form8k-20100429.htm
 
UNITED STATES
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) April 29, 2010

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

 
Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions (see General Instruction A.2. below):

[   ]  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[   ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[   ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[   ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 
 
 
 

Section 2 – Financial Information

Item 2.02.  Results of Operations and Financial Condition

On April 29, 2010, Occidental Petroleum Corporation released information regarding its results of operations for the three months ended March 31, 2010.  The exhibits to this Form 8-K and the information set forth in this Item 2.02 are being furnished pursuant to Item 2.02, Results of Operations and Financial Condition.  The full text of the press release is attached to this report as Exhibit 99.1.  The full text of the speeches given by Dr. Ray R. Irani and Stephen I. Chazen are attached to this report as Exhibit 99.2.  Investor Relations Supplemental Schedules are attached to this report as Exhibit 99.3.  Earnings Conference Call Slides are attached to this report as Exhibit 99.4.  Forward-Looking Statements Disclosure for Earnings Release Presentation Materials is attached to this report as Exhibit 99.5.


Section 8 – Other Events

Item 8.01.  Other Events

On January 28, 2010, Occidental Petroleum Corporation announced income from continuing operations of $1.1 billion ($1.32 per diluted share) for the first quarter of 2010, compared with $371 million ($0.45 per diluted share) for the first quarter of 2009.

QUARTERLY RESULTS

Oil and Gas

Oil and gas segment earnings were $1.8 billion for the first quarter of 2010, compared with $545 million for the same period in 2009.  The increase in the first quarter of 2010 results was due to higher crude oil and natural gas prices and higher volumes.

For the first quarter of 2010, daily oil and gas sales volumes averaged 726,000 barrels of oil equivalent (BOE), compared with 713,000 BOE in the first quarter of 2009.  Volumes increased in the Middle East/North Africa and California and were partially offset by decreases in Latin America.  The Middle East/North Africa increase included new production from the Bahrain start-up and increased production from the Mukhaizna field in Oman.  Latin America volumes dropped in Argentina due to a labor strike.  Production was negatively impacted in the Middle East/North Africa, Long Beach and Colombia due to higher oil prices affecting our production sharing and similar contracts by 38,000 BOE per day.  Underlying daily production volumes were 743,000 BOE in the first quarter of 2010 compared to 711,000 BOE in the first quarter of 2009, largely reflecting the Bahrain production.

Oxy's realized price for worldwide crude oil was $71.88 per barrel for the first quarter of 2010, compared with $39.29 per barrel for the first quarter of 2009.  Domestic realized gas prices rose from $3.54 per MCF in the first quarter of 2009 to $5.62 per MCF for the first quarter of 2010.

Chemicals

Chemical segment earnings for the first quarter of 2010 were $30 million, compared with $169 million for the same period in 2009.  The first quarter 2010 results reflect the continued weakness in the domestic market, particularly in the housing and construction sectors, and the significant margin erosion that was experienced through 2009 that carried into 2010.

 
1
 
 

Midstream, Marketing and Other

Midstream segment earnings were $94 million for the first quarter of 2010, compared with $14 million for the first quarter of 2009.  Earnings for the first quarter of 2010 reflect higher margins in the marketing and trading businesses, improved prices in the gas processing business, and higher pipeline income from Dolphin.

Forward-Looking Statements

Statements in this report 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 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.

 
2
 
 

Attachment 1

SUMMARY OF SEGMENT NET SALES AND EARNINGS

   
First Quarter
($ millions, except per-share amounts)
 
2010
 
2009
SEGMENT NET SALES
               
Oil and Gas
 
$
3,646
   
$
2,137
 
Chemical
   
956
     
792
 
Midstream, Marketing and Other
   
369
     
228
 
Eliminations
   
(200
)
   
(84
)
                 
Net Sales
 
$
4,771
   
$
3,073
 
                 
SEGMENT EARNINGS
               
Oil and Gas (a)
 
$
1,819
   
$
545
 
Chemical
   
30
     
169
 
Midstream, Marketing and Other
   
94
     
14
 
     
1,943
     
728
 
                 
Unallocated Corporate Items
               
Interest expense, net
   
(36
)
   
(20
)
Income taxes
   
(729
)
   
(241
)
Other (b)
   
(107
)
   
(96
)
                 
Income from Continuing Operations (a)
   
1,071
     
371
 
Discontinued operations, net
   
(7
)
   
(3
)
                 
NET INCOME (a)
 
$
1,064
   
$
368
 
                 
BASIC EARNINGS PER COMMON SHARE
               
Income from continuing operations
 
$
1.32
   
$
0.45
 
Discontinued operations, net
   
(0.01
)
   
-
 
   
$
1.31
   
$
0.45
 
                 
DILUTED EARNINGS PER COMMON SHARE
               
Income from continuing operations
 
$
1.32
   
$
0.45
 
Discontinued operations, net
   
(0.01
)
   
-
 
   
$
1.31
   
$
0.45
 
AVERAGE BASIC COMMON SHARES
               
OUTSTANDING
               
BASIC
   
812.1
     
810.7
 
DILUTED
   
813.5
     
813.3
 

(a) Net Income - Net income and income from continuing operations represent amounts attributable to Common Stock, after deducting non-controlling interest of $24 million and $9 million for the first quarter of 2010 and 2009, respectively.  Oil and gas segment earnings are presented net of these non-controlling interest amounts.

(b) Unallocated Corporate Items - Other - The first quarter of 2009 includes pre-tax charges of $32 million related to severance and $15 million for railcar leases.

 
3
 
 

Attachment 2


SUMMARY OF CAPITAL EXPENDITURES AND DD&A EXPENSE

   
First Quarter
($ millions)
 
2010
 
2009
CAPITAL EXPENDITURES
 
$
848
   
$
1,071
 
                 
DEPRECIATION, DEPLETION AND
               
AMORTIZATION OF ASSETS
 
$
874
   
$
786
 




ITEMS AFFECTING COMPARABILITY OF CORE EARNINGS
BETWEEN PERIODS

Income / (Expense)
 
First Quarter
($ millions)
 
2010
 
2009
                 
Foreign exchange gains and (losses) *
 
$
(5
)
 
$
37
 

* Amounts shown after tax.

 
4
 
 

Attachment 3


SUMMARY OF OPERATING STATISTICS - SALES
 
   
First Quarter
   
2010
 
2009
NET OIL, GAS AND LIQUIDS SALES PER DAY
           
United States
           
Crude Oil and Liquids (MBBL)
           
California
 
94
   
97
 
Permian
 
160
   
166
 
Midcontinent Gas
 
17
   
13
 
Total
 
271
   
276
 
             
Natural Gas (MMCF)
           
California
 
295
   
216
 
Permian
 
125
   
124
 
Midcontinent Gas
 
255
   
280
 
Total
 
675
   
620
 
             
Latin America
           
Crude Oil (MBBL)
           
Argentina
 
36
   
45
 
Colombia
 
33
   
41
 
Total
 
69
   
86
 
             
Natural Gas (MMCF)
           
Argentina
 
31
   
33
 
Bolivia
 
12
   
15
 
Total
 
43
   
48
 
             
Middle East / North Africa
           
Crude Oil and Liquids (MBBL)
           
Bahrain
 
2
   
-
 
Dolphin
 
23
   
23
 
Libya
 
4
   
6
 
Oman
 
56
   
46
 
Qatar
 
74
   
75
 
Yemen
 
33
   
42
 
Total
 
192
   
192
 
             
Natural Gas (MMCF)
           
Bahrain
 
166
   
-
 
Dolphin
 
228
   
233
 
Oman
 
52
   
53
 
Total
 
446
   
286
 
             
Barrels of Oil Equivalent (MBOE)
           
             
Total  Sales - MBOE
 
726
   
713
 

 
5
 
 

Attachment 4

SUMMARY OF OPERATING STATISTICS - PRODUCTION

   
First Quarter
   
2010
 
2009
NET OIL, GAS AND LIQUIDS PRODUCTION
           
PER DAY
           
United States
           
Crude Oil and Liquids (MBBL)
 
271
   
276
 
Natural Gas (MMCF)
 
675
   
620
 
             
Latin America
           
Crude Oil (MBBL)
           
Argentina
 
37
   
39
 
Colombia
 
34
   
42
 
Total
 
71
   
81
 
             
Natural Gas (MMCF)
 
43
   
48
 
             
Middle East / North Africa
           
Crude Oil and Liquids (MBBL)
           
Bahrain
 
3
   
-
 
Dolphin
 
23
   
24
 
Libya
 
14
   
9
 
Oman
 
57
   
45
 
Qatar
 
75
   
79
 
Yemen
 
35
   
38
 
Total
 
207
   
195
 
             
Natural Gas (MMCF)
 
446
   
286
 
             
Barrels of Oil Equivalent (MBOE)
           
             
Total Worldwide Production - MBOE
 
743
   
711
 


 
6
 
 

Attachment 5

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.

   
First Quarter
($ millions, except per-share amounts)
 
2010
 
Diluted EPS
 
2009
 
Diluted EPS
TOTAL REPORTED EARNINGS
 
$
1,064
   
$
1.31
   
$
368
   
$
0.45
 
                                 
Oil and Gas
                               
Segment Earnings
 
$
1,819
           
$
545
         
Add:
                               
Rig contract terminations
   
-
             
8
         
                                 
Segment Core Results
   
1,819
             
553
         
                                 
Chemicals
                               
Segment Earnings
   
30
             
169
         
Add:
                               
No significant items affecting earnings
   
-
             
-
         
                                 
Segment Core Results
   
30
             
169
         
                                 
Midstream, Marketing and Other
                               
Segment Earnings
   
94
             
14
         
Add:
                               
No significant items affecting earnings
   
-
             
-
         
                                 
Segment Core Results
   
94
             
14
         
                                 
Total Segment Core Results
   
1,943
             
736
         
                                 
Corporate
                               
Corporate Results --
                               
Non Segment *
   
(879
)
           
(360
)
       
Add:
                               
Severance accrual
   
-
             
32
         
Railcar leases
   
-
             
15
         
Tax effect of pre-tax adjustments
   
-
             
(19
)
       
Discontinued operations, net **
   
7
             
3
         
                                 
Corporate Core Results - Non Segment
   
(872
)
           
(329
)
       
                                 
TOTAL CORE RESULTS
 
$
1,071
   
$
1.32
   
$
407
   
$
0.50
 

*
 
Interest expense, income taxes, G&A expense and other.
**
 
Amounts shown after tax.
 
 
7
 
 
 
Section 9 - Financial Statements and Exhibits

Item 9.01.  Financial Statements and Exhibits

(d)      Exhibits

99.1
 
Press release dated April 29, 2010.
     
99.2
 
Full text of speeches given by Dr. Ray R. Irani and Stephen I. Chazen.
     
99.3
 
Investor Relations Supplemental Schedules.
     
99.4
 
Earnings Conference Call Slides.
     
99.5
 
Forward-Looking Statements Disclosure for Earnings Release Presentation Materials.
 
 
8
 
 

 
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:                      April 29, 2010
/s/ ROY PINECI
 
 
Roy Pineci, Vice President, Controller
 
 
and Principal Accounting Officer
 
     
     
     
     
     
     
 
 
9
 
 

EXHIBIT INDEX


99.1
 
Press release dated April 29, 2010.
     
99.2
 
Full text of speeches given by Dr. Ray R. Irani and Stephen I. Chazen.
     
99.3
 
Investor Relations Supplemental Schedules.
     
99.4
 
Earnings Conference Call Slides.
     
99.5
 
Forward-Looking Statements Disclosure for Earnings Release Presentation Materials.