OilVoice - Occidental Petroleum Announces Third Quarter Net Income

Occidental Petroleum Announces Third Quarter Net Income

22 October 2009

Occidental Petroleum Corporation 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.