16 percent at year-end.
Our return on equity in 2012 using core results was 14.6 percent and the return on capital employed was 12.6 percent.
Copies of the press release announcing our fourth quarter earnings and the Investor Relations Supplemental Schedules are available on our website at oxy.com or through the SEC’s EDGAR system.
I will now turn the call over to Steve Chazen to discuss our 2013 capital program, year-end oil and gas reserves and provide guidance for the first half of the year.
______________
Throughout this presentation, barrels may refer to barrels of oil, barrels of liquids or barrels of oil equivalents or BOE, which include natural gas, as the context requires.
7
Occidental Petroleum Corporation
STEPHEN CHAZEN
President and Chief Executive Officer
– Conference Call –
Fourth Quarter 2012 Earnings Guidance
January 31, 2013
Los Angeles, California
Thank you Cynthia.
Occidental’s domestic oil and gas segment produced record volumes for the ninth consecutive quarter and continued to execute on our oil production growth strategy. The fourth quarter domestic production of 475,000 barrel equivalents per day, consisting of 342,000 barrels of liquids and 800 million cubic feet per day of gas, was an increase of 6,000 barrel equivalents per day compared to the third quarter of 2012. The increase in the domestic production over the third quarter 2012 was almost entirely in oil, which grew from 260,000 barrels per day to 265,000. Gas production declined 12 million cubic feet per day on a sequential quarterly basis, mainly in the Midcontinent, which reflects the reduction in gas-directed drilling we have mentioned over the past couple of quarters. Higher natural gas liquids volumes, resulting from better yields from our new Elk Hills gas plant, offset the decline in the gas production. Our total year domestic production grew from 428,000 barrels per day in 2011 to 465,000 per day in 2012, or
8
about 9 percent. Our total year domestic oil production grew by 11 percent from 230,000 barrels per day in 2011 to 255,000 barrels in 2012.
The company's total daily production reached a record 779,000 barrels per day in the fourth quarter and 766,000 barrels for the full year. This resulted in a 5 percent increase for the total year.
We have embarked on an aggressive plan to improve our operational efficiencies over all cost categories, including capital – with a view toward achieving an appreciable reduction in our operating expenses and drilling costs to at least 2011 levels in order to create higher margins from our production.
|
●
|
With regard to driving efficiencies in our cash operating costs, we are running well ahead of plan. We recognize that cost efficiency is the result of many decisions that are made at all levels of the organization, in particular numerous decisions that are made at the field level. All of our business units stepped up to the challenge of reducing our costs and involved their personnel at all levels, from business unit management all the way to field level personnel, to generate ideas to improve cost efficiency and our employees responded. The business units generated many good ideas, large numbers of which were generated by field level personnel. Many of these ideas have already been implemented and the results are apparent through reductions already realized in operating expenses. There are still many more big and small ideas that are in the process of being implemented, which we believe will result in additional improvements. In the fourth quarter, the total company production costs were $1.04 per barrel lower than the third
|
9
|
quarter amount. Improvements were realized across most business units, most notably in the Permian and Elk Hills. The reductions resulted from efficiencies achieved across most cost categories including savings in surface operations, reductions in the use of outside contractors, curtailment of uneconomic down-hole maintenance and workover activity as well as related overhead. In 2013, we expect to realize further improvements in all of these categories. We expect our production costs per barrel to be under $14.00 in 2013, which is significantly lower than the 2012 average costs. Many of the steps already taken during the fourth quarter of 2012, which is only partially reflected in the quarter's average costs, along with additional measures being implemented early in the year, should result in meaningful additional cost reductions in 2013 and beyond.
|
||
|
●
|
We are seeing strong early results from our efforts toward improving drilling efficiency and cutting our well costs through the simplification of our well design, focusing our activities on fewer geologic play types and favoring higher return conventional activity. Our goal for 2013 is to reduce our U.S. drilling costs by 15 percent compared to 2012 and we are approximately halfway toward that target with further improvements expected during the next couple of quarters.
|
We have increased our dividends at a compounded annual rate of 15.8 percent over the last 10 years through 11 dividend increases. We expect to announce a further dividend increase after the meeting of the Board of Directors in the second week of February. As a result of our consistent long-term record of growing our dividend, we are proud to have been selected for
10
inclusion in Mergent’s Dividend Achievers indices for 2013. This is a highly regarded series of indices that track companies with strong long-term dividend growth.
2012 Oil and Gas Reserves
We haven't completed the determination of our year-end reserve levels, but based on our preliminary estimates:
We produced approximately 280 million barrels of oil equivalent in 2012. Our total company reserve replacement ratio from all categories, including revisions, was about 143 percent, or about 400 million barrels.
Depressed domestic gas prices and changes in our plans for drilling on gas properties resulted in negative revisions in domestic gas reserves. Natural gas reserve revisions represented about 60 percent of the total revisions. If gas prices recover in the future, a portion of these reserves will be reinstated. Additionally, we experienced some negative revisions due to reservoir performance.
Our 2012 development program, excluding acquisitions and revisions, replaced about 175 percent of our production with about 490 million barrels of reserve adds. Our 2012 program, including acquisitions but excluding revisions of prior year estimates, replaced 209 percent of our production. We believe these latter two approaches are an appropriate way of evaluating the progress of our overall program.
At year end, we estimate that 72 percent of our total proved reserves were liquids. Of the total reserves, about 73 percent were proved developed reserves.
11
I will now turn to our 2013 outlook.
Production
Domestically, we expect oil production for all of 2013 to grow by about 8 percent to 10 percent from the 2012 average. With lower drilling on gas properties, we expect gas and NGL production to decline somewhat. Planned plant turnarounds in the Permian CO2 business will cause additional volatility to production in the first half of the year.
Internationally, at current prices we expect production to be lower in the first quarter due to a planned turnaround in Qatar. Production should be relatively flat the rest of the year compared to the fourth quarter of 2012.
Capital Program
We are currently in an investing phase in many of our businesses where a higher than normal portion of our capital is spent on longer-term projects. In 2013, we expect to spend about 25 percent of our total capital expenditures on projects that will make a significant contribution to our earnings and cash flow over the next several years. I have previously talked about the Al Hosn gas project. We have also started the construction of the BridgeTex pipeline, which we expect will start operations in 2014. This pipeline is designed to deliver crude oil from West Texas to the Houston area refineries, which will open up additional markets for our oil from the Permian region and improve our margins. We are also investing in gas and CO2 processing plants to expand the capacity of these facilities to handle future production growth and in a new chlor-alkali plant in the chemical business.
Our overall capital spending is expected to decline by approximately 6 percent in 2013 to $9.6 billion from the $10.2 billion we spent in 2012. The reduction in capital will come entirely from the oil and gas business where the fourth quarter spend rate was already close to the level planned for all of
12
2013. Almost all of the reductions will be made in domestic operations. Midstream capital spending will increase mainly for the BridgeTex pipeline. The 2013 program breakdown is expected to be about 75 percent in Oil and Gas, 11 percent in the Al Hosn gas project, 9 percent in domestic Midstream and the remainder in Chemical.
Following is a geographic overview of the 2013 program:
|
●
|
In domestic oil and gas, development capital will be about 46 percent of our total capital program.
|
|||
|
○
|
We expect our average operated rig count in the United States to be about 55 rigs during 2013 compared to 64 rigs in 2012, a decline of about 14 percent. We have eliminated our less productive rigs to improve our returns.
|
|||
|
○
|
Our total domestic oil and gas capital is expected to decrease about $900 million compared to 2012. Permian capital should remain flat. In California, we expect to reduce capital about $500 million from the 2012 level, which represents ongoing well cost reductions and efficiencies, a modest shift toward more conventional drilling opportunities and the constraints of the current environment. To improve the efficiency of our capital spending in California, we have planned our 2013 program level based on what we know we can execute with our existing and conservatively anticipated permits. We may revise our program during the course of the year if we can gain more certainty about the environment. In the Midcontinent, we expect to reduce spending about $400 million from our 2012 level. We have reduced our activity in higher cost unconventional oil plays, specifically in the Williston and in
|
|||
13
|
lower return gas properties, mainly in the Midcontinent and Rockies.
|
||||
|
○
|
The modest decline in rig levels, combined with well cost reductions will lead to a decline in overall U.S. oil and gas capital spending compared with 2012. However, as a result of planned efficiencies we expect to drill a similar number of wells as we did in 2012. Compared to the 2012 split, we will spend a higher percentage of our 2013 capital on oil projects, and as a result we expect our U.S. oil production to continue to grow this year.
|
|||
|
●
|
Internationally:
|
|||
|
○
|
Our total Al Hosn gas project capital will decline modestly from the 2012 levels, and will make up about 11 percent of our total capital program for the year.
|
|||
|
○
|
While Iraq’s spending levels continue to be difficult to predict reliably, capital in the rest of the Middle East region is expected to be comparable to the 2012 levels.
|
|||
|
●
|
Exploration capital should decrease about 15 percent from the 2012 spending levels and represent about 5 percent of the total capital program. The focus of the program domestically will be in the Permian basin and California, with additional international drilling in Oman.
|
|||
|
●
|
The U.S. Midstream capital will increase by about $400 million due to the BridgeTex pipeline project.
|
|||
14
|
●
|
Chemical segment capital will be about $425 million, which includes the construction of a new 182,500 ton per year membrane chlor-alkali plant in New Johnsonville, Tennessee that we expect will start operating in the fourth quarter.
|
In summary, assuming similar realized oil and gas prices to 2012 and our expectation of comparable chemical and midstream segment earnings:
|
●
|
We expect that our 2013 program will:
|
|||
|
○
|
generate cash flow from operations of about $12.7 billion; and
|
|||
|
○
|
invest about $9.6 billion in capital spending;
|
|||
|
●
|
In 2012, we returned $2.3 billion in total cash to shareholders, in the form of dividends and share repurchases, excluding the fourth quarter accelerated payout.
|
|||
|
●
|
Our dividends (excluding the fourth quarter accelerated payout) in 2012 were $1.7 billion. We expect this amount to increase in 2013, on an annualized basis, by an amount comparable to our recent dividend growth rate.
|
|||
|
●
|
We expect that a five dollar change in our realized oil prices will change cash flow from operations by about $450 million.
|
|||
Now we're ready to take your questions.
______________________
Throughout this presentation, barrels may refer to barrels of oil, barrels of liquids or barrels of oil equivalents or BOE, which includes natural gas, as the context requires.
15
|
Occidental Petroleum Corporation
|
|||||
|
Return on Equity and Capital Employed on a Core Income Basis
|
|||||
|
For the Twelve Months Ended December 31, 2012
|
|||||
|
Reconciliation to Generally Accepted Accounting Principles (GAAP)
|
|||||
|
Reported
|
Core
|
||||
|
Income
|
Income
|
||||
|
RETURN ON EQUITY (%)
|
11.8%
|
14.6%
|
|||
|
RETURN ON CAPITAL EMPLOYED (%)
|
10.3%
|
12.6%
|
|||
|
GAAP measure - net income
|
4,598
|
4,598
|
|||
|
Non-core adjustments:
|
|||||
|
Asset impairments and related items
|
-
|
1,751
|
|||
|
Tax effect of pre-tax adjustments
|
-
|
(636)
|
|||
|
Discontinued operations, net
|
-
|
37
|
|||
|
Total non-core adjustments
|
-
|
1,152
|
|||
|
Core income
|
4,598
|
5,750
|
|||
|
Interest expense
|
117
|
117
|
|||
|
Tax effect of interest expense
|
(41
|
)
|
(41
|
)
|
|
|
Earnings before tax-effected interest expense
|
4,674
|
5,826
|
|||
|
GAAP stockholders' equity
|
40,048
|
40,048
|
|||
|
Non-core adjustments
|
-
|
1,152
|
|||
|
CORE stockholders' equity
|
40,048
|
41,200
|
|||
|
Debt
|
7,623
|
7,623
|
|||
|
Total capital employed
|
47,671
|
48,823
|
|||
EXHIBIT 99.3
Investor Relations Supplemental Schedules
|
Investor Relations Supplemental Schedules
|
|||
|
Summary
|
|||
|
($ Millions, except per share amounts)
|
|||
|
4Q 2012
|
4Q 2011
|
||
|
Core Results
|
$1,479
|
$1,641
|
|
|
EPS – Diluted
|
$1.83
|
$2.02
|
|
|
Reported Net Income
|
$336
|
$1,634
|
|
|
EPS - Diluted
|
$0.42
|
$2.01
|
|
|
Total Worldwide Sales Volumes (mboe/day)
|
784
|
749
|
|
|
Total Worldwide Production Volumes (mboe/day)
|
779
|
748
|
|
|
Total Worldwide Crude Oil Realizations ($/BBL)
|
$96.19
|
$99.62
|
|
|
Total Worldwide NGL Realizations ($/BBL)
|
$45.08
|
$55.25
|
|
|
Domestic Natural Gas Realizations ($/MCF)
|
$3.09
|
$3.59
|
|
|
Wtd. Average Basic Shares O/S (mm)
|
807.1
|
810.7
|
|
|
Wtd. Average Diluted Shares O/S (mm)
|
807.7
|
811.5
|
|
|
YTD 2012
|
YTD 2011
|
||
|
Core Results
|
$5,750
|
$6,828
|
|
|
EPS - Diluted
|
$7.09
|
$8.39
|
|
|
Reported Net Income
|
$4,598
|
$6,771
|
|
|
EPS - Diluted
|
$5.67
|
$8.32
|
|
|
Total Worldwide Sales Volumes (mboe/day)
|
764
|
731
|
|
|
Total Worldwide Production Volumes (mboe/day)
|
766
|
733
|
|
|
Total Worldwide Crude Oil Realizations ($/BBL)
|
$99.87
|
$97.92
|
|
|
Total Worldwide NGL Realizations ($/BBL)
|
$45.18
|
$55.53
|
|
|
Domestic Natural Gas Realizations ($/MCF)
|
$2.62
|
$4.06
|
|
|
Wtd. Average Basic Shares O/S (mm)
|
809.3
|
812.1
|
|
|
Wtd. Average Diluted Shares O/S (mm)
|
810.0
|
812.9
|
|
|
Shares Outstanding (mm)
|
805.5
|
811.0
|
|
|
Cash Flow from Operations
|
$ 11,300
|
$ 12,300
|
|
1
Investor Relations Supplemental Schedules
|
OCCIDENTAL PETROLEUM
|
|||||||||||||
|
2012 Fourth Quarter
|
|||||||||||||
|
Net Income (Loss)
|
|||||||||||||
|
($ millions, except per share amounts)
|
|||||||||||||
|
Reported
|
Core
|
||||||||||||
|
Income
|
Significant Items Affecting Income
|
Results
|
|||||||||||
|
Oil & Gas
|
$
|
522
|
$
|
1,731
|
Asset impairments and related items
|
$
|
2,253
|
||||||
|
Chemical
|
180
|
180
|
|||||||||||
|
Midstream, marketing and other
|
75
|
75
|
|||||||||||
|
Corporate
|
|||||||||||||
|
Interest expense, net
|
(30
|
)
|
(30
|
)
|
|||||||||
|
Other
|
(134
|
)
|
20
|
Litigation reserves
|
(114
|
)
|
|||||||
|
Taxes
|
(249
|
)
|
(636
|
)
|
Tax effect of adjustments
|
(885
|
)
|
||||||
|
Income from continuing operations
|
364
|
1,115
|
1,479
|
||||||||||
|
Discontinued operations, net of tax
|
(28
|
)
|
28
|
Discontinued operations, net
|
-
|
||||||||
|
Net Income
|
$
|
336
|
$
|
1,143
|
$
|
1,479
|
|||||||
|
Basic Earnings Per Common Share
|
|||||||||||||
|
Income from continuing operations
|
$
|
0.45
|
|||||||||||
|
Discontinued operations, net
|
(0.03
|
)
|
|||||||||||
|
Net Income
|
$
|
0.42
|
$
|
1.83
|
|||||||||
|
Diluted Earnings Per Common Share
|
|||||||||||||
|
Income from continuing operations
|
$
|
0.45
|
|||||||||||
|
Discontinued operations, net
|
(0.03
|
)
|
|||||||||||
|
Net Income
|
$
|
0.42
|
$
|
1.83
|
|||||||||
2
Investor Relations Supplemental Schedules
|
OCCIDENTAL PETROLEUM
|
|||||||||||||
|
2011 Fourth Quarter
|
|||||||||||||
|
Net Income (Loss)
|
|||||||||||||
|
($ millions, except per share amounts)
|
|||||||||||||
|
Reported
|
Core
|
||||||||||||
|
Income
|
Significant Items Affecting Income
|
Results
|
|||||||||||
|
Oil & Gas
|
$
|
2,537
|
$
|
2,537
|
|||||||||
|
Chemical
|
144
|
144
|
|||||||||||
|
Midstream, marketing and other
|
70
|
70
|
|||||||||||
|
Corporate
|
|||||||||||||
|
Interest expense, net
|
(25
|
)
|
(25
|
)
|
|||||||||
|
Other
|
(136
|
)
|
(136
|
)
|
|||||||||
|
Taxes
|
(949
|
)
|
(949
|
)
|
|||||||||
|
Income from continuing operations
|
1,641
|
-
|
1,641
|
||||||||||
|
Discontinued operations, net of tax
|
(7
|
)
|
7
|
Discontinued operations, net
|
-
|
||||||||
|
Net Income
|
$
|
1,634
|
$
|
7
|
$
|
1,641
|
|||||||
|
Basic Earnings Per Common Share
|
|||||||||||||
|
Income from continuing operations
|
$
|
2.02
|
|||||||||||
|
Discontinued operations, net
|
(0.01
|
)
|
|||||||||||
|
Net Income
|
$
|
2.01
|
$
|
2.02
|
|||||||||
|
Diluted Earnings Per Common Share
|
|||||||||||||
|
Income from continuing operations
|
$
|
2.02
|
|||||||||||
|
Discontinued operations, net
|
(0.01)
|
||||||||||||
|
Net Income
|
$
|
2.01
|
$
|
2.02
|
|||||||||
3
Investor Relations Supplemental Schedules
|
OCCIDENTAL PETROLEUM
|
|||||||||||||
|
2012 Twelve Months
|
|||||||||||||
|
Net Income (Loss)
|
|||||||||||||
|
($ millions, except per share amounts)
|
|||||||||||||
|
Reported
|
Core
|
||||||||||||
|
Income
|
Significant Items Affecting Income
|
Results
|
|||||||||||
|
Oil & Gas
|
$
|
7,095
|
$
|
1,731
|
Asset impairments and related items
|
$
|
8,826
|
||||||
|
Chemical
|
720
|
720
|
|||||||||||
|
Midstream, marketing and other
|
439
|
439
|
|||||||||||
|
Corporate
|
|||||||||||||
|
Interest expense, net
|
(117
|
)
|
(117
|
)
|
|||||||||
|
Other
|
(384
|
)
|
20
|
Litigation reserves
|
(364
|
)
|
|||||||
|
Taxes
|
(3,118
|
)
|
(636
|
)
|
Tax effect of adjustments
|
(3,754
|
)
|
||||||
|
Income from continuing operations
|
4,635
|
1,115
|
5,750
|
||||||||||
|
Discontinued operations, net of tax
|
(37
|
)
|
37
|
Discontinued operations, net
|
-
|
||||||||
|
Net Income
|
$
|
4,598
|
$
|
1,152
|
$
|
5,750
|
|||||||
|
Basic Earnings Per Common Share
|
|||||||||||||
|
Income from continuing operations
|
$
|
5.72
|
|||||||||||
|
Discontinued operations, net
|
(0.05
|
)
|
|||||||||||
|
Net Income
|
$
|
5.67
|
$
|
7.09
|
|||||||||
|
Diluted Earnings Per Common Share
|
|||||||||||||
|
Income from continuing operations
|
$
|
5.71
|
|||||||||||
|
Discontinued operations, net
|
(0.04
|
)
|
|||||||||||
|
Net Income
|
$
|
5.67
|
$
|
7.09
|
|||||||||
4
Investor Relations Supplemental Schedules
|
OCCIDENTAL PETROLEUM
|
|||||||||||||
|
2011 Twelve Months
|
|||||||||||||
|
Net Income (Loss)
|
|||||||||||||
|
($ millions, except per share amounts)
|
|||||||||||||
|
Reported
|
Core
|
||||||||||||
|
Income
|
Significant Items Affecting Income
|
Results
|
|||||||||||
|
Oil & Gas
|
$
|
10,241
|
$
|
35
|
Libya exploration write-off
|
$
|
10,283
|
||||||
|
(22
|
)
|
Gain on sale of Colombia pipeline interest
|
|||||||||||
|
29
|
Foreign tax
|
||||||||||||
|
Chemical
|
861
|
861
|
|||||||||||
|
Midstream, marketing and other
|
448
|
448
|
|||||||||||
|
Corporate
|
|||||||||||||
|
Interest expense, net
|
(284
|
)
|
163
|
Premium on debt extinguishments
|
(121
|
)
|
|||||||
|
Other
|
(425
|
)
|
(425
|
)
|
|||||||||
|
Taxes
|
(4,201
|
)
|
(50
|
)
|
Tax effect of adjustments
|
(4,218
|
)
|
||||||
|
33
|
State income tax charge
|
||||||||||||
|
Income from continuing operations
|
6,640
|
188
|
6,828
|
||||||||||
|
Discontinued operations, net of tax
|
131
|
(131
|
)
|
Discontinued operations, net
|
-
|
||||||||
|
Net Income
|
$
|
6,771
|
$
|
57
|
$
|
6,828
|
|||||||
|
Basic Earnings Per Common Share
|
|||||||||||||
|
Income from continuing operations
|
$
|
8.16
|
|||||||||||
|
Discontinued operations, net
|
0.16
|
||||||||||||
|
Net Income
|
$
|
8.32
|
$
|
8.39
|
|||||||||
|
Diluted Earnings Per Common Share
|
|||||||||||||
|
Income from continuing operations
|
$
|
8.16
|
|||||||||||
|
Discontinued operations, net
|
0.16
|
||||||||||||
|
Net Income
|
$
|
8.32
|
$
|
8.39
|
|||||||||
5
Investor Relations Supplemental Schedules
|
OCCIDENTAL PETROLEUM
|
||||||||||||||
|
Worldwide Effective Tax Rate
|
||||||||||||||
|
QUARTERLY
|
YEAR-TO-DATE
|
|||||||||||||
|
2012
|
2012
|
2011
|
2012
|
2011
|
||||||||||
|
REPORTED INCOME
|
QTR 4
|
QTR 3
|
QTR 4
|
12 Months
|
12 Months
|
|||||||||
|
Oil & Gas
|
522
|
2,026
|
2,537
|
7,095
|
10,241
|
|||||||||
|
Chemical
|
180
|
162
|
144
|
720
|
861
|
|||||||||
|
Midstream, marketing and other
|
75
|
156
|
70
|
439
|
448
|
|||||||||
|
Corporate & other
|
(164
|
)
|
(110
|
)
|
(161
|
)
|
(501
|
)
|
(709
|
)
|
||||
|
Pre-tax income
|
613
|
2,234
|
2,590
|
7,753
|
10,841
|
|||||||||
|
Income tax expense
|
||||||||||||||
|
Federal and state
|
(293
|
)
|
286
|
435
|
694
|
1,795
|
||||||||
|
Foreign
|
542
|
569
|
514
|
2,424
|
2,406
|
|||||||||
|
Total
|
249
|
855
|
949
|
3,118
|
4,201
|
|||||||||
|
Income from continuing operations
|
364
|
1,379
|
1,641
|
4,635
|
6,640
|
|||||||||
|
Worldwide effective tax rate
|
41%
|
38%
|
37%
|
40%
|
39%
|
|||||||||
|
2012
|
2012
|
2011
|
2012
|
2011
|
||||||||||
|
CORE RESULTS
|
QTR 4
|
QTR 3
|
QTR 4
|
12 Months
|
12 Months
|
|||||||||
|
Oil & Gas
|
2,253
|
2,026
|
2,537
|
8,826
|
10,283
|
|||||||||
|
Chemical
|
180
|
162
|
144
|
720
|
861
|
|||||||||
|
Midstream, marketing and other
|
75
|
156
|
70
|
439
|
448
|
|||||||||
|
Corporate & other
|
(144
|
)
|
(110
|
)
|
(161
|
)
|
(481
|
)
|
(546
|
)
|
||||
|
Pre-tax income
|
2,364
|
2,234
|
2,590
|
9,504
|
11,046
|
|||||||||
|
Income tax expense
|
||||||||||||||
|
Federal and state
|
343
|
286
|
435
|
1,330
|
1,825
|
|||||||||
|
Foreign
|
542
|
569
|
514
|
2,424
|
2,393
|
|||||||||
|
Total
|
885
|
855
|
949
|
3,754
|
4,218
|
|||||||||
|
Core results
|
1,479
|
1,379
|
1,641
|
5,750
|
6,828
|
|||||||||
|
Worldwide effective tax rate
|
37%
|
38%
|
37%
|
39%
|
38%
|
|||||||||
6
Investor Relations Supplemental Schedules
|
OCCIDENTAL PETROLEUM
|
||||||||||||
|
2012 Fourth Quarter Net Income (Loss)
|
||||||||||||
|
Reported Income Comparison
|
||||||||||||
|
Fourth
|
Third
|
|||||||||||
|
Quarter
|
Quarter
|
|||||||||||
|
2012
|
2012
|
B / (W)
|
||||||||||
|
Oil & Gas
|
$
|
522
|
$
|
2,026
|
$
|
(1,504
|
)
|
|||||
|
Chemical
|
180
|
162
|
18
|
|||||||||
|
Midstream, marketing and other
|
75
|
156
|
(81
|
)
|
||||||||
|
Corporate
|
||||||||||||
|
Interest expense, net
|
(30
|
)
|
(34
|
)
|
4
|
|||||||
|
Other
|
(134
|
)
|
(76
|
)
|
(58
|
)
|
||||||
|
Taxes
|
(249
|
)
|
(855
|
)
|
606
|
|||||||
|
Income from continuing operations
|
364
|
1,379
|
(1,015
|
)
|
||||||||
|
Discontinued operations, net
|
(28
|
)
|
(4
|
)
|
(24
|
)
|
||||||
|
Net Income
|
$
|
336
|
$
|
1,375
|
$
|
(1,039
|
)
|
|||||
|
Earnings Per Common Share
|
||||||||||||
|
Basic
|
$
|
0.42
|
$
|
1.69
|
$
|
(1.27
|
)
|
|||||
|
Diluted
|
$
|
0.42
|
$
|
1.69
|
$
|
(1.27
|
)
|
|||||
|
Worldwide Effective Tax Rate
|
41%
|
38%
|
-3%
|
|||||||||
|
OCCIDENTAL PETROLEUM
|
||||||||||||
|
2012 Fourth Quarter Net Income (Loss)
|
||||||||||||
|
Core Results Comparison
|
||||||||||||
|
Fourth
|
Third
|
|||||||||||
|
Quarter
|
Quarter
|
|||||||||||
|
2012
|
2012
|
B / (W)
|
||||||||||
|
Oil & Gas
|
$
|
2,253
|
$
|
2,026
|
$
|
227
|
||||||
|
Chemical
|
180
|
162
|
18
|
|||||||||
|
Midstream, marketing and other
|
75
|
156
|
(81
|
)
|
||||||||
|
Corporate
|
||||||||||||
|
Interest expense, net
|
(30
|
)
|
(34
|
)
|
4
|
|||||||
|
Other
|
(114
|
)
|
(76
|
)
|
(38
|
)
|
||||||
|
Taxes
|
(885
|
)
|
(855
|
)
|
(30
|
)
|
||||||
|
Core Results
|
$
|
1,479
|
$
|
1,379
|
$
|
100
|
||||||
|
Core Results Per Common Share
|
||||||||||||
|
Basic
|
$
|
1.83
|
$
|
1.70
|
$
|
0.13
|
||||||
|
Diluted
|
$
|
1.83
|
$
|
1.70
|
$
|
0.13
|
||||||
|
Worldwide Effective Tax Rate
|
37%
|
38%
|
1%
|
|||||||||
7
Investor Relations Supplemental Schedules
8
Investor Relations Supplemental Schedules
|
OCCIDENTAL PETROLEUM
|
||||||||||||
|
2012 Fourth Quarter Net Income (Loss)
|
||||||||||||
|
Reported Income Comparison
|
||||||||||||
|
Fourth
|
Fourth
|
|||||||||||
|
Quarter
|
Quarter
|
|||||||||||
|
2012
|
2011
|
B / (W)
|
||||||||||
|
Oil & Gas
|
$
|
522
|
$
|
2,537
|
$
|
(2,015
|
)
|
|||||
|
Chemical
|
180
|
144
|
36
|
|||||||||
|
Midstream, marketing and other
|
75
|
70
|
5
|
|||||||||
|
Corporate
|
||||||||||||
|
Interest expense, net
|
(30
|
)
|
(25
|
)
|
(5
|
)
|
||||||
|
Other
|
(134
|
)
|
(136
|
)
|
2
|
|||||||
|
Taxes
|
(249
|
)
|
(949
|
)
|
700
|
|||||||
|
Income from continuing operations
|
364
|
1,641
|
(1,277
|
)
|
||||||||
|
Discontinued operations, net
|
(28
|
)
|
(7
|
)
|
(21
|
)
|
||||||
|
Net Income
|
$
|
336
|
$
|
1,634
|
$
|
(1,298
|
)
|
|||||
|
Earnings Per Common Share
|
||||||||||||
|
Basic
|
$
|
0.42
|
$
|
2.01
|
$
|
(1.59
|
)
|
|||||
|
Diluted
|
$
|
0.42
|
$
|
2.01
|
$
|
(1.59
|
)
|
|||||
|
Worldwide Effective Tax Rate
|
41%
|
37%
|
-4%
|
|||||||||
|
OCCIDENTAL PETROLEUM
|
||||||||||||
|
2012 Fourth Quarter Net Income (Loss)
|
||||||||||||
|
Core Results Comparison
|
||||||||||||
|
Fourth
|
Fourth
|
|||||||||||
|
Quarter
|
Quarter
|
|||||||||||
|
2012
|
2011
|
B / (W)
|
||||||||||
|
Oil & Gas
|
$
|
2,253
|
$
|
2,537
|
$
|
(284
|
)
|
|||||
|
Chemical
|
180
|
144
|
36
|
|||||||||
|
Midstream, marketing and other
|
75
|
70
|
5
|
|||||||||
|
Corporate
|
||||||||||||
|
Interest expense, net
|
(30
|
)
|
(25
|
)
|
(5
|
)
|
||||||
|
Other
|
(114
|
)
|
(136
|
)
|
22
|
|||||||
|
Taxes
|
(885
|
)
|
(949
|
)
|
64
|
|||||||
|
Core Results
|
$
|
1,479
|
$
|
1,641
|
$
|
(162
|
)
|
|||||
|
Core Results Per Common Share
|
||||||||||||
|
Basic
|
$
|
1.83
|
$
|
2.02
|
$
|
(0.19
|
)
|
|||||
|
Diluted
|
$
|
1.83
|
$
|
2.02
|
$
|
(0.19
|
)
|
|||||
|
Worldwide Effective Tax Rate
|
37%
|
37%
|
0%
|
|||||||||
9
Investor Relations Supplemental Schedules
10
Investor Relations Supplemental Schedules
|
OCCIDENTAL PETROLEUM
|
||||||||||||||
|
SUMMARY OF OPERATING STATISTICS
|
||||||||||||||
|
Fourth Quarter
|
Twelve Months
|
|||||||||||||
|
2012
|
2011
|
2012
|
2011
|
|||||||||||
|
NET PRODUCTION PER DAY:
|
||||||||||||||
|
United States
|
||||||||||||||
|
Crude Oil (MBBL)
|
||||||||||||||
|
California
|
92
|
84
|
88
|
80
|
||||||||||
|
Permian
|
146
|
137
|
142
|
134
|
||||||||||
|
Midcontinent and other
|
27
|
19
|
25
|
16
|
||||||||||
|
Total
|
265
|
240
|
255
|
230
|
||||||||||
|
NGL (MBBL)
|
||||||||||||||
|
California
|
21
|
15
|
17
|
15
|
||||||||||
|
Permian
|
40
|
37
|
39
|
38
|
||||||||||
|
Midcontinent and other
|
16
|
18
|
17
|
16
|
||||||||||
|
Total
|
77
|
70
|
73
|
69
|
||||||||||
|
Natural Gas (MMCF)
|
||||||||||||||
|
California
|
242
|
276
|
256
|
260
|
||||||||||
|
Permian
|
162
|
167
|
155
|
157
|
||||||||||
|
Midcontinent and other
|
396
|
390
|
410
|
365
|
||||||||||
|
Total
|
800
|
833
|
821
|
782
|
||||||||||
|
Latin America
|
||||||||||||||
|
Crude Oil (MBBL)
|
Colombia
|
30
|
28
|
29
|
29
|
|||||||||
|
Natural Gas (MMCF)
|
Bolivia
|
12
|
14
|
13
|
15
|
|||||||||
|
Middle East / North Africa
|
||||||||||||||
|
Crude Oil (MBBL)
|
||||||||||||||
|
Bahrain
|
4
|
5
|
4
|
4
|
||||||||||
|
Dolphin
|
7
|
9
|
8
|
9
|
||||||||||
|
Oman
|
74
|
67
|
67
|
67
|
||||||||||
|
Qatar
|
71
|
76
|
71
|
73
|
||||||||||
|
Other
|
36
|
33
|
36
|
38
|
||||||||||
|
Total
|
192
|
190
|
186
|
191
|
||||||||||
|
NGL (MBBL)
|
Dolphin
|
7
|
9
|
8
|
10
|
|||||||||
|
Other
|
-
|
-
|
1
|
-
|
||||||||||
|
Total
|
7
|
9
|
9
|
10
|
||||||||||
|
Natural Gas (MMCF)
|
||||||||||||||
|
Bahrain
|
242
|
180
|
232
|
173
|
||||||||||
|
Dolphin
|
138
|
181
|
163
|
199
|
||||||||||
|
Oman
|
56
|
58
|
57
|
54
|
||||||||||
|
Total
|
436
|
419
|
452
|
426
|
||||||||||
|
Barrels of Oil Equivalent (MBOE)
|
779
|
748
|
766
|
733
|
||||||||||
11
Investor Relations Supplemental Schedules
|
OCCIDENTAL PETROLEUM
|
||||||||||||||
|
SUMMARY OF OPERATING STATISTICS
|
||||||||||||||
|
Fourth Quarter
|
Twelve Months
|
|||||||||||||
|
2012
|
2011
|
2012
|
2011
|
|||||||||||
|
NET SALES VOLUMES PER DAY:
|
||||||||||||||
|
United States
|
||||||||||||||
|
Crude Oil (MBBL)
|
265
|
240
|
255
|
230
|
||||||||||
|
NGL (MBBL)
|
77
|
70
|
73
|
69
|
||||||||||
|
Natural Gas (MMCF)
|
800
|
833
|
819
|
782
|
||||||||||
|
Latin America
|
||||||||||||||
|
Crude Oil (MBBL)
|
30
|
32
|
28
|
29
|
||||||||||
|
Natural Gas (MMCF)
|
12
|
14
|
13
|
15
|
||||||||||
|
Middle East / North Africa
|
||||||||||||||
|
Crude Oil (MBBL)
|
||||||||||||||
|
Bahrain
|
4
|
5
|
4
|
4
|
||||||||||
|
Dolphin
|
7
|
9
|
8
|
9
|
||||||||||
|
Oman
|
70
|
66
|
66
|
69
|
||||||||||
|
Qatar
|
75
|
75
|
71
|
73
|
||||||||||
|
Other
|
39
|
31
|
36
|
34
|
||||||||||
|
Total
|
195
|
186
|
185
|
189
|
||||||||||
|
NGL (MBBL)
|
Dolphin
|
7
|
10
|
8
|
10
|
|||||||||
|
Other
|
2
|
-
|
1
|
-
|
||||||||||
|
Total
|
9
|
10
|
9
|
10
|
||||||||||
|
Natural Gas (MMCF)
|
436
|
419
|
452
|
426
|
||||||||||
|
Barrels of Oil Equivalent (MBOE)
|
784
|
749
|
764
|
731
|
||||||||||
12
Investor Relations Supplemental Schedules
|
OCCIDENTAL PETROLEUM
|
|||||||||||||||||
|
SUMMARY OF OPERATING STATISTICS
|
|||||||||||||||||
|
Fourth Quarter
|
Twelve Months
|
||||||||||||||||
|
2012
|
2011
|
2012
|
2011
|
||||||||||||||
|
OIL & GAS:
|
|||||||||||||||||
|
PRICES
|
|||||||||||||||||
|
United States
|
|||||||||||||||||
|
Crude Oil ($/BBL)
|
87.81
|
94.50
|
93.72
|
92.80
|
|||||||||||||
|
NGL ($/BBL)
|
44.54
|
58.85
|
46.07
|
59.10
|
|||||||||||||
|
Natural gas ($/MCF)
|
3.09
|
3.59
|
2.62
|
4.06
|
|||||||||||||
|
Latin America
|
|||||||||||||||||
|
Crude Oil ($/BBL)
|
97.95
|
100.66
|
98.35
|
97.16
|
|||||||||||||
|
Natural Gas ($/MCF)
|
11.56
|
11.63
|
11.85
|
10.11
|
|||||||||||||
|
Middle East / North Africa
|
|||||||||||||||||
|
Crude Oil ($/BBL)
|
107.50
|
106.20
|
108.76
|
104.34
|
|||||||||||||
|
NGL ($/BBL)
|
49.14
|
29.17
|
37.74
|
32.09
|
|||||||||||||
|
Total Worldwide
|
|||||||||||||||||
|
Crude Oil ($/BBL)
|
96.19
|
99.62
|
99.87
|
97.92
|
|||||||||||||
|
NGL ($/BBL)
|
45.08
|
55.25
|
45.18
|
55.53
|
|||||||||||||
|
Natural Gas ($/MCF)
|
2.35
|
2.76
|
2.06
|
3.01
|
|||||||||||||
|
Fourth Quarter
|
Twelve Months
|
||||||||||||||||
|
2012
|
2011
|
2012
|
2011
|
||||||||||||||
|
Exploration Expense
|
|||||||||||||||||
|
United States
|
|
$
|
46
|
$
|
71
|
$
|
232
|
$
|
204
|
||||||||
|
Latin America
|
1
|
-
|
2
|
1
|
|||||||||||||
|
Middle East / North Africa
|
35
|
2
|
111
|
53
|
|||||||||||||
|
TOTAL REPORTED
|
$
|
82
|
$
|
73
|
$
|
345
|
$
|
258
|
|||||||||
|
Less - non-core impairments
|
-
|
-
|
-
|
(35
|
)
|
||||||||||||
|
TOTAL CORE
|
$
|
82
|
$
|
73
|
$
|
345
|
$
|
223
|
|||||||||
13
Investor Relations Supplemental Schedules
|
OCCIDENTAL PETROLEUM
|
||||||||||||||||
|
SUMMARY OF OPERATING STATISTICS
|
||||||||||||||||
|
Fourth Quarter
|
Twelve Months
|
|||||||||||||||
|
Capital Expenditures ($MM)
|
2012
|
2011
|
2012
|
2011
|
||||||||||||
|
Oil & Gas
|
||||||||||||||||
|
California
|
$
|
382
|
$
|
515
|
$
|
2,029
|
$
|
1,717
|
||||||||
|
Permian
|
424
|
385
|
1,920
|
1,146
|
||||||||||||
|
Midcontinent and other
|
204
|
433
|
1,324
|
1,158
|
||||||||||||
|
Latin America
|
124
|
79
|
309
|
218
|
||||||||||||
|
Middle East / North Africa
|
638
|
492
|
2,016
|
1,485
|
||||||||||||
|
Exploration
|
108
|
130
|
622
|
421
|
||||||||||||
|
Chemical
|
165
|
116
|
357
|
234
|
||||||||||||
|
Midstream, marketing and other
|
440
|
388
|
1,558
|
1,089
|
||||||||||||
|
Corporate
|
25
|
11
|
91
|
50
|
||||||||||||
|
TOTAL
|
$
|
2,510
|
$
|
2,549
|
$
|
10,226
|
$
|
7,518
|
||||||||
|
Depreciation, Depletion &
|
Fourth Quarter
|
Twelve Months
|
||||||||||||||
|
Amortization of Assets ($MM)
|
2012
|
2011
|
2012
|
2011
|
||||||||||||
|
Oil & Gas
|
||||||||||||||||
|
Domestic
|
$
|
628
|
$
|
489
|
$
|
2,412
|
$
|
1,754
|
||||||||
|
Latin America
|
31
|
23
|
117
|
90
|
||||||||||||
|
Middle East / North Africa
|
385
|
300
|
1,404
|
1,220
|
||||||||||||
|
Chemical
|
88
|
81
|
345
|
330
|
||||||||||||
|
Midstream, marketing and other
|
52
|
39
|
206
|
173
|
||||||||||||
|
Corporate
|
7
|
6
|
27
|
24
|
||||||||||||
|
TOTAL
|
$
|
1,191
|
$
|
938
|
$
|
4,511
|
$
|
3,591
|
||||||||
14
Investor Relations Supplemental Schedules
|
OCCIDENTAL PETROLEUM
|
||||||||||||
|
CORPORATE
|
||||||||||||
|
($ millions)
|
||||||||||||
|
31-Dec-12
|
31-Dec-11
|
|||||||||||
|
CAPITALIZATION
|
||||||||||||
|
Long-Term Debt (including short-term borrowings)
|
$
|
7,623
|
$
|
5,871
|
||||||||
|
EQUITY
|
$
|
40,048
|
$
|
37,620
|
||||||||
|
Total Debt To Total Capitalization
|
16%
|
13%
|
||||||||||
15
EXHIBIT 99.4
Occidental Petroleum Corporation
Fourth Quarter 2012 Earnings Conference Call
January 31, 2013
1
Fourth Quarter 2012 Earnings - Highlights
• Core Income - $1.5 billion in 4Q12 vs. $1.6 billion in
4Q11 or $1.4 billion in 3Q12.
4Q11 or $1.4 billion in 3Q12.
– EPS $1.83 (diluted) vs. $2.02 (diluted) in 4Q11 or $1.70 in 3Q12.
– The improvement from 3Q12 reflected the effect of higher liquids
production, higher realized NGL and domestic gas prices and
reduced operating expenses in the oil and gas business,
partially offset by lower earnings in the midstream segment.
production, higher realized NGL and domestic gas prices and
reduced operating expenses in the oil and gas business,
partially offset by lower earnings in the midstream segment.
• Pre-tax charges of $1.8 billion, representing $1.1 billion
after-tax or $1.41 per diluted share.
after-tax or $1.41 per diluted share.
– Almost all of the charges were for impairments in the Oil and
Gas Midcontinent business units, over 90% of which was related
to natural gas properties, which were acquired more than four
years ago on average.
Gas Midcontinent business units, over 90% of which was related
to natural gas properties, which were acquired more than four
years ago on average.
2
2
Fourth Quarter 2012 Earnings - Highlights
• Pre-tax charges of $1.8 billion (cont’d):
– While the performance of the properties was generally as expected,
natural gas prices have declined by ~50% since the acquisitions.
natural gas prices have declined by ~50% since the acquisitions.
– Natural gas and NGL prices used for reserve calculations in 2012 were
significantly lower than prices used in 2011, resulting in declines in
economically feasible reserves in these properties.
significantly lower than prices used in 2011, resulting in declines in
economically feasible reserves in these properties.
– In addition, despite the recent modest increase in gas prices, drilling in
many gassy areas remains uneconomical.
many gassy areas remains uneconomical.
– As a result, we continue to operate at minimal levels in these areas.
– The charges related to the natural gas properties reflect the impairment
of such properties to approximate fair value.
of such properties to approximate fair value.
• Net income after the 4Q12 charge was $336 million, or
$0.42 per diluted share.
$0.42 per diluted share.
3
3
4
Fourth Quarter 2012 Earnings - Oil & Gas Segment
Variance Analysis - 4Q12 vs. 3Q12
Variance Analysis - 4Q12 vs. 3Q12
Fourth Quarter 2012 Earnings - Oil & Gas Segment
Variance Analysis - 4Q12 vs. 3Q12
Variance Analysis - 4Q12 vs. 3Q12
• Core Results for 4Q12 of $2.3 B vs. $2.0 B in 3Q12 or $2.5 B in 4Q11
– We delivered a quarter-over-quarter improvement, despite the decline in WTI prices, as a
result of higher liquids production, higher realized NGL and domestic gas prices and,
importantly, lower operating expenses.
result of higher liquids production, higher realized NGL and domestic gas prices and,
importantly, lower operating expenses.
($ in millions)
4
5
• 4Q12 production costs were $14.95 per barrel, which
was $1.04 per barrel lower than 3Q12.
was $1.04 per barrel lower than 3Q12.
– These reductions occurred during the course of the quarter and
our year-end exit rate on a per barrel basis was lower than the
4Q11 average and well below the 4Q12 level, giving us
confidence as we begin 2013.
our year-end exit rate on a per barrel basis was lower than the
4Q11 average and well below the 4Q12 level, giving us
confidence as we begin 2013.
• Oil and gas production costs were $14.99 per barrel for
the twelve months of 2012, compared with $12.84 per
barrel for the full year of 2011.
the twelve months of 2012, compared with $12.84 per
barrel for the full year of 2011.
Fourth Quarter 2012 Earnings - Oil & Gas Segment
Production Costs
Production Costs
Fourth Quarter 2012 Earnings - Oil & Gas Segment
Production Costs
Production Costs
5
6
4Q12 4Q11 3Q12
• Oil and Gas Production (mboe/d) 779 748 766
• 4Q12 production of 779 mboe/d increased 4% from 4Q11, and a new
company record;
company record;
• ~6 mboe/d, or almost half of the total sequential increase in quarterly
production came from domestic operations, mainly in California and
Permian, almost all of which was attributable to higher oil production.
production came from domestic operations, mainly in California and
Permian, almost all of which was attributable to higher oil production.
• Domestic production was 475 mboe/d, an increase of 6 mboe/d from 3Q12
and the ninth consecutive quarterly domestic volume record for the
company.
and the ninth consecutive quarterly domestic volume record for the
company.
– Production was 6% higher than 4Q11.
– All of the net sequential quarterly increase came from oil production in California
and Permian.
and Permian.
– Domestic gas production was down slightly from 3Q12, which was offset by higher
liquids production resulting from higher yields from our new Elk Hills gas plant.
liquids production resulting from higher yields from our new Elk Hills gas plant.
Fourth Quarter 2012 Earnings - Oil & Gas Segment
Production Volumes
Production Volumes
Details regarding country-specific production levels available in the IR Supplemental Schedules
6
7
• Latin America volumes were 32 mboe/d, which was flat
compared to 3Q12 and the same period in 2011.
compared to 3Q12 and the same period in 2011.
• In the Middle East, volumes were 272 mboe/d, an increase
of 7 mboe/d from 3Q12.
of 7 mboe/d from 3Q12.
– Higher spending levels in Iraq and Oman resulted in 8 mboe/d higher
production.
production.
– Dolphin production was lower due to the full cost recovery of pre-
startup capital.
startup capital.
• Other factors affecting production sharing and similar
contracts, including oil prices, did not significantly impact this
quarter’s production volumes compared to 4Q11 or 3Q12.
contracts, including oil prices, did not significantly impact this
quarter’s production volumes compared to 4Q11 or 3Q12.
Fourth Quarter 2012 Earnings - Oil & Gas Segment
Production Volumes
Production Volumes
Fourth Quarter 2012 Earnings - Oil & Gas Segment
Production Volumes
Production Volumes
Details regarding country specific production levels available in the IR Supplemental Schedules
7
8
Fourth Quarter 2012 Earnings - Oil & Gas Segment
4Q12 4Q11
Reported Segment Income ($mm) $522 $2,537
WTI Oil Price ($/bbl) $88.18 $94.06
Brent Oil Price ($/bbl) $110.08 $109.07
NYMEX Gas Price ($/mcf) $3.37 $3.68
Oxy’s Realized Prices
Worldwide Oil ($/bbl) $96.19 $99.62
-3% year-over-year
Worldwide NGLs ($/bbl) $45.08 $55.25
-18% year-over-year
US Natural Gas ($/mcf) $3.09 $3.59
-14% year-over-year
8
9
• Realized oil prices for 4Q12 represented 109% of the average
WTI price and 87% of the average Brent price.
WTI price and 87% of the average Brent price.
• Realized NGL prices were 51% of the average WTI price and
realized domestic gas prices were 92% of the average NYMEX
price.
realized domestic gas prices were 92% of the average NYMEX
price.
• At current global prices, a $1 p/bbl change in oil prices affects
our quarterly earnings before income taxes by $37 mm and
$7 mm for a $1 p/bbl change in NGL prices.
our quarterly earnings before income taxes by $37 mm and
$7 mm for a $1 p/bbl change in NGL prices.
• A change in domestic gas prices of 50 cents per mmBTUs
affects quarterly pre-tax earnings by about $30 mm.
affects quarterly pre-tax earnings by about $30 mm.
• These price change sensitivities include the impact of
production-sharing and similar contract volume changes.
production-sharing and similar contract volume changes.
Fourth Quarter 2012 Earnings - Oil & Gas Segment
Realized Prices
Realized Prices
Fourth Quarter 2012 Earnings - Oil & Gas Segment
Realized Prices
Realized Prices
9
10
• Taxes other than on income, which are generally related to
product prices, were $2.39 per boe for the full year of 2012,
compared with $2.21 per boe for the full year of 2011.
product prices, were $2.39 per boe for the full year of 2012,
compared with $2.21 per boe for the full year of 2011.
• 4Q12 exploration expense was $82 mm.
– We expect 1Q13 exploration expense to be about $90 mm for seismic
and drilling in our exploration programs.
and drilling in our exploration programs.
• Our 4Q12 DD&A rate was $14.47 per boe and we expect the
full year 2013 rate to be ~$17 per barrel.
full year 2013 rate to be ~$17 per barrel.
Fourth Quarter 2012 Earnings - Oil & Gas Segment
Taxes, Exploration Expense and DD&A
Taxes, Exploration Expense and DD&A
Fourth Quarter 2012 Earnings - Oil & Gas Segment
Taxes, Exploration Expense and DD&A
Taxes, Exploration Expense and DD&A
10
11
Fourth Quarter 2012 Earnings - Chemical Segment
Variance Analysis - 4Q12 vs. 3Q12
Variance Analysis - 4Q12 vs. 3Q12
Fourth Quarter 2012 Earnings - Chemical Segment
Variance Analysis - 4Q12 vs. 3Q12
Variance Analysis - 4Q12 vs. 3Q12
• Core Results in 4Q12 of $180 mm vs. $162 mm in 3Q12 and $144 mm in 4Q11
– The sequential quarterly improvement reflected higher caustic soda and PVC prices, partially
offset by higher energy and feedstock costs. The year-over-year increase reflected higher
export volumes for caustic soda and VCM and lower feedstock costs.
offset by higher energy and feedstock costs. The year-over-year increase reflected higher
export volumes for caustic soda and VCM and lower feedstock costs.
($ in millions)
* Higher energy and feedstock costs
11
12
• Chemical segment 1Q13 earnings are expected to be
~$150 mm.
~$150 mm.
– Typical weak seasonal demand, particularly in the construction
and agricultural market segments combined with the recent
increases in ethylene and natural gas costs may, however,
tighten margins in the first quarter.
and agricultural market segments combined with the recent
increases in ethylene and natural gas costs may, however,
tighten margins in the first quarter.
Fourth Quarter 2012 Earnings - Chemical Segment
Fourth Quarter 2012 Earnings - Chemical Segment
12
13
Fourth Quarter 2012 Earnings - Midstream
Segment Variance Analysis - 4Q12 vs. 3Q12
Segment Variance Analysis - 4Q12 vs. 3Q12
Fourth Quarter 2012 Earnings - Midstream
Segment Variance Analysis - 4Q12 vs. 3Q12
Segment Variance Analysis - 4Q12 vs. 3Q12
• Core Results for 4Q12 were $75 mm vs. $156 mm in 3Q12 and $70 mm in 4Q11
– The 2012 sequential quarterly decrease in earnings was caused by lower marketing and trading,
foreign pipeline and power generation earnings.
foreign pipeline and power generation earnings.
($ in millions)
13
14
• The worldwide effective tax rate on core income was 37% for
the 4Q12.
the 4Q12.
• The rate was lower than the prior quarter and our guidance,
largely due to a higher proportion of domestic income in
4Q12 than foreign income.
largely due to a higher proportion of domestic income in
4Q12 than foreign income.
• Our 4Q12 U.S. and foreign tax rates are included in the
Investor Relations Supplemental Schedules.
Investor Relations Supplemental Schedules.
• We expect our combined worldwide tax rate in 1Q13 to
increase to about 40%.
increase to about 40%.
Fourth Quarter 2012 Earnings - Income Taxes
Fourth Quarter 2012 Earnings - Income Taxes
14
15
Fourth Quarter 2012 Earnings - 2012 Cash Flow
Fourth Quarter 2012 Earnings - 2012 Cash Flow
• In 2012, we generated $12.1 billion of cash flow from continuing operations before
changes in working capital. Working capital changes reduced our full year cash flow
from operations by ~$800 mm to $11.3 billion.
changes in working capital. Working capital changes reduced our full year cash flow
from operations by ~$800 mm to $11.3 billion.
($ in millions)
Cash Flow
From
Operations
before
Working
Capital
changes
From
Operations
before
Working
Capital
changes
$12,100
Beginning
Cash
$3,800
12/31/11
Cash
$3,800
12/31/11
Cash Flow
From
Operations
$11,300
From
Operations
$11,300
$15,100
Beginning
Cash
$3,800
12/31/11
Cash
$3,800
12/31/11
15
16
• Capital expenditures for 2012 were $10.2 billion, of which $2.5
billion was spent in 4Q12.
billion was spent in 4Q12.
– 4Q12 capital spend was ~$100 million lower than 3Q12 driven by an ~12% reduction
in oil and gas spending, partially offset by increases in the chemical and midstream
segments.
in oil and gas spending, partially offset by increases in the chemical and midstream
segments.
– The higher capital at chemicals was related to the construction of a new membrane
chlor-alkali plant in Tennessee, expected to be completed by 4Q13.
chlor-alkali plant in Tennessee, expected to be completed by 4Q13.
– Midstream capital was higher mainly due to the Al Hosn gas project.
• Total year capital expenditures by segment were 80% in oil and
gas, 15% in midstream and the remainder in chemicals.
gas, 15% in midstream and the remainder in chemicals.
• Acquisitions for 2012 were $2.5 billion, of which $1.3 billion was
spent in 4Q12 on domestic oil and gas properties.
spent in 4Q12 on domestic oil and gas properties.
• Financial activities, which included five quarterly dividends
paid, stock buybacks and a $1.74 billion borrowing earlier this
year, resulted in a net use of cash of $850 million.
paid, stock buybacks and a $1.74 billion borrowing earlier this
year, resulted in a net use of cash of $850 million.
• These and other net cash flows resulted in a $1.6 billion cash
balance at 12/31/12.
balance at 12/31/12.
Fourth Quarter 2012 Earnings - 2012 Cash Flow
Fourth Quarter 2012 Earnings - 2012 Cash Flow
16
17
Fourth Quarter 2012 Earnings -
Shares Outstanding, Debt/Capital, ROE & ROCE
Shares Outstanding, Debt/Capital, ROE & ROCE
• During the year, we bought ~7.5 million of our own shares at a cost of
about $580 million. Approximately 5 million of the shares were
purchased in 4Q12 at an average price of $76.15.
about $580 million. Approximately 5 million of the shares were
purchased in 4Q12 at an average price of $76.15.
Shares Outstanding (mm) FY2012 12/31/12
Weighted Average Basic 809.3
Weighted Average Diluted 810.0
Shares Outstanding 805.5
FY2012 12/31/12
Debt/Capital 16%
Return on Equity* 14.6%
Return on Capital Employed* 12.6%
Note: See attached GAAP reconciliation
*Using core results
17
18
Fourth Quarter 2012 Earnings -
Key Performance Metrics - Production
Key Performance Metrics - Production
Fourth Quarter 2012 Earnings -
Key Performance Metrics - Production
Key Performance Metrics - Production
• Occidental’s domestic oil and gas segment produced record
volumes for the ninth consecutive quarter and continued to execute
on our oil production growth strategy.
volumes for the ninth consecutive quarter and continued to execute
on our oil production growth strategy.
• 4Q12 domestic production of 475 mboe/d, consisting of 342 mboe/d
of liquids and 800 mmcf/d of gas, an increase of 6 mboe/d vs. 3Q12.
of liquids and 800 mmcf/d of gas, an increase of 6 mboe/d vs. 3Q12.
• The increase was almost entirely in oil, which grew from 260 mb/d
to 265 mb/d.
to 265 mb/d.
− Gas production declined 12 mmcf/d on a sequential quarterly basis mainly in the
Midcontinent, which reflects the reduction in gas-directed drilling we have
mentioned over the past couple of quarters.
Midcontinent, which reflects the reduction in gas-directed drilling we have
mentioned over the past couple of quarters.
− Higher natural gas liquids volumes, resulting from better yields from our new Elk
Hills gas plant, offset the decline in the gas production.
Hills gas plant, offset the decline in the gas production.
• Total year domestic production grew from 428 mboe/d in 2011 to
465 mboe/d in 2012, or about 9%.
465 mboe/d in 2012, or about 9%.
• Total year domestic oil production grew by 11% from 230 mb/d in
2011 to 255 mb/d in 2012.
2011 to 255 mb/d in 2012.
18
Fourth Quarter 2012 Earnings -
Key Performance Metrics - Production
Key Performance Metrics - Production
Fourth Quarter 2012 Earnings -
Key Performance Metrics - Production
Key Performance Metrics - Production
+33 mboe/d
production
growth
production
growth
Total Company
Total Domestic
Total Domestic Oil
+36 mboe/d
production
growth
production
growth
+25 mb/d
production
growth
production
growth
19
19
20
Fourth Quarter 2012 Earnings - Capital Efficiency &
Operating Cost Reduction Program
Operating Cost Reduction Program
Fourth Quarter 2012 Earnings - Capital Efficiency &
Operating Cost Reduction Program
Operating Cost Reduction Program
• We have embarked on an aggressive plan to improve our
operational efficiencies over all cost categories, including
capital - with a view toward achieving an appreciable reduction
in our operating expenses and drilling costs to at least 2011
levels in order to create higher margins from our production.
operational efficiencies over all cost categories, including
capital - with a view toward achieving an appreciable reduction
in our operating expenses and drilling costs to at least 2011
levels in order to create higher margins from our production.
• With regard to driving efficiencies in our cash operating costs,
we are running well ahead of plan.
we are running well ahead of plan.
– All of our business units stepped up to the challenge of reducing our
costs and involved their personnel at all levels, from business unit
management all the way to field level personnel, to generate ideas to
improve cost efficiency, and our employees responded.
costs and involved their personnel at all levels, from business unit
management all the way to field level personnel, to generate ideas to
improve cost efficiency, and our employees responded.
– The business units generated many good ideas, large numbers of which
were generated by field level personnel. Many of these ideas have already
been implemented, and the results are apparent through reductions
already realized in operating expenses.
were generated by field level personnel. Many of these ideas have already
been implemented, and the results are apparent through reductions
already realized in operating expenses.
20
21
• In 4Q12, total company production costs were $1.04 p/bbl
lower than 3Q12.
lower than 3Q12.
− Improvements were realized across most business units, most notably
in the Permian and Elk Hills.
in the Permian and Elk Hills.
− The reductions resulted from efficiencies achieved across most cost
categories including savings in surface operations, reductions in the
use of outside contractors, curtailment of uneconomic down-hole
maintenance and workover activity as well as related overhead.
categories including savings in surface operations, reductions in the
use of outside contractors, curtailment of uneconomic down-hole
maintenance and workover activity as well as related overhead.
• In 2013, we expect to realize further improvements in all of
these categories.
these categories.
− We expect our production costs to be under $14 p/boe in 2013, which
is significantly lower than the 2012 average costs.
is significantly lower than the 2012 average costs.
− Many of the steps already taken during 4Q12, which are only partially
reflected in the quarter's average costs, along with additional
measures being implemented early in the year, should result in
meaningful additional cost reductions in 2013 and beyond.
reflected in the quarter's average costs, along with additional
measures being implemented early in the year, should result in
meaningful additional cost reductions in 2013 and beyond.
Fourth Quarter 2012 Earnings - Capital Efficiency &
Operating Cost Reduction Program
Operating Cost Reduction Program
Fourth Quarter 2012 Earnings - Capital Efficiency &
Operating Cost Reduction Program
Operating Cost Reduction Program
21
22
• We are seeing strong early results from our efforts
toward improving drilling efficiency and cutting our well
costs through the simplification of our well design,
focusing our activities on fewer geologic play types and
favoring higher return conventional activity.
toward improving drilling efficiency and cutting our well
costs through the simplification of our well design,
focusing our activities on fewer geologic play types and
favoring higher return conventional activity.
• Our goal for 2013 is to reduce our U.S. drilling costs by
15% compared to 2012 and we are approximately halfway
toward that target with further improvements expected
during the next couple of quarters.
15% compared to 2012 and we are approximately halfway
toward that target with further improvements expected
during the next couple of quarters.
Fourth Quarter 2012 Earnings - Capital Efficiency &
Operating Cost Reduction Program
Operating Cost Reduction Program
Fourth Quarter 2012 Earnings - Capital Efficiency &
Operating Cost Reduction Program
Operating Cost Reduction Program
22
23
Fourth Quarter 2012 Earnings - Dividends
Fourth Quarter 2012 Earnings - Dividends
• We have increased our dividends at a compounded annual
rate of 15.8% over the last 10 years through 11 dividend
increases.
rate of 15.8% over the last 10 years through 11 dividend
increases.
• We expect to announce a further dividend increase after
the meeting of the Board of Directors in the second week
of February.
the meeting of the Board of Directors in the second week
of February.
• As a result of our consistent long-term record of growing
our dividend, we are proud to have been selected for
inclusion in Mergent’s Dividend Achievers indices for
2013.
our dividend, we are proud to have been selected for
inclusion in Mergent’s Dividend Achievers indices for
2013.
− This is a highly regarded series of indices that track companies with
strong long-term dividend growth.
strong long-term dividend growth.
23
24
Fourth Quarter 2012 Earnings - Oil & Gas Reserves
Fourth Quarter 2012 Earnings - Oil & Gas Reserves
• Based on our preliminary estimates of our year-end 2012
reserve levels:
reserve levels:
• We produced ~280 mmboe in 2012.
• Our total company reserve replacement ratio from all
categories, including revisions, was about 143%, or
~400 mm boe.
categories, including revisions, was about 143%, or
~400 mm boe.
− Depressed domestic gas prices and changes in our plans for drilling on
gas properties resulted in negative revisions in domestic gas reserves.
gas properties resulted in negative revisions in domestic gas reserves.
− Natural gas reserve revisions represented ~60% of the total revisions.
If gas prices recover in the future, a portion of these reserves will be
reinstated. Additionally, we experienced some negative revisions due
to reservoir performance.
If gas prices recover in the future, a portion of these reserves will be
reinstated. Additionally, we experienced some negative revisions due
to reservoir performance.
24
25
Fourth Quarter 2012 Earnings - Oil & Gas Reserves
Fourth Quarter 2012 Earnings - Oil & Gas Reserves
• Our 2012 development program, excluding acquisitions
and revisions, replaced ~175% of our production with
~490 mmboe of reserve additions.
and revisions, replaced ~175% of our production with
~490 mmboe of reserve additions.
• Our 2012 program, including acquisitions but excluding
revisions of prior year estimates, replaced 209% of our
production.
revisions of prior year estimates, replaced 209% of our
production.
− We believe these latter two approaches are an appropriate way of
evaluating the progress of our overall program.
evaluating the progress of our overall program.
• At year end, we estimate that 72% of our total proved
reserves were liquids. Of the total reserves, ~73% were
proved developed reserves.
reserves were liquids. Of the total reserves, ~73% were
proved developed reserves.
25
26
Fourth Quarter 2012 Earnings -
2013 Production Outlook
2013 Production Outlook
Fourth Quarter 2012 Earnings -
2013 Production Outlook
2013 Production Outlook
• Domestically, we expect oil production for all of 2013 to
grow by about 8% to 10% from the 2012 average.
grow by about 8% to 10% from the 2012 average.
− With lower drilling on gas properties, we expect gas and NGL
production to decline somewhat.
production to decline somewhat.
− Planned plant turnarounds in the Permian CO2 business will cause
additional volatility to production in the first half of the year.
additional volatility to production in the first half of the year.
• Internationally, at current prices we expect production to
be lower in 1Q13 due to a planned turnaround in Qatar.
be lower in 1Q13 due to a planned turnaround in Qatar.
− Production should be relatively flat the rest of the year compared
to 4Q12.
to 4Q12.
26
• Capital for future growth projects:
− The Al Hosn gas project.
− Construction has begun on the
BridgeTex pipeline, which we
expect will start operations in 2014.
BridgeTex pipeline, which we
expect will start operations in 2014.
• Pipeline is designed to deliver
crude oil from West TX to
Houston area refineries, which
will open up additional markets
for our oil from the Permian
region and improve our
margins.
crude oil from West TX to
Houston area refineries, which
will open up additional markets
for our oil from the Permian
region and improve our
margins.
− Gas and CO2 processing plants
and pipelines to expand the
capacity of these facilities to
handle future production growth
and pipelines to expand the
capacity of these facilities to
handle future production growth
− A new chlor-alkali plant in the
chemical business.
chemical business.
27
Fourth Quarter 2012 Earnings -
Fourth Quarter 2012 Earnings -
2013 Capital Outlook
2013 Capital Outlook
• We are currently in an investing phase
in many of our businesses where a
higher than normal portion of our
capital is spent on longer-term projects.
in many of our businesses where a
higher than normal portion of our
capital is spent on longer-term projects.
• In 2013, we expect to spend ~25% of our
total capital expenditures on projects
that will make a significant contribution
to our earnings and cash flow over the
next several years.
total capital expenditures on projects
that will make a significant contribution
to our earnings and cash flow over the
next several years.
27
Fourth Quarter Earnings - Capital Spending
2012 Actual & 2013 Estimate
2012 Actual & 2013 Estimate
• Capital spending is expected to decline by ~6% in 2013 to
$9.6 billion from the $10.2 billion we spent in 2012.
$9.6 billion from the $10.2 billion we spent in 2012.
28
28
• Our overall capital spending is expected to decline by ~6%
in 2013 to $9.6 billion from the $10.2 billion we spent in 2012.
in 2013 to $9.6 billion from the $10.2 billion we spent in 2012.
• The reduction in capital will come entirely from the oil and
gas business where the 4Q12 spend rate was already close
to the level planned for all of 2013.
gas business where the 4Q12 spend rate was already close
to the level planned for all of 2013.
– Almost all of the reductions will be made in domestic operations.
– Midstream capital spending will increase mainly for the BridgeTex
pipeline.
pipeline.
• The 2013 program breakdown is expected to be about 75% in
Oil and Gas, 11% in the Al Hosn gas project, 9% in the
domestic Midstream and the remainder in Chemical.
Oil and Gas, 11% in the Al Hosn gas project, 9% in the
domestic Midstream and the remainder in Chemical.
Fourth Quarter 2012 Earnings -
Fourth Quarter 2012 Earnings -
2013 Capital Outlook
2013 Capital Outlook
29
29
64
Fourth Quarter 2012 Earnings -
2013 Capital Outlook - Domestic Oil & Gas
55
• In domestic oil and gas,
development capital will be
about 46% of our total capital
program.
development capital will be
about 46% of our total capital
program.
– We expect our average operated rig
count in the United States to be about
55 rigs during 2013 compared to 64
rigs in 2012.
count in the United States to be about
55 rigs during 2013 compared to 64
rigs in 2012.
– We have eliminated our less
productive rigs to improve our returns.
productive rigs to improve our returns.
• Our total domestic oil and gas
capital is expected to decrease
~$900 million compared to 2012.
capital is expected to decrease
~$900 million compared to 2012.
30
30
• Permian capital should remain flat.
• We expect to reduce California capital about $500 million
from 2012, which represents ongoing well cost reductions
and efficiencies, a modest shift toward more conventional
drilling opportunities and the constraints of the current
environment.
from 2012, which represents ongoing well cost reductions
and efficiencies, a modest shift toward more conventional
drilling opportunities and the constraints of the current
environment.
• To improve the efficiency of our capital spending in
California, we have planned our 2013 program level based
on what we know we can execute with our existing and
conservatively anticipated permits.
California, we have planned our 2013 program level based
on what we know we can execute with our existing and
conservatively anticipated permits.
• We may revise our program during the course of the year
if we can gain more certainty about the environment.
if we can gain more certainty about the environment.
31
Fourth Quarter 2012 Earnings -
2013 Capital Outlook - Domestic Oil & Gas
31
• In the Midcontinent, we expect to reduce spending about
$400 million from 2012.
$400 million from 2012.
• We have reduced our activity in higher cost unconventional
oil plays, specifically in the Williston and in lower return gas
properties, mainly in the Midcontinent and Rockies.
oil plays, specifically in the Williston and in lower return gas
properties, mainly in the Midcontinent and Rockies.
• The modest decline in rig levels, combined with well cost
reductions, will lead to a decline in overall U.S. oil and gas
capital spending compared with 2012.
reductions, will lead to a decline in overall U.S. oil and gas
capital spending compared with 2012.
• However, as a result of planned efficiencies we expect to
drill a similar number of wells as we did in 2012.
drill a similar number of wells as we did in 2012.
• Compared to the 2012 split, we will spend a higher percentage
of our 2013 capital on oil projects, and as a result we expect
our U.S. oil production to continue to grow this year.
of our 2013 capital on oil projects, and as a result we expect
our U.S. oil production to continue to grow this year.
32
Fourth Quarter 2012 Earnings -
2013 Capital Outlook - Domestic Oil & Gas
32
• Our total Al Hosn gas project capital will decline modestly
from the 2012 levels, and will make up about 11% of our
total capital program for the year.
from the 2012 levels, and will make up about 11% of our
total capital program for the year.
• While Iraq’s spending levels continue to be difficult to predict
reliably, capital in the rest of the Middle East region is
expected to be comparable to the 2012 levels.
reliably, capital in the rest of the Middle East region is
expected to be comparable to the 2012 levels.
• Exploration capital should decrease about 15% from the 2012
spending levels and represent about 5% of the total capital
program.
spending levels and represent about 5% of the total capital
program.
– The focus of the program domestically will be in the Permian basin and California, with
additional international drilling in Oman.
additional international drilling in Oman.
33
Fourth Quarter 2012 Earnings -
2013 Capital Outlook - International & Exploration
33
• The U.S. Midstream capital will increase by about $400 million
due to the BridgeTex pipeline project.
due to the BridgeTex pipeline project.
• Chemical segment capital will be about $425 million, which
includes the construction of a new 182,500 ton per year
membrane chlor-alkali plant in New Johnsonville, Tennessee
that we expect will start operating in 4Q13.
includes the construction of a new 182,500 ton per year
membrane chlor-alkali plant in New Johnsonville, Tennessee
that we expect will start operating in 4Q13.
34
Fourth Quarter 2012 Earnings -
2013 Capital Outlook - Chemical & Midstream
34
35
Fourth Quarter 2012 Earnings - Summary
Fourth Quarter 2012 Earnings - Summary
• Assuming similar realized oil and gas prices to 2012 and our
expectation of comparable chemical and midstream segment
earnings, we expect that our 2013 program will:
expectation of comparable chemical and midstream segment
earnings, we expect that our 2013 program will:
− Generate cash flow from operations of about $12.7 billion; and
− Invest about $9.6 billion in capital spending.
• In 2012, we returned $2.3 billion in total cash to shareholders,
in the form of dividends and share repurchases, excluding the
4Q12 accelerated payout.
in the form of dividends and share repurchases, excluding the
4Q12 accelerated payout.
• Our dividends (excluding the 4Q12 accelerated payout) were
$1.7 billion.
$1.7 billion.
– We expect this amount to increase in 2013, on an annualized basis, by an
amount comparable to our recent dividend growth rate.
amount comparable to our recent dividend growth rate.
• We expect that a $5 p/bbl change in our realized oil prices will
change cash flow from operations by about $450 million.
change cash flow from operations by about $450 million.
35
Fourth Quarter 2012 Earnings Conference Call
Q&A
36
EXHIBIT 99.5
Forward-Looking Statements
Portions of this report contain forward-looking statements and involve risks and uncertainties that could materially affect expected results of operations, liquidity, cash flows and business prospects. Factors that could cause results to differ materially include, but are not limited to: global commodity pricing fluctuations; supply and demand considerations for Occidental’s products; general domestic political and regulatory approval conditions; higher-than-expected costs; international political conditions; not successfully completing, or any material delay of, any development of new fields, expansion projects, capital expenditures, efficiency-improvement projects, acquisitions or dispositions; potential failure to achieve expected production from existing and future oil and gas development projects or acquisitions; exploration risks such as drilling unsuccessful wells; any changes in general economic conditions domestically or internationally; the ability to attracted trained engineers; potential liability for remedial actions under existing or future environmental regulations and litigation; potential liability resulting from pending or future litigation; potential disruption or interruption of Occidental’s production or manufacturing or damage to facilities due to accidents, chemical releases, labor unrest, weather, natural disasters, political events or insurgent activity; failure of risk management; changes in law or regulations; or changes in tax rates. Words such as “estimate”, “project”, “predict”, “will”, “would”, “should”, “could”, “may”, “might”, “anticipate”, “plan”, “intend”, “believe”, “expect”, “aim”, “goal”, “target”, “objective”, “likely” or similar expressions that convey the uncertainty of future events or outcomes generally indicate forward-looking statements. 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 or future events or otherwise. Material risks that may affect Occidental’s results of operations and financial position appear in Part I, Item 1A “Risk Factors” of the 2011 Form 10-K.