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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) OCTOBER 16, 2001
OCCIDENTAL PETROLEUM CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 1-9210 95-4035997
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
10889 WILSHIRE BOULEVARD
LOS ANGELES, CALIFORNIA 90024
(Address of principal executive offices) (ZIP code)
Registrant's telephone number, including area code:
(310) 208-8800
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Item 9. Regulation FD Disclosure
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The following is a presentation made by Dr. Ray R. Irani, Chairman and
Chief Executive Officer of Occidental Petroleum Corporation, and Stephen I.
Chazen, Chief Financial Officer and Executive Vice President - Corporate
Development of Occidental.
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Occidental Petroleum Corporation
[graphic omitted] Dr. Ray R. Irani
Chairman and Chief Executive Officer
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Stephen I. Chazen
Chief Financial Officer &
Executive Vice President - Corporate Development
October 2001
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Outline
o Strategic Overview
o Financial Review
o Operations Review
o Growth Initiatives
o Summary
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Business Strategy
o Focus on large, long-lived oil and gas
assets with growth potential
o Maintain financial discipline; strengthen
balance sheet
o Harvest cash from chemicals
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Oil & Gas Growth Strategy
o Three-part strategy - no single part
dominates
> Exploration
o Quality of exploration projects defines
budget allocations
> Seek EOR projects with superior
returns
> Acquire assets with upside potential at
attractive prices & divest assets with
limited earnings potential
o Opportunity & disciplined
investment drive business success
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Debt Reduction
Total Debt
Pro-Forma Post Altura
(+ Oxy Permian Debt) -----> $ 9,175
Net Asset Sales
2000 ---------------------> (1,447) (1)
2001 ---------------------> (758) (2)
Cash From Operation
2000-2001 ----------------> (1,841)
Pro-Forma 6/30/01 $ 5,129
(1) CanOxy, Gulf of Mexico, Netherlands, Durez & Other
(2) Indonesia, Texas Pipeline & Other
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Total Debt
[the following is a tabular representation of graphical materials]
$ Millions
Pro-Forma Pro-Forma
12/31/99 Post Altura 12/31/00 6/30/01 6/30/01
-------- ----------- -------- ------- ---------
Oxy Public Debt 4,372 5,766 3,541 3,536 3,536
Other Recourse Debt 1,076 1,009 915 843 843
Permian Non-recourse Debt -- 2,400 1,900 1,500 750
-------- ----------- -------- ------- ---------
Total 5,448 9,175 6,356 5,879 5,129
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Capitalization
[the following is a tabular representation of graphical materials]
$ Millions
Pro-Forma Pro-Forma
12/31/99 Post Altura 12/31/00 6/30/01 6/30/01
-------- ----------- -------- ------- ---------
Shareholders' Equity 3,523 3,748 4,774 5,595 5,720
Permian Non-recourse Debt -- 2,400 1,900 1,500 750
Oxy Public Debt 5,448 6,775 4,456 4,379 4,379
-------- ----------- -------- ------- ---------
Total 8,971 12,923 11,130 11,474 10,849
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Debt/Capitalization Ratio
[the following is a tabular representation of graphical materials]
$ Millions
Pro-Forma Pro-Forma
12/31/99 Post Altura 12/31/00 6/30/01 6/30/01
-------- ----------- -------- ------- ---------
Debt/Capitalization Ratio 61% 71% 57% 51% 48%
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Total Debt/Capitalization Ratio
[the following is a tabular representation of graphical materials]
$ Millions
Pro-Forma
1995 1996 1997 1998 1999 2000 6/30/01
---- ---- ---- ---- ---- ---- ---------
Total Debt/Capitalization Ratio 68% 62% 67% 66% 61% 57% 48%
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Interest & Preferred Dividends
[the following is a tabular representation of graphical materials]
$ Millions
1995 1996 1997 1998 1999 2000
---- ---- ---- ---- ---- ----
Oxy Public Debt 540 451 407 451 468 368
Permian Non-recourse Debt 118
Preferred Dividends 93 93 88 17 7
Capital Trust Preferred 41 40
---- ---- ---- ---- ---- ----
Total 633 544 495 468 516 526
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Oil Companies' Total Debt
2001* 1997
---- ----
British Petroleum $20,500 $ 7,238
Chevron/Texaco 14,100 13,608
Exxon 11,200 9,952
Conoco 10,800 2,272
Phillips 9,900 6,659
Devon 8,500 150
Amerada Hess 5,300 2,127
Oxy 5,000 6,378
Anadarko 4,800 956
Burlington Resources 4,000 1,748
Kerr McGee 3,700 579
Unocal 3,500 2,692
Apache 2,900 1,519
* 2001 second quarter adjusted for subsequent events; numbers rounded
to nearest 000.
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Proved Reserves
[the following is a tabular representation of graphical materials]
Billion BOE
1997 1998 1999 2000
---- ---- ---- ----
Proved Reserves 1.31 1.42 1.35 2.17*
* 66% increase from 1997
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Production
[the following is a tabular representation of graphical materials]
Thousand BOE/Day
1997 1998 1999 2000 2001 Est.
---- ---- ---- ---- ---------
Production 395 438 425 461 465
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1999 Profitability/BOE*
[the following is a tabular representation of graphical materials]
$/BOE
-----
OXY 5.30
APA 4.55
APC 3.98
BP 3.88
COC 3.73
XOM 3.53
KMG 3.48
CHV 3.03
MRO 2.92
P 2.91
AHC 2.72
TX 2.22
UCL 1.68
BR 0.88
* Exploration and production income (per FAS 69 format) after taxes and before
interest expense
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2000 Profitability/BOE*
[the following is a tabular representation of graphical materials]
$/BOE
-----
OXY 11.30
APC 9.06
APA 8.92
KMG 8.76
BP 7.94
CHV 7.50
XOM 7.04
COC 7.00
TX 6.83
AHC 6.44
P 6.42
MRO 6.11
UCL 5.70
BR 5.23
* Exploration and production income (per FAS 69 format) after taxes and before
interest expense. The Marathon (MRO) results exclude a non-cash charge of
approximately $900 million.
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2001 Profitability/BOE*
[the following is a tabular representation of graphical materials]
First Half
$/BOE
----------
OXY 20.91 (includes 5.01 representing California Gas Premium)
APC 16.00
APA 15.87
BP 14.87
BR 14.35
KMG 14.10
MRO 13.83
XOM 12.97
COC 12.52
UCL 12.17
CHV 11.98
AHC 11.85
TX 11.84
P 11.05
* Exploration and production income before U.S. income taxes and before
interest expense
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Costs Per BOE
Assumptions
o Chemicals earnings = $350 million
o Interest based on current debt level
o All costs & production based on year-
to-date results through 9/30
o Capital = $1 billion
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Costs Per BOE
Cash Flow Break-Even
$/BOE
------
Lifting Costs/Other $5.82
DD&A 4.34
SG&A 2.10
Chemicals (2.61)
Interest Expense 2.28
Dividends 2.17
Taxes 0.95
------
Total $15.04
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Middle East
[map of Middle East]
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Middle East
[map of Middle East]
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Middle East - Arabian Peninsula
[map of Arabian Peninsula]
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Middle East - Arabian Peninsula
[map of Arabian Peninsula]
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Middle East - Arabian Peninsula
[map of Arabian Peninsula]
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Saudi Arabia - Core Venture 2
[map of Saudi Arabia] o Explore blocks
40-49 in the Red
Sea area
o Develop Midyan &
Barqan gas
discoveries
o Construct Midyan
& Barqan
processing plant
o Develop
petrochemical
facility at Yanbu
o Develop power &
desalination
projects at Dhuba
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Saudi Arabia - Core Venture 2
[map of Saudi Arabia] o Long-term strategic
partnership
o New phase of
industrial Saudi
development
o Competitive returns on
investment
o Attractive risk/reward
ratio
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Oman
[map of Oman]
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Qatar
[map of Qatar] o Second generation
EOR will add reserves
and production
o New exploration
opportunities
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Yemen
[map of Yemen]
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Abu Dhabi - Dolphin Project
[map of Arabian Gulf Region]
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Ecuador
[map of Northern Ecuador]
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Horn Mountain
[map of Horn Mountain project in the Gulf of Mexico]
o 60 miles offshore/
> Water depth = 5,400 feet
o Gross reserves = 150 million BOE
o On Schedule/under budget
> First production (Late 2002)
> Peak production (2004)
o Oxy net 21,000 BOE/Day
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California Gas Exploration
[map of California gas-producing areas]
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Business Review - U.S.
COMBINED WEIGHTED AVERAGE RETURN ON CAPITAL = 20%
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Elk Hills Acquisition (2/8/98) Altura Acquisition (4/19/00)
Price = $3.5 Billion Price = $3.6 Billion
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Free Cash Flow (After Capital) Free Cash Flow (After Capital)
(2/8/98 - 6/30/01) (4/19/00 - 6/30/01)
$2.14 Billion $992 Million
Return on Capital = 18% Return on Capital = 22%
THUMS Acquisition (4/28/00)
Price = $110 Million
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Free Cash Flow (After Capital)
(4/28/00 - 6/30/01)
$107 Million
Return on Capital = 89%
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Return on Equity
Ten - Year Trend
(%)
Average - Years Annual Est.
------------------------------------------ ------ ----
10 Yrs 7 Yrs 5 Yrs 3 Yrs 2000 2001
------ ----- ----- ----- ---- ----
10.4 16.0 15.4 26.6 37.9 29.0
* Results are based on reported earnings through
2000 and First Call's average earnings estimate of
$4.18 per share for 2001.
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Return on Equity
[the following is a tabular representation of graphical materials]
2000
(%)
----
APA 56.4
KMG 40.8
OXY 37.9
COC 37.4
P 35.0
UCL 32.2
AHC 29.6
CHV 27.5
XOM 26.4
TX 20.4
APC 20.1
BP 19.7
BR 19.3
MRO 9.0
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Return on Capital Employed
Ten - Year Trend
(%)
Average - Years Annual Est.
------------------------------------------ ------ ----
10 Yrs 7 Yrs 5 Yrs 3 Yrs 2000 2001
------ ----- ----- ----- ---- ----
7.7 9.7 10.0 14.8 19.0 16.7
* Results are based on reported earnings through
2000 and First Call's average earnings estimate of
$4.18 per share for 2001.
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Return on Capital Employed
[the following is a tabular representation of graphical materials]
2000
(%)
----
XOM 24.2
COC 23.1
CHV 22.8
KMG 22.0
AHC 20.0
P 19.5
OXY 19.0
BP 17.5
UCL 16.4
TX 14.6
BR 13.3
APA 13.0
APC 12.5
MRO 7.9
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Summary
Restructuring Has Worked
o Stronger competitive position
> Improved risk profile
o Improved base earnings and cash flow
o Improved coverage ratios over wide range of
financial results
o Improved debt to capitalization ratio
* Lowest absolute debt level since 1985
o Low maturities over next several years
> Improved liquidity
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Summary
Growth Initiatives
Peak
First Peak Production
Production Production Rate
---------- ---------- ----------
Ecuador 1Q/2003 2004 30,000 bd
Gulf of Mexico
Horn Mountain 4/Q/2002 2004 21,000 bd
Qatar
ISND Phase 2 2002 2004 18,000 bd
ISSD 2002 2004 7,000 bd
Saudi Arabia
Midyan/Barqan 2003 2004 20 mmcfd
Red Sea ? ? ?
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Dolphin Project 2005 2005 500 mmcfd
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Occidental Petroleum Corporation
o Portions of this presentation are forward-looking and involve risks
and uncertainties that could significantly affect expected results.
Factors that could cause results to differ materially include, but are
not limited to: global commodity pricing fluctuations for oil, gas
and chemicals; competitive pricing pressures; higher than
expected costs including feedstocks; the supply/demand
considerations for Occidental's products; any general economic
recession domestically or internationally; and not successfully
completing any expansion, capital expenditure or acquisition.
o The United States Securities and Exchange Commission permits
oil and gas companies, in their filings with the SEC, to disclose
only proved reserves demonstrated by actual production or
conclusive formation tests to be economically producible under
existing economic and operating conditions. We use certain terms
in this presentation, such as probable and possible reserves, that
the SEC's guidelines strictly prohibit us from using in filings with
the SEC. U.S. investors are urged to consider closely the
disclosure in our Form 10-K, available from us through the
following toll-free 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.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
OCCIDENTAL PETROLEUM CORPORATION
(Registrant)
DATE: October 16, 2001 S. P. Dominick, Jr.
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S. P. Dominick, Jr., Vice President and Controller
(Chief Accounting and Duly Authorized Officer)