Occidental Petroleum Announces First Quarter 2001 Results

Earnings Before Special Items Increase 90 Percent Over First Quarter 2000

Los Angeles, California, UNITED STATES


LOS ANGELES, April 18, 2001 (PRIMEZONE) -- Occidental Petroleum Corporation (NYSE:OXY) announced record earnings before special items for the first quarter 2001 of $510 million ($1.38 per share), an increase of more than 90 percent, compared with $264 million ($0.72 per share) for the first quarter 2000.

Net income for the first quarter 2001 was $484 million ($1.31 per share), compared with $271 million ($0.74 per share) for the first quarter 2000. The first quarter 2001 results included special items that are discussed below. Sales increased to $4.5 billion for the first quarter 2001, an increase of over 70 percent, compared with $2.6 billion for the first quarter 2000.

In announcing the results, Dr. Ray R. Irani, chairman and chief executive officer, said, "This year's first quarter results represent the highest quarterly earnings before special items in the history of the company. The increase in oil and gas production of more than 35 percent, from 352,000 barrels of oil equivalent in the first quarter of 2000 to 478,000 barrels in the first quarter this year, was the key factor in our outstanding first quarter performance. In addition, premium pricing for natural gas sales from our Elk Hills operation in California was another important contributor to our results. Premium pricing for California gas compared to gas production from the Gulf of Mexico should not be viewed as a temporary phenomenon because California's current supply - demand imbalance that is driving in-state prices is expected to continue for the next two to three years. Partially offsetting the positive factors in the first quarter were the reduced chemical results due to a decline in product demand and higher energy and feedstock costs."

Oil and Gas

The oil and gas segment earned $946 million for the first quarter 2001, compared with $394 million for the same period of 2000. The improvement is primarily the result of higher domestic natural gas prices and higher domestic oil production volumes, partially offset by lower worldwide crude oil price realizations and higher exploration expense. The California gas market price premium, which began to increase in the fall of 2000 and continued through the first quarter 2001, resulted in a significantly higher realized price for domestic natural gas. Oil production was also higher in the first quarter this year compared to last year due primarily to the Altura and THUMS acquisitions which occurred in the second quarter 2000.

Chemicals

The chemicals segment reported a net loss before special items of $53 million for the first quarter 2001, compared with income of $143 million for the first quarter 2000. The decline in results before special items reflects higher energy and feedstock costs; lower sales prices and volumes for PVC, VCM, EDC and chlorine; and lower results from equity investments.

Chemical results after special items were a loss of $79 million for the first quarter 2001. The 2001 first quarter included $26 million pre-tax expense for employee severance, plant write-down costs and plant shut-down costs.

Other

Special items reduced earnings by $26 million after tax, or 7 cents per share. The special items included charges for severance and plant write-downs in the chemicals segment totaling $26 million and an increase in environmental reserves. These two items were largely offset by the settlement of a long-standing tax issue and an insurance dividend. An additional after-tax charge of $24 million for a change in accounting standards for derivatives also was recorded.

Forward-looking statements and estimates regarding exploration and production activities, oil, gas and commodity chemical prices and their related earnings effects, and cost reductions in this release are based on assumptions concerning market, competitive, regulatory, environmental, operational and other conditions. Actual results could differ materially as a result of factors discussed in Occidental's Annual Report on Form 10-K.

SUMMARY OF SEGMENT NET SALES AND EARNINGS
 (Millions, except per-share amounts)
 
                                                         First Quarter
 Periods ended March 31                                  2001     2000
 --------------------------------------------         -------  -------
 --------------------------------------------         -------  -------
 
 SEGMENT NET SALES
    Oil and gas                                       $ 3,612  $ 1,534
    Chemical                                              863    1,040
                                                      -------  -------
    Net sales                                         $ 4,475  $ 2,574
 --------------------------------------------         -------  -------
 --------------------------------------------         -------  -------
 
 SEGMENT EARNINGS (LOSS)
    Oil and gas                                       $   946  $   394
    Chemical                                              (79)     143
                                                      -------  -------
                                                          867      537
 Unallocated Corporate Items
     Interest expense, net (a)                           (76)     (99)
    Income taxes (b)                                    (175)    (150)
    Trust preferred distributions
      & other                                            (16)     (17)
    Other (c)                                            (89)       -
                                                      -------  -------
 Income before extraordinary items and effect
    of changes in accounting principles                   511      271
    Extraordinary loss, net (d)                            (3)       -
    Cumulative effect of changes in accounting
       principles, net (e)                                (24)       -
                                                      -------  -------
 Net Income                                               484      271
 Effect of repurchase of Trust
    Preferred Securities                                    -        1
                                                      -------  -------
 
 EARNINGS APPLICABLE TO COMMON
    STOCK                                             $   484  $   272
                                                      -------  -------
                                                      -------  -------
 
 BASIC EARNINGS PER COMMON SHARE
    Income before extraordinary items and
      effect of changes in accounting principles      $  1.38  $   .74
    Extraordinary loss, net (d)                          (.01)       -
    Cumulative effect of changes
      in accounting principles, net (e)                  (.06)       -
                                                      -------  -------
                                                      $  1.31  $   .74
                                                      -------  -------
                                                      -------  -------
 DILUTED EARNINGS PER COMMON SHARE
    Income before extraordinary items and
      effect of changes in accounting principles      $  1.37  $   .74
    Extraordinary loss, net (d)                          (.01)       -
    Cumulative effect of changes
      in accounting principles, net (e)                  (.06)       -
                                                      -------  -------
                                                      $  1.30  $   .74
                                                      -------  -------
                                                      -------  -------
 
 AVERAGE BASIC COMMON SHARES
    OUTSTANDING                                         370.2    368.1
 --------------------------------------------         -------  -------
 --------------------------------------------         -------  -------
 
 See footnotes on following page.

The first quarter 2001 includes $33 million interest income on notes receivable from Occidental Permian partners.

Includes an offset for credits in lieu of U.S. federal income taxes allocated to the divisions. Divisional earnings have benefited from credits allocated by $1 million and $4 million at oil and gas and chemical, respectively, in the first quarters of 2001 and 2000.

The first quarter 2001 includes $34 million for preferred distributions to the Occidental Permian partners. This is essentially offset by the interest income discussed in (a) above.

During the first quarter 2001, Occidental placed into an escrow account, with a third party, sufficient funds to retire the outstanding $20.5 million Calcasieu pollution control revenue bonds due 2005. As a result of the defeasance, Occidental recognized an after-tax loss of $3 million.

Effective January 1, 2001, Occidental implemented SFAS No. 133 - "Accounting for Derivative Instruments and Hedging," as amended by SFAS No. 137 - "Accounting for Derivative Instruments and Hedging Activities-Deferral of the Effective Date of FASB Statement No. 133," and SFAS No. 138 - "Accounting for Certain Derivative Instruments and Certain Hedging Activities." Adoption of these new accounting standards resulted in a cumulative after-tax reduction in net income of $24 million and other comprehensive income of approximately $27 million.

SUMMARY OF OPERATING STATISTICS
 
                                                         First Quarter
 Periods ended March 31                                  2001     2000
 --------------------------------------------         -------  -------
 --------------------------------------------         -------  -------
 
 NET OIL, GAS AND LIQUIDS
    PRODUCTION PER DAY
 
 United States
   Liquids (MBBL)
     California                                            73       50
     Permian                                              134       13
     US Other                                               -        7
                                                      -------  -------
       Total                                              207       70
 
   Natural Gas (MMCF)
      California                                          317      305
      Hugoton                                             167      164
      Permian                                             148       51
      US Other                                              -      110
                                                      -------  -------
        Total                                             632      630
 
 Latin America
   Crude oil & condensate (MBBL)
     Colombia                                              21       36
     Ecuador                                               13       16
                                                      -------  -------
       Total                                               34       52
 
 Eastern Hemisphere
   Crude oil and condensate (MBBL)
     Oman                                                  11        9
     Pakistan                                               6        4
     Qatar                                                 42       42
     Russia                                                28       26
     Yemen                                                 36       36
                                                      -------  -------
       Total                                              123      117
 
   Natural Gas (MMCF)
     Pakistan                                              50       50
 
 Barrels of Oil Equivalent (MBOE)                         478      352
 
 
 CAPITAL EXPENDITURES (millions)                      $   238  $   122
 
                                                      -------  -------
                                                      -------  -------
 
 DEPRECIATION, DEPLETION AND
  AMORTIZATION OF ASSETS (millions)                   $   245  $   185
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CONTACT:  Occidental Petroleum Corporation, Los Angeles
          Lawrence P. Meriage (media)
          310-443-6562
 
          Kenneth J. Huffman (investors), New York
          212-603-8183
          On the web: www.oxy.com