LOS ANGELES, Oct. 22, 2009 (GLOBE NEWSWIRE) -- Occidental Petroleum Corporation (NYSE:OXY) announced net income of $927 million ($1.14 per diluted share) for the third quarter of 2009, compared with $2.3 billion ($2.77 per diluted share) for the third quarter of 2008.
In announcing the results, Dr. Ray R. Irani, Chairman and Chief Executive Officer, said, "Occidental achieved year-over-year production growth of nearly seven percent in the third quarter and eight percent in the nine months of 2009. In addition, higher worldwide crude oil prices resulted in an increase in Occidental's third quarter of 2009 net income of 36 percent over the second quarter of 2009.
"Our Kern County discovery has made a significant contribution to this production growth. Kern County gross production run rates grew from 7,700 BOE per day around the end of the first quarter, to 17,300 BOE per day at the end of the second quarter and to approximately 26,000 BOE per day at the end of the third quarter."
QUARTERLY RESULTS
Oil and Gas
Oil and gas segment earnings were $1.5 billion for the third quarter of 2009, compared with $3.6 billion for the same period in 2008. The decrease in the third quarter 2009 segment earnings reflected lower crude oil and natural gas prices, partially offset by higher oil and gas sales volumes and lower operating expenses.
For the third quarter of 2009, daily oil and gas sales volumes averaged 628,000 barrels of oil equivalent (BOE), compared with 588,000 BOE per day in the third quarter of 2008. Volumes increased by six percent domestically, mainly from California and the Permian and by 15 percent in the Middle East/North Africa largely in Dolphin and Oman, partially offset by a six-percent decrease in Latin America mostly due to a labor strike in Argentina. Increased California volumes resulted largely from the new exploration discoveries in Kern County.
Oxy's realized price for worldwide crude oil was $62.79 per barrel for the third quarter of 2009, compared with $104.15 per barrel for the third quarter of 2008. Domestic realized gas prices decreased from $9.35 per MCF in the third quarter of 2008 to $3.04 per MCF for the third quarter of 2009.
Chemicals
Chemical segment earnings for the third quarter of 2009 were $72 million, compared with $219 million for the same period in 2008. The third quarter 2009 results reflect the continued weakness in the U.S. housing, automotive and durable goods sectors resulting in lower margins for caustic soda and polyvinyl chloride and lower volumes for chlorine, caustic soda, potassium hydroxide and polyvinyl chloride.
Midstream, Marketing and Other
Midstream segment earnings were $77 million for the third quarter of 2009, compared with $66 million for the third quarter of 2008. The third quarter of 2009 reflects better results in marketing operations, partially offset by lower margins in the gas processing business.
NINE MONTH RESULTS
Net income for the nine months of 2009 was $2.0 billion ($2.43 per diluted share), compared with $6.4 billion ($7.77 per diluted share) for the nine months of 2008.
Oil and Gas
Oil and gas segment earnings were $3.1 billion for the nine months of 2009, compared with $10.3 billion for the same period of 2008. The decrease in segment earnings reflected lower crude oil and natural gas prices, partially offset by higher oil and gas sales volumes and lower operating and administrative costs.
Daily oil and gas sales volumes for the first nine months was 643,000 BOE per day for 2009, compared with 594,000 BOE per day for the same 2008 period. Volumes increased by five percent domestically mainly in California and Midcontinent/Rockies, by 14 percent in Latin America, and by 12 percent in the Middle East/North Africa largely due to Dolphin and Oman.
Oxy's realized price for worldwide crude oil was $51.44 per barrel for the nine months of 2009, compared with $100.39 per barrel for the nine months of 2008. Domestic realized gas prices decreased from $9.18 per MCF in the nine months of 2008 to $3.15 per MCF in the nine months of 2009.
Chemicals
Chemical segment earnings were $356 million for the nine months of 2009, compared with $542 million for the nine months of 2008. The 2009 results reflect lower volumes and prices for chlorine, caustic soda and polyvinyl chloride due to the economic slowdown, partially offset by lower feedstock and energy costs.
Midstream, Marketing and Other
Midstream segment earnings were $154 million for the nine months of 2009, compared with $350 million for the same period in 2008. The earnings decline in 2009 reflects lower margins in the gas processing business.
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," "should," "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; exploration risks, such as drilling of unsuccessful wells; not successfully completing (or any material delay in) any expansions, field development, capital projects, acquisitions, or dispositions; higher-than-expected costs; political risk; 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
Third Quarter Nine Months
(In millions, except ---------------- ----------------
per-share amounts) 2009 2008 2009 2008
================================ ======= ======= ======= =======
SEGMENT NET SALES
Oil and Gas $ 3,089 $ 5,422 $ 7,952 $15,441
Chemical 842 1,454 2,445 4,107
Midstream, Marketing and Other 285 381 763 1,204
Eliminations (112) (197) (296) (556)
------- ------- ------- -------
Net sales $ 4,104 $ 7,060 $10,864 $20,196
================================ ======= ======= ======= =======
SEGMENT EARNINGS
Oil and Gas (a), (b) $ 1,464 $ 3,618 $ 3,092 $10,312
Chemical 72 219 356 542
Midstream, Marketing and Other 77 66 154 350
------- ------- ------- -------
1,613 3,903 3,602 11,204
Unallocated Corporate Items
Interest expense, net (33) (3) (76) (10)
Income taxes (549) (1,546) (1,245) (4,511)
Other (c) (102) (82) (297) (292)
------- ------- ------- -------
Income from Continuing Operations(a) 929 2,272 1,984 6,391
Discontinued operations, net (2) (1) (7) 23
------- ------- ------- -------
NET INCOME (a) $ 927 $ 2,271 $ 1,977 $ 6,414
======= ======= ======= =======
BASIC EARNINGS PER COMMON SHARE
Income from continuing
operations $ 1.14 $ 2.78 $ 2.44 $ 7.78
Discontinued operations, net -- -- (0.01) 0.03
------- ------- ------- -------
$ 1.14 $ 2.78 $ 2.43 $ 7.81
======= ======= ======= =======
DILUTED EARNINGS PER COMMON SHARE
Income from continuing
operations $ 1.14 $ 2.77 $ 2.44 $ 7.74
Discontinued operations, net -- -- (0.01) 0.03
------- ------- ------- -------
$ 1.14 $ 2.77 $ 2.43 $ 7.77
======= ======= ======= =======
AVERAGE COMMON SHARES OUTSTANDING
BASIC 811.8 815.3 811.1 820.1
DILUTED 814.4 817.6 813.9 823.5
================================ ======= ======= ======= =======
(a) Net Income - Net income and income from continuing operations represent amounts attributable to Common Stock, after deducting non-controlling interest of $14 million and $38 million for the third quarter and $35 million and $104 million for the nine months ended September 30, 2009 and 2008, respectively. Oil and gas segment earnings are also presented net of these non-controlling interest amounts.
(b) Oil and Gas - The nine months of 2009 includes an $8 million pre-tax charge for rig contract termination costs.
(c) Unallocated Corporate Items - Other - The nine months of 2009 includes non-core pre-tax charges of $40 million related to severance and $15 million for railcar leases.
SUMMARY OF CAPITAL EXPENDITURES AND DD&A EXPENSE
Third Quarter Nine Months
---------------- ----------------
($ millions) 2009 2008 2009 2008
================================ ======= ======= ======= =======
CAPITAL EXPENDITURES $ 746 $ 1,199 $ 2,649 $ 3,070
======= ======= ======= =======
DEPRECIATION, DEPLETION
AND AMORTIZATION
OF ASSETS $ 769 $ 683 $ 2,297 $ 1,957
================================ ======= ======= ======= =======
ITEMS AFFECTING COMPARABILITY OF CORE EARNINGS BETWEEN PERIODS
Income/(Expense) Third Quarter Nine Months
---------------- ----------------
($ millions) 2009 2008 2009 2008
================================ ======= ======= ======= =======
Foreign exchange gains and
(losses)* $ (3) $ 8 $ 28 $ 3
================================ ======= ======= ======= =======
*Amounts shown after tax.
SUMMARY OF OPERATING STATISTICS
Third Quarter Nine Months
---------------- ----------------
2009 2008 2009 2008
================================ ======= ======= ======= =======
NET OIL, GAS AND LIQUIDS
SALES PER DAY
United States
Crude Oil and Liquids (MBBL)
California 92 87 93 86
Permian 168 166 168 168
Midcontinent/Rockies 9 8 10 6
------- ------- ------- -------
Total 269 261 271 260
Natural Gas (MMCF)
California 269 236 240 239
Permian 208 169 200 179
Midcontinent/Rockies 176 165 192 166
------- ------- ------- -------
Total 653 570 632 584
Latin America
Crude Oil (MBBL)
Argentina 30 38 37 32
Colombia 44 43 46 43
------- ------- ------- -------
Total 74 81 83 75
Natural Gas (MMCF)
Argentina 27 24 30 19
Bolivia 18 21 17 21
------- ------- ------- -------
Total 45 45 47 40
Middle East/North Africa
Crude Oil and Liquids (MBBL)
Oman 39 23 38 21
Dolphin 21 18 22 20
Qatar 46 49 48 47
Yemen 22 20 25 22
Libya 4 7 6 17
------- ------- ------- -------
Total 132 117 139 127
Natural Gas (MMCF)
Oman 22 25 23 24
Dolphin 208 165 218 176
------- ------- ------- -------
Total 230 190 241 200
Barrels of Oil Equivalent (MBOE)
Subtotal consolidated subsidiaries 630 593 646 599
Colombia-minority interest (5) (7) (6) (7)
Yemen-Occidental net interest 3 2 3 2
------- ------- ------- -------
Total Worldwide Sales Volumes -
MBOE 628 588 643 594
================================ ======= ======= ======= =======
SUMMARY OF OPERATING STATISTICS
Third Quarter Nine Months
---------------- ----------------
2009 2008 2009 2008
================================ ======= ======= ======= =======
NET OIL, GAS AND LIQUIDS
PRODUCTION PER DAY
United States
Crude Oil and Liquids (MBBL) 269 261 271 260
Natural Gas (MMCF) 653 570 632 584
Latin America
Crude Oil (MBBL)
Argentina 31 39 36 33
Colombia 43 43 46 43
------- ------- ------- -------
Total 74 82 82 76
Natural Gas (MMCF) 45 45 47 40
Middle East/North Africa
Crude Oil and Liquids (MBBL)
Oman 40 24 38 21
Dolphin 21 18 22 20
Qatar 48 48 48 47
Yemen 22 19 25 22
Libya 5 9 7 17
------- ------- ------- -------
Total 136 118 140 127
Natural Gas (MMCF) 230 190 241 200
Barrels of Oil Equivalent (MBOE)
Subtotal consolidated subsidiaries 634 595 646 600
Colombia-minority interest (5) (6) (6) (6)
Yemen-Occidental net interest 3 2 3 2
------- ------- ------- -------
Total Worldwide Production Volumes -
MBOE 632 591 643 596
================================ ======= ======= ======= =======
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
Third Quarter
----------------------------------
($ millions, except Diluted Diluted
per-share amounts) 2009 EPS 2008 EPS
================================ ======= ======= ======= =======
TOTAL REPORTED EARNINGS* $ 927 $ 1.14 $ 2,271 $ 2.77
======= ======= ======= =======
Oil and Gas*
Segment Earnings $ 1,464 $ 3,618
Add:
No significant items
affecting earning -- --
------- -------
Segment Core Results 1,464 3,618
------- -------
Chemicals
Segment Earnings 72 219
Add:
No significant items
affecting earning -- --
------- -------
Segment Core Results 72 219
------- -------
Midstream, Marketing and Other
Segment Earnings 77 66
Add:
No significant items
affecting earnings -- --
------- -------
Segment Core Results 77 66
------- -------
Total Segment Core Results 1,613 3,903
------- -------
Corporate
Corporate Results --
Non Segment** (686) (1,632)
Add:
Discontinued operations, net*** 2 1
------- -------
Corporate Core Results --
Non Segment (684) (1,631)
------- -------
TOTAL CORE RESULTS $ 929 $ 1.14 $ 2,272 $ 2.77
=============================== ======= ======= ======= =======
*Represents amounts attributable to common stock, after deducting
non-controlling interest of $14 million and $38 million for the
third quarter 2009 and 2008, respectively.
**Interest expense, income taxes, G&A expense and other.
***Amounts shown after tax.
SIGNIFICANT TRANSACTIONS AND EVENTS AFFECTING EARNINGS (continued)
Nine Months
----------------------------------
($ millions, except Diluted Diluted
per-share amounts) 2009 EPS 2008 EPS
================================ ======= ======= ======= =======
TOTAL REPORTED EARNINGS* $ 1,977 $ 2.43 $ 6,414 $ 7.77
======= ======= ======= =======
Oil and Gas*
Segment Earnings $ 3,092 $10,312
Add:
Rig terminations 8 --
------- -------
Segment Core Results 3,100 10,312
------- -------
Chemicals
Segment Earnings 356 542
Add:
No significant items
affecting earnings -- --
------- -------
Segment Core Results 356 542
------- -------
Midstream, Marketing and Other
Segment Earnings 154 350
Add:
No significant items
affecting earnings -- --
------- -------
Segment Core Results 154 350
------- -------
Total Segment Core Results 3,610 11,204
------- -------
Corporate
Corporate Results --
Non Segment** (1,625) (4,790)
Add:
Severance accruals 40 --
Railcar leases 15 --
Tax effect of pre-tax
adjustments (22) --
Discontinued operations, net*** 7 (23)
------- -------
Corporate Core Results --
Non Segment (1,585) (4,813)
------- -------
TOTAL CORE RESULTS $ 2,025 $ 2.48 $ 6,391 $ 7.74
================================ ======= ======= ======= =======
*Represents amounts attributable to common stock, after deducting
non-controlling interest of $35 million and $104 million for the
nine months of 2009 and 2008, respectively.
**Interest expense, income taxes, G&A expense and other.
***Amounts shown after tax.