Occidental Petroleum Announces First Quarter Earnings


LOS ANGELES, April 24, 2007 (PRIME NEWSWIRE) -- Occidental Petroleum Corporation (NYSE:OXY) announced net income for the first quarter 2007 was $1.212 billion ($1.43 per diluted share), compared with $1.231 billion ($1.43 per diluted share) for the first quarter 2006. Core results for the first quarter 2007 were $831 million ($0.98 per diluted share), compared with $1.153 billion ($1.34 per diluted share) for the same period in 2006. See the attached schedule for a reconciliation of net income to core results.

Oil and Gas

Oil and gas segment earnings were $2.070 billion for the first quarter 2007, compared with $1.910 billion for the same period in 2006. Oil and gas earnings were $1.549 billion for the first quarter 2007, after excluding gains from the sale of Oxy's investment in the Russian Vanyoganneft joint venture and litigation settlements, compared with $1.910 billion for the first quarter 2006. See the attached schedule for a reconciliation of segment earnings to core results. The decline in the first quarter 2007 reflected $233 million of decreases from lower crude oil and natural gas prices, increased DD&A rates and higher operating expenses, partially offset by higher crude oil production.

The average price for West Texas Intermediate crude oil in the first quarter 2007 was $58.24 per barrel compared to $63.48 per barrel in the first quarter 2006. Oxy's realized price for worldwide crude oil was $51.78 per barrel for the first quarter 2007, compared with $55.38 per barrel for the first quarter 2006. The average price for NYMEX gas in the first quarter 2007 was $7.17 per MCF, compared with $11.42 per MCF in the first quarter 2006. Domestic realized gas prices decreased from $8.36 per MCF in the first quarter 2006 to $6.38 per MCF for the first quarter 2007.

Production

For the first quarter 2007, daily oil and gas production from continuing operations averaged 587,000 barrels of oil equivalent (BOE), a 24,000 BOE increase over the 563,000 equivalent barrels per day produced in the first quarter 2006. The improvement was a result of the Vintage and Plains acquisitions and higher Middle East production in the first quarter, partially offset by an incident at Elk Hills involving the natural gas gathering lines. The Elk Hills incident negatively impacted Oxy's net production for the quarter by 14,000 barrels per day.

Chemicals

Chemical first quarter 2007 segment earnings were $137 million, compared with first quarter 2006 segment earnings of $250 million. The first quarter 2007 results reflect lower margins for caustic soda and polyvinyl chloride.

Items Affecting Net Income

The first quarter 2007 core results of $831 million excludes, net of tax: a $109 million gain for litigation settlements, a $412 million gain resulting from the sale of Oxy's 50-percent investment in the Russian Vanyoganneft joint venture, a $110 million charge for the completion of a cash tender offer for various debt issues, and a $30 million provision for a plant closure and related environmental remediation reserve.

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.

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; 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.

For further analysis of Occidental's quarterly performance, please visit the web site: www.oxy.com


 SUMMARY OF SEGMENT NET SALES AND EARNINGS

                                                First Quarter
                                             ----------------
 (In millions, except per-share amounts)        2007     2006
 ==========================================  =======  =======
 SEGMENT NET SALES
  Oil and Gas                                $ 3,009  $ 3,125
  Chemical                                     1,060    1,241
  Other                                           39       30
                                             -------  -------
  Net sales                                  $ 4,108  $ 4,396
 ==========================================  =======  =======
 SEGMENT EARNINGS
  Oil and Gas (a)                            $ 2,070  $ 1,910
  Chemical                                       137      250
                                             -------  -------
                                               2,207    2,160
 Unallocated Corporate Items
  Interest expense, net (b)                     (181)     (29)
  Income taxes                                  (703)    (907)
  Other (c)                                     (111)     (71)
                                             -------  -------

 Income from Continuing Operations             1,212    1,153
  Discontinued operations, net                    --       78
                                             -------  -------
 NET INCOME                                  $ 1,212  $ 1,231
                                             =======  =======
 BASIC EARNINGS PER COMMON SHARE
  Income from continuing operations          $  1.44  $  1.36
  Discontinued operations, net                    --     0.09
                                             -------  -------
                                             $  1.44  $  1.45
                                             =======  =======
 DILUTED EARNINGS PER COMMON SHARE
  Income from continuing operations          $  1.43  $  1.34
  Discontinued operations, net                    --     0.09
                                             -------  -------
                                             $  1.43  $  1.43
                                             =======  =======
 AVERAGE BASIC COMMON SHARES OUTSTANDING
  BASIC                                        841.0    848.5
  DILUTED                                      846.5    860.9
 ==========================================  =======  =======


 (a) In January 2007, Occidental sold its 50-percent interest in the
     Russian Vanyoganneft joint venture to TNK-BP for approximately
     $485 million and recorded an after-tax gain of $412 million.
     Also in the first quarter 2007, Occidental resolved certain legal
     disputes that resulted in an after-tax gain of $109 million.
 (b) The first quarter 2007 includes a $172 million pre-tax interest
     charge for the cash tender offer of $659 million principal of
     various debt issues.
 (c) The first quarter 2007 includes a $47 million pre-tax charge for
     a plant closure and related environmental remediation reserve.

 SUMMARY OF CAPITAL EXPENDITURES AND DD&A EXPENSE

                                                First Quarter
                                             ----------------
 ($ millions)                                   2007     2006
 ==========================================  =======  =======
 CAPITAL EXPENDITURES                        $   784  $   596
                                             =======  =======
 DEPRECIATION, DEPLETION AND
   AMORTIZATION OF ASSETS                    $   588  $   463
 ==========================================  =======  =======



 SUMMARY OF OPERATING STATISTICS
                                                First Quarter
                                             ----------------
                                                2007     2006
 ==========================================  =======  =======
 NET OIL, GAS AND LIQUIDS
   PRODUCTION PER DAY
 United States
  Crude Oil and Liquids (MBBL)
    California                                    85       82
    Permian                                      165      166
    Horn Mountain                                 10       15
    Hugoton and other                              4        3
                                             -------  -------
      Total                                      264      266
  Natural Gas (MMCF)
    California                                   232      250
    Hugoton and other                            150      133
    Permian                                      198      189
    Horn Mountain                                  5       10
                                             -------  -------
      Total                                      585      582
 Latin America
  Crude Oil (MBBL)
    Argentina                                     33       24
    Colombia                                      42       39
                                             -------  -------
      Total                                       75       63
 Natural Gas (MMCF)
    Argentina                                     21       13
    Bolivia                                       14       13
                                             -------  -------
      Total                                       35       26
 Middle East/North Africa
  Crude Oil (MBBL)
    Oman                                          22       17
    Qatar                                         46       44
    Yemen                                         32       32
    Libya                                         26       22
                                             -------  -------
      Total                                      126      115
  Natural Gas (MMCF)
    Oman                                          26       25
 Other Eastern Hemisphere
  Crude Oil (MBBL)
    Pakistan                                       4        4
  Natural Gas (MMCF)
    Pakistan                                      73       75
 Barrels of Oil Equivalent (MBOE)
  Subtotal consolidated subsidiaries             589      566
    Colombia-minority interest                    (5)      (5)
    Yemen-Occidental net interest                  3        2
                                             -------  -------
 Total Worldwide Production (MBOE)(a)            587      563
 ==========================================  =======  =======
 (a) Occidental sold its interest in the Russian Vanyoganneft joint
     venture in January 2007.  Russian production has been excluded
     from both periods for comparability.

 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)                  2007      EPS     2006      EPS
 ================================  =======  =======  =======  =======
 TOTAL REPORTED EARNINGS           $ 1,212  $  1.43  $ 1,231  $  1.43
                                   =======  =======  =======  =======
 Oil and Gas
  Segment Earnings                 $ 2,070           $ 1,910
  Less:
    Russia-Vanyoganneft sale**         412                --
    Legal settlements**                109                --
                                   -------           -------
  Segment Core Results               1,549             1,910
                                   -------           -------
 Chemicals
  Segment Earnings                     137               250
  No significant items affecting
    earnings                            --                --
                                   -------           -------
  Segment Core Results                 137               250
                                   -------           -------
 Total Segment Core Results          1,686             2,160
                                   -------           -------
 Corporate
  Corporate Results --
    Non Segment*                      (995)             (929)
  Less:
    Debt purchase expense             (172)               --
    Facility closure                   (47)               --
    Tax effect of pre-tax
      adjustments                       79                --
    Discontinued operations, net**      --                78
                                   -------           -------
  Corporate Core Results --
    Non Segment                       (855)           (1,007)
                                   -------           -------
 TOTAL CORE RESULTS                $   831  $  0.98  $ 1,153  $  1.34
 ===============================   =======  =======  =======  =======
  *Interest expense, income taxes, G&A expense and other, and non-
   core items.
 **Amounts shown after tax.


            

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