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Occidental Petroleum Announces Record First Quarter Net IncomeLOS ANGELES, April 24, 2008 -- Occidental Petroleum Corporation (NYSE:OXY) announced net income of $1.846 billion ($2.23 per diluted share) for the first quarter of 2008, compared with $1.212 billion ($1.43 per diluted share) for the first quarter of 2007. Core results for the first quarter of 2008 were $1.819 billion ($2.20 per diluted share), compared with $788 million ($0.93 per diluted share) for the first quarter of 2007. In announcing the results, Dr. Ray R. Irani, Chairman and Chief Executive Officer, said, "Our net income for the first quarter of 2008 set a new company record, driven by an 8.4-percent increase in production over last year's first quarter, as well as improved oil and gas prices. These results continue our momentum from 2007, the most successful year in Oxy's history, and provide a strong start to propel us into the remainder of 2008." Oil and Gas Oil and gas segment earnings were $2.888 billion for the first quarter of 2008, compared with $1.883 billion for the same period in 2007. Oil and gas core results for the first quarter of 2007 were $1.362 billion, after excluding a $412 million gain from the sale of Occidental's Russian joint venture and $109 million gain from the resolution of certain legal disputes. The $1.5 billion increase in the first quarter 2008 core results reflected $1.6 billion of increases from record crude oil and higher natural gas prices, production from the Dolphin project coming on line in the second half of 2007, partially offset by increased DD&A rates and higher operating expenses. For the first quarter of 2008, daily oil and gas production averaged 607,000 barrels of oil equivalent (BOE), compared with 560,000 BOE per day produced in the first quarter of 2007. The bulk of the production increase was the result of 55,000 BOE per day from the Dolphin project, which began production in the third quarter of 2007, partially offset by lower volumes from our production sharing contracts due to higher prices. Oxy's realized price for worldwide crude oil was $86.75 per barrel for the first quarter of 2008, compared with $51.67 per barrel for the first quarter of 2007. Domestic realized gas prices increased from $6.38 per MCF in the first quarter of 2007 to $8.15 per MCF for the first quarter of 2008. Chemicals Chemical segment earnings for the first quarter of 2008 were $179 million, compared with $137 million for the same period in 2007. The first quarter of 2008 results reflect higher margins for caustic soda. Midstream, Marketing and Other Occidental's midstream, marketing and other segment gathers, processes, transports, stores, and markets crude oil, natural gas, natural gas liquids and CO2. The transportation and storage systems primarily serve operations from New Mexico across the Permian Basin to Cushing, Oklahoma. Occidental's 24.5-percent equity interest in the Dolphin pipeline project is also included in this segment. Additionally, this segment also generates electricity at facilities in Texas, Louisiana and California. Midstream segment preliminary earnings were approximately $123 million for the first quarter of 2008, compared with approximately $119 million for the first quarter of 2007. Prior period oil and gas segment earnings have been revised to remove these midstream results. About Oxy Occidental Petroleum Corporation is an international oil and gas exploration and production company with operations in the United States, Middle East/North Africa and Latin America regions. Oxy is the fourth largest U.S. oil and gas company, based on equity market capitalization. Oxy's wholly owned subsidiary, OxyChem, manufactures and markets chlor-alkali products and vinyls. Occidental is committed to safeguarding the environment, protecting the safety and health of employees and neighboring communities and upholding high standards of social responsibility in all of the company's worldwide operations. For further analysis of Occidental's quarterly performance, please visit the web site: www.oxy.com Forward-Looking Statements Statements in this release that contain words such as "will," "expect" or "estimate," or otherwise relate to the future, are forward-looking and involve risks and uncertainties that could significantly affect expected results. Factors that could cause results to differ materially include, but are not limited to: exploration risks, such as drilling of unsuccessful wells; global commodity pricing fluctuations and supply/demand considerations for oil, gas and chemicals; higher-than-expected costs; political risk; operational interruptions; changes in tax rates and not successfully completing (or any material delay in) any expansion, capital expenditure, acquisition, or disposition. You should not place undue reliance on these forward-looking statements which speak only as of the date of this release. Unless legally required, Occidental does not undertake any obligation to update any forward-looking statements as a result of new information, future events or otherwise. U.S. investors are urged to consider carefully the disclosure in our Form 10-K, available through the following toll-free telephone number, 1-888-OXYPETE (1-888-699-7383) or on the Internet at http://www.oxy.com. You also can obtain a copy from the SEC by calling 1-800-SEC-0330.
SUMMARY OF SEGMENT NET SALES AND EARNINGS
First Quarter
----------------
(In millions, except per-share amounts) 2008 2007
========================================== ======= =======
SEGMENT NET SALES
Oil and Gas $ 4,518 $ 2,720
Chemical 1,267 1,060
Midstream, marketing and other 405 358
Eliminations (170) (123)
------- -------
Net sales $ 6,020 $ 4,015
========================================== ======= =======
SEGMENT EARNINGS
Oil and Gas (a) $ 2,888 $ 1,883
Chemical 179 137
Midstream, marketing and other 123 119
------- -------
3,190 2,139
Unallocated Corporate Items
Interest expense, net (b) -- (181)
Income taxes (1,294) (684)
Other (c) (77) (105)
------- -------
Income from Continuing Operations 1,819 1,169
Discontinued operations, net (d) 27 43
------- -------
NET INCOME $ 1,846 $ 1,212
======= =======
BASIC EARNINGS PER COMMON SHARE
Income from continuing operations $ 2.21 $ 1.39
Discontinued operations, net 0.03 0.05
------- -------
$ 2.24 $ 1.44
======= =======
DILUTED EARNINGS PER COMMON SHARE
Income from continuing operations $ 2.20 $ 1.38
Discontinued operations, net 0.03 0.05
------- -------
$ 2.23 $ 1.43
======= =======
AVERAGE BASIC COMMON SHARES OUTSTANDING
BASIC 823.6 841.0
DILUTED 828.2 846.5
========================================== ======= =======
See footnotes on following page.
(a) Oil and Gas -- Prior period oil and gas segment results have
been revised to remove midstream results. The first quarter of
2007 includes after-tax gains of $412 million from the sale of
Occidental's Russian joint venture and $109 million resulting
from the resolution of certain legal disputes.
(b) Interest Expense, net -- The first quarter of 2008 includes $3
million pre-tax interest charges for the defeasance of various
debt issues. The first quarter of 2007 includes $172 million of
pre-tax interest charges for the purchase of various debt issues
in the open market.
(c) Unallocated Corporate Items - Other -- The first quarter of
2007 includes a $47 million pre-tax charge for a plant closure
and related environmental remediation reserve.
(d) Discontinued Operations, net -- In the first quarter of 2008,
Occidental received payment from Ecuador for disputed tax
refunds. In 2007, Occidental completed an exchange of oil and gas
interests in Horn Mountain with BP p.l.c. (BP) for oil and gas
interests in the Permian Basin and a gas processing plant in
Texas. Occidental also sold its oil and gas interests in Pakistan
to BP.
SUMMARY OF CAPITAL EXPENDITURES AND DD&A EXPENSE
First Quarter
----------------
($ millions) 2008 2007
========================================== ======= =======
CAPITAL EXPENDITURES $ 868 $ 780
======= =======
DEPRECIATION, DEPLETION AND
AMORTIZATION OF ASSETS $ 653 $ 574
========================================== ======= =======
SUMMARY OF OPERATING STATISTICS
First Quarter
----------------
2008 2007
========================================== ======= =======
NET OIL, GAS AND LIQUIDS
PRODUCTION PER DAY
United States
Crude Oil and Liquids (MBBL)
California 87 85
Permian 170 165
Hugoton and other 4 4
------- -------
Total 261 254
Natural Gas (MMCF)
California 245 232
Hugoton and other 158 150
Permian 177 198
------- -------
Total 580 580
Latin America
Crude Oil (MBBL)
Argentina 37 33
Colombia 42 42
------- -------
Total 79 75
Natural Gas (MMCF)
Argentina 22 21
Bolivia 21 14
------- -------
Total 43 35
Middle East/North Africa
Crude Oil (MBBL)
Oman 20 22
Dolphin 22 --
Qatar 46 46
Yemen 25 32
Libya 17 26
------- -------
Total 130 126
Natural Gas (MMCF)
Oman 23 26
Dolphin 200 --
------- -------
223 26
Barrels of Oil Equivalent (MBOE)
Subtotal consolidated subsidiaries 611 562
Colombia-minority interest (6) (5)
Yemen-Occidental net interest 2 3
------- -------
Total Worldwide Production (MBOE) 607 560
========================================== ======= =======
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.
First Quarter
----------------------------------
($ millions, except Diluted Diluted
per-share amounts) 2008 EPS 2007 EPS
================================ ======= ======= ======= =======
TOTAL REPORTED EARNINGS $ 1,846 $ 2.23 $ 1,212 $ 1.43
======= ======= ======= =======
Oil and Gas
Segment Earnings $ 2,888 $ 1,883
Less:
Russia joint venture -- 412
Legal settlements** -- 109
------- -------
Segment Core Results 2,888 1,362
------- -------
Chemicals
Segment Earnings 179 137
No significant items affecting
earnings -- --
------- -------
Segment Core Results 179 137
------- -------
Midstream, marketing and other
Segment Earnings 123 119
No significant items affecting
Earnings -- --
------- -------
Segment Core Results 123 119
------- -------
Total Segment Core Results 3,190 1,618
------- -------
Corporate
Corporate Results --
Non Segment* (1,344) (927)
Less:
Debt purchase expense -- (172)
Facility closure -- (47)
Tax effect of pre-tax
adjustments -- 79
Discontinued operations, net** 27 43
------- -------
Corporate Core Results --
Non Segment (1,371) (830)
------- -------
TOTAL CORE RESULTS $ 1,819 $ 2.20 $ 788 $ 0.93
=============================== ======= ======= ======= =======
* Interest expense, income taxes, G&A expense and other, and non-
core items.
** Amounts shown after tax.
CONTACT: Occidental Petroleum Corporation
Richard S. Kline (media)
310-443-6249
richard_kline@oxy.com
Christopher G. Stavros (investors)
212-603-8184
chris_stavros@oxy.com
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