LOS ANGELES, Jan. 29, 2008 (PRIME NEWSWIRE) -- Occidental Petroleum Corporation (NYSE:OXY) announced today that in 2007 the company's consolidated subsidiaries had preliminary proved reserve additions from all sources of 242 million barrels of oil equivalent (BOE) compared to production of 209 million BOE, for a production replacement rate of 116 percent. Occidental incurred $4.45 billion in costs for oil and gas property acquisitions and exploration and development activities. At the end of 2007, Occidental's consolidated reserves-to-production ratio, assuming production remained at the 2007 level, was 13.7 years.
At year-end 2007, Occidental's worldwide proved reserves, on a consolidated basis, totaled 2.87 billion BOE compared to 2.83 billion BOE at the end of 2006.
The 2007 consolidated proved reserve additions totaled 242 million BOE. Improved recovery provided 104 percent of total additions, acquisitions 25 percent, extensions and discoveries 10 percent, which were partially offset by reductions in previous estimates of the total proved reserve additions.
Over 90 percent of the net additions were in the United States, with the most substantial increases in the Permian Basin, Elk Hills field and the Rocky Mountains. In the Permian Basin, the increased reserves were attributable to higher prices and enhanced recovery techniques, such as drilling and water flood wells, additional CO2 flood development programs and bolt-on acquisitions. The Elk Hills operations employ infill drilling and both gas flood and water flood techniques which contributed to their increased reserves.
In 2007, Occidental increased proved developed reserves to 80 percent of total proved reserves from 78 percent at year-end 2006. The Dolphin project transferred 101 million BOE to the proved developed category during 2007, with no remaining undeveloped reserves at December 31, 2007 for this project. In the United States, the Elk Hills field and the Permian Basin transferred 21 million BOE each into proved developed reserves from undeveloped.
For the three-year period 2005-2007, Occidental's consolidated proved reserve additions totaled 1.125 billion BOE, and total production equaled 580 million BOE, for a reserve replacement rate of 194 percent. Over the past three years, Occidental incurred $17.63 billion in costs for property acquisitions and exploration and development activities. Disclosures in this press release are for continuing operations as of December 31, 2007; accordingly, Pakistan and Horn Mountain reserves and costs have been excluded.
Occidental sold its 33 million BOE share of a Russian joint venture in January 2007. After this sale, only the minority shareholder's interest in a Colombian affiliate and an equity investment in Yemen remain classified in other interests.
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; 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.
OIL AND GAS PRELIMINARY RESERVES
The following table sets forth Occidental's net interests in
quantities of proved developed and undeveloped reserves of crude
oil, condensate and natural gas, and changes in such quantities.
Crude oil reserves (in millions of barrels) include condensate.
Natural gas volumes (in billion cubic feet) have been converted to
barrels of oil equivalent (BOE) based on energy content of 6,000
cubic feet of gas to one barrel of oil.
Consolidated Other
Subsidiaries Interests
----------------- -----------------
(million BOE) Oil Gas BOE Oil Gas BOE
=============================== ===== ===== ===== ===== ===== =====
PROVED DEVELOPED AND UNDEVELOPED
RESERVES
Balance at December 31, 2004 1,858 2,851 2,334 43 -- 43
Revisions of previous estimates (18) 21 (15) 8 6 9
Improved recovery 107 129 129 -- -- --
Extensions and discoveries 46 427 117 1 -- 1
Purchases of proved reserves 112 164 139 -- -- --
Sales of proved reserves (8) (3) (9) -- -- --
Production (135) (215) (171) (7) (6) (8)
------------------------------- ----- ----- ----- ----- ----- -----
Balance at December 31, 2005 1,962 3,374 2,524 45 -- 45
Revisions of previous estimates 21 (31) 16 (7) 8 (6)
Improved recovery 116 127 137 (1) -- (1)
Extensions and discoveries 24 58 34 -- -- --
Purchases of proved reserves 254 435 326 -- -- --
Sales of proved reserves (4) (2) (4) -- -- --
Production (160) (237) (200) (7) (8) (8)
------------------------------- ----- ----- ----- ----- ----- -----
Balance at December 31, 2006 2,213 3,724 2,833 30 -- 30
Revisions of previous estimates (80) (90) (95) -- -- --
Improved recovery 183 417 253 1 -- 1
Extensions and discoveries 18 35 24 (1) -- (1)
Purchases of proved reserves 57 18 60 -- -- --
Sales of proved reserves -- -- -- (33) -- (33)
Production (165) (261) (209) 1 -- 1
------------------------------- ----- ----- ----- ----- ----- -----
Balance at December 31, 2007 2,226 3,843 2,866 (2) -- (2)
=============================== ===== ===== ===== ===== ===== =====
PROVED DEVELOPED RESERVES (a)
December 31, 2004 1,511 1,728 1,799 37 -- 37
=============================== ===== ===== ===== ===== ===== =====
December 31, 2005 1,537 1,906 1,855 37 -- 37
=============================== ===== ===== ===== ===== ===== =====
December 31, 2006 1,771 2,637 2,211 23 -- 23
=============================== ===== ===== ===== ===== ===== =====
December 31, 2007 1,788 3,069 2,300 (2) -- (2)
=============================== ===== ===== ===== ===== ===== =====
(a) Approximately three percent of the proved developed oil
reserves and approximately 14 percent of the proved developed gas
reserves at December 31, 2007 are non-producing. Occidental's
plans are to begin producing these reserves in 2008.
PRELIMINARY COSTS INCURRED
Occidental's 2007, 2006 and 2005 costs incurred in oil and gas
property acquisition, exploration and development activities, whether
capitalized or expensed, were as follows:
Consolidated Other
(in millions) Subsidiaries Interests (b)
=============================== ================= =================
FOR THE YEAR ENDED
DECEMBER 31, 2007
Property Acquisition Costs
Proved Properties $ 1,016 $ --
Unproved Properties 119 --
Exploration Costs 331 (4)
Development Costs 2,987 7
------- -------
Costs Incurred $ 4,453 $ 3
================================ ======= =======
FOR THE YEAR ENDED
DECEMBER 31, 2006
Property Acquisition Costs (a)
Proved Properties $ 4,899 $ --
Unproved Properties 1,142 --
Exploration Costs 313 1
Development Costs 2,518 32
------- -------
Costs Incurred $ 8,872 $ 33
================================ ======= =======
FOR THE YEAR ENDED
DECEMBER 31, 2005
Property Acquisition Costs
Proved Properties $ 1,782 $ --
Unproved Properties 398 --
Exploration Costs 232 (2)
Development Costs 1,890 15
------- -------
Costs Incurred $ 4,302 $ 13
================================ ======= =======
(a) Includes acquisition costs and related step-up for deferred
income taxes of $1.34 billion for the purchase of Vintage
Petroleum Inc. There was no goodwill recorded for this
acquisition.
(b) Includes equity investees' costs in Russia (sold in 2007) and
Yemen, partially offset by minority interests in a Colombian
affiliate.
PRELIMINARY 5-YEAR DATA
CONSOLIDATED SUBSIDIARIES
Reserve Costs
Additions Production Incurred
(Million BOE) (Million BOE) ($ Millions)
========= ============= ============= ============
2003 336 166 1,501
2004 241 166 1,700
2005 370 171 4,302
2006 513 200 8,872*
2007 242 209 4,453
3-Year
Average 375 193 5,876
5-Year
Average 340 182 4,166
Reserves Replacement
(Million BOE)
Improved Extensions
Revisions Recovery Discoveries Acquisitions Total
========= ========= ========== =========== ============ =====
2003 5 96 128 107 336
2004 50 110 41 40 241
2005 (15) 129 117 139 370
2006 16 137 34 326 513
2007 (95) 253 24 60 242
3-Year
Average (31) 173 58 175 375
5-Year
Average (8) 145 69 134 340
Costs Incurred
($ Millions)
Exploration Development
Acquisitions Costs Costs Total
========= ============ ============ ============ =====
2003 368 80 1,053 1,501
2004 166 132 1,402 1,700
2005 2,180 232 1,890 4,302
2006 6,041 313 2,518 8,872*
2007 1,135 331 2,987 4,453
3-Year
Average 3,119 292 2,465 5,876
5-Year
Average 1,978 218 1,970 4,166
* Includes acquisition costs and related step-up for deferred
income taxes of $1.34 billion for the purchase of Vintage
Petroleum Inc. There was no goodwill recorded for this
acquisition.