LOS ANGELES, April 23, 2009 (GLOBE NEWSWIRE) -- Occidental Petroleum Corporation (NYSE:OXY) announced that its net income for the first quarter of 2009 was $368 million ($0.45 per diluted share). Results for the quarter were impacted by certain non-core charges. Core results for the first quarter of 2009 were $407 million ($0.50 per diluted share).
In announcing the results, Dr. Ray R. Irani, Chairman and Chief Executive Officer, said, "In the first quarter, Occidental achieved a nearly eight percent growth in year-over-year oil and gas production. In addition, we have made significant progress in our continuing cost reduction efforts and we will continue to invest in the long-term growth of the Company. I am pleased with our effectiveness in adjusting to the ongoing volatile market conditions."
Oil and Gas
Oil and gas segment earnings were $545 million for the first quarter of 2009. After excluding rig termination costs of $8 million, the first quarter 2009 core results were $553 million, compared with $2.9 billion for the same period in 2008. The $2.3 billion decrease in the first quarter 2009 results reflected lower crude oil and natural gas prices and higher DD&A rates.
For the first quarter of 2009, daily oil and gas sales volumes averaged 654,000 barrels of oil equivalent (BOE), compared with 607,000 BOE per day in the first quarter of 2008. Volume increases were 22,000 BOE per day in domestic operations, largely in the Rockies and California, 15,000 BOE per day in Oman, and 10,000 BOE per day in Argentina.
Oxy's realized price for worldwide crude oil was $39.29 per barrel for the first quarter of 2009, compared with $86.75 per barrel for the first quarter of 2008. Domestic realized gas prices decreased from $8.15 per thousand cubic feet (MCF) in the first quarter of 2008 to $3.54 per MCF for the first quarter of 2009.
Oil and gas cash production costs, including taxes - other than on income, declined from $14.75 per BOE for the total year 2008 to $12.19 per BOE for the first quarter of 2009.
Chemicals
Chemical segment earnings for the first quarter of 2009 were $169 million, compared with $179 million for the same period in 2008. The first quarter of 2009 results reflect higher caustic soda margins, offset by lower volumes in chlorine, caustic soda and polyvinyl chloride.
Midstream, Marketing and Other
Midstream segment earnings were $14 million for the first quarter of 2009, compared with $123 million for the first quarter of 2008. The earnings decline for the first quarter of 2009 reflects significantly lower NGL prices in the gas processing business and negative mark to market adjustments in crude oil marketing.
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 actual results to differ materially include, but are not limited to: global commodity price fluctuations and supply/demand considerations for oil, gas and chemicals; not successfully completing (or any material delay in) any expansions, field development, capital projects, acquisitions, or dispositions; higher-than-expected costs; political risk; exploration risks, such as drilling of unsuccessful wells; operational interruptions and changes in tax rates. 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 disclosures 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) 2009 2008 ========================================== ======= ======= SEGMENT NET SALES Oil and Gas $ 2,137 $ 4,518 Chemical 792 1,267 Midstream, Marketing and Other 228 405 Eliminations (84) (170) ------- ------- Net sales $ 3,073 $ 6,020 ========================================== ======= ======= SEGMENT EARNINGS Oil and Gas (a),(b) $ 545 $ 2,888 Chemical 169 179 Midstream, Marketing and Other 14 123 ------- ------- 728 3,190 Unallocated Corporate Items Interest expense, net (20) -- Income taxes (241) (1,294) Other (c) (96) (77) ------- ------- Income from Continuing Operations (a) 371 1,819 Discontinued operations, net (3) 27 ------- ------- NET INCOME (a) $ 368 $ 1,846 ======= ======= BASIC EARNINGS PER COMMON SHARE Income from continuing operations $ 0.45 $ 2.21 Discontinued operations, net -- 0.03 ------- ------- $ 0.45 $ 2.24 ======= ======= DILUTED EARNINGS PER COMMON SHARE (d) Income from continuing operations $ 0.45 $ 2.19 Discontinued operations, net -- 0.03 ------- ------- $ 0.45 $ 2.22 ======= ======= AVERAGE BASIC COMMON SHARES OUTSTANDING (d) BASIC 811.8 825.5 DILUTED 814.4 829.8 ========================================== ======= ======= (a) Net Income - Net income and income from continuing operations represent amounts attributable to Common Stock, after deducting non-controlling interest of $9 million and $29 million for the first quarter 2009 and 2008, respectively. Oil and gas segment earnings are also presented net of these non-controlling interest amounts. (b) Oil and Gas - The first quarter of 2009 includes an $8 million pretax charge for the terminations of rig contracts. (c) Unallocated Corporate Item - Other - The first quarter of 2009 includes a pretax charge of $32 million of severance accruals and $15 million for railcar leases. (d) Earnings per Share - The 2008 earnings per share amounts reflect the adoption on January 1, 2009 of FSP No. EITF 03-06-1 dealing with participating securities. SUMMARY OF CAPITAL EXPENDITURES AND DD&A EXPENSE First Quarter ---------------- ($ millions) 2009 2008 ========================================== ======= ======= CAPITAL EXPENDITURES $ 1,071 $ 833 ======= ======= DEPRECIATION, DEPLETION AND AMORTIZATION OF ASSETS $ 786 $ 653 ========================================== ======= ======= ITEMS AFFECTING COMPARABILITY OF CORE EARNINGS BETWEEN PERIODS Income/(Expense) First Quarter ---------------- ($ millions) 2009 2008 ========================================== ======= ======= FOREIGN EXCHANGE GAINS AND (LOSSES)* $ 37 $ (1) ========================================== ======= ======= *Amounts shown after tax. SUMMARY OF OPERATING STATISTICS First Quarter ---------------- 2009 2008 ========================================== ======= ======= NET OIL, GAS AND LIQUIDS SALES VOLUMES PER DAY United States Crude Oil and Liquids (MBBL) California 97 87 Permian 169 170 Mid-Continent and Rockies 10 4 ------- ------- Total 276 261 Natural Gas (MMCF) California 216 245 Permian 194 177 Mid-Continent and Rockies 210 158 ------- ------- Total 620 580 Latin America Crude Oil (MBBL) Argentina 45 37 Colombia 47 42 ------- ------- Total 92 79 Natural Gas (MMCF) Argentina 33 22 Bolivia 15 21 ------- ------- Total 48 43 Middle East/North Africa Crude Oil and Liquids (MBBL) Oman 35 20 Dolphin 20 22 Qatar 47 46 Yemen 31 25 Libya 5 17 ------- ------- Total 138 130 Natural Gas (MMCF) Oman 24 23 Dolphin 205 200 ------- ------- Total 229 223 Barrels of Oil Equivalent (MBOE) Subtotal consolidated subsidiaries 656 611 Colombia non-controlled interest (6) (6) Yemen-Occidental net interest 4 2 ------- ------- Total Worldwide Sales Volumes(MBOE) 654 607 ========================================== ======= ======= SUMMARY OF OPERATING STATISTICS - PRODUCTION First Quarter ---------------- 2009 2008 ========================================== ======= ======= NET OIL, GAS AND LIQUIDS PRODUCTION PER DAY United States Crude Oil and Liquids (MBBL) 276 261 Natural Gas (MMCF) 620 580 Latin America Crude Oil (MBBL) Argentina 39 36 Colombia 48 42 ------- ------- Total 87 78 Natural Gas (MMCF) 48 43 Middle East/North Africa Crude Oil and Liquids (MBBL) Oman 34 20 Dolphin 21 22 Qatar 51 46 Yemen 28 25 Libya 8 22 ------- ------- Total 142 135 Natural Gas (MMCF) 229 223 Barrels of Oil Equivalent (MBOE) Subtotal consolidated subsidiaries 655 615 Colombia non-controlled interest (6) (6) Yemen-Occidental net interest 3 2 ------- ------- Total Worldwide Production - (MBOE) 652 611 ========================================== ======= =======
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.
SIGNIFICANT TRANSACTIONS AND EVENTS AFFECTING EARNINGS (continued) First Quarter ---------------------------------- ($ millions, except Diluted Diluted per-share amounts) 2009 EPS 2008 EPS ================================ ======= ======= ======= ======= TOTAL REPORTED EARNINGS* $ 368 $ 0.45 $ 1,846 $ 2.22 ======= ======= ======= ======= Oil and Gas Segment Earnings* $ 545 $ 2,888 Add: Rig terminations 8 -- ------- ------- Segment Core Results 553 2,888 ------- ------- Chemicals Segment Earnings 169 179 Add: No significant items affecting earnings -- -- ------- ------- Segment Core Results 169 179 ------- ------- Midstream, marketing and other Segment Earnings 14 123 Add: No significant items affecting earnings -- -- ------- ------- Segment Core Results 14 123 ------- ------- Total Segment Core Results 736 3,190 ------- ------- Corporate Corporate Results -- Non Segment** (360) (1,344) Add: Severance accrual 32 -- Railcar leases 15 -- Tax effect of pre-tax adjustments (19) -- Discontinued operations, net*** 3 (27) ------- ------- Corporate Core Results -- Non Segment (329) (1,371) ------- ------- TOTAL CORE RESULTS $ 407 $ 0.50 $ 1,819 $ 2.19 =============================== ======= ======= ======= ======= *Represents amounts attributable to common stock, after deducting non-controlling interest of $9 million and $29 million for the first quarter 2009 and 2008, respectively. **Interest expense, income taxes, G&A expense and other, and non- core items. ***Amounts shown after tax.