Ecuador's Minister of Energy formally declared that Occidental's contract for the operation of Block 15 had been terminated and the Government of Ecuador has the right under Ecuadorian law to seize the assets immediately.
Despite the actions taken by the Government of Ecuador, Occidental remains committed to an amicable settlement of this dispute. Occidental's Block 15 operations represent approximately 7% of Occidental's first quarter worldwide production, 3% of its pro-forma proved consolidated reserves including the Vintage acquisition, and 2% of its total property plant and equipment, net of accumulated depreciation, depletion and amortization, at March
31 2006.
Occidental is currently reviewing the contents of a 33-page document, which it received from the Government of Ecuador. Occidental maintains that it has complied fully with all material obligations under its contract with the Government of Ecuador and is evaluating its legal options to defend its interests.
