OXY Reports $1.2B Net Income, Record Production in 3Q 2010

Occidental Petroleum (OXY) announced income from continuing operations for the third quarter of 2010 of $1.2 billion ($1.47 per diluted share), compared with $929 million ($1.14 per diluted share) for the third quarter of 2009. Net income was $1.2 billion ($1.46 per diluted share) for the third quarter of 2010, compared with $927 million ($1.14 per diluted share) for the third quarter of 2009.

In announcing the results, Dr. Ray R. Irani, Chairman and Chief Executive Officer, said, "The third quarter 2010 net income of $1.2 billion was 28 percent higher than the same period of 2009. Our oil & gas production of 751,000 BOE per day was the highest in Oxy's history and reflected our continuing growth representing a 6.5-percent increase over 2009. We continue to generate significant cash flow with the first nine months of 2010 results generating cash flow from operating activities of $6.6 billion. Free cash flow after capital spending and dividends was $3.1 billion."

QUARTERLY RESULTS - Oil and Gas

Oil and gas segment earnings were $1.7 billion for the third quarter of 2010, compared with $1.5 billion for the same period in 2009. The increase in the third quarter of 2010 results was due to higher crude oil and natural gas prices and higher volumes, partially offset by higher operating costs and DD&A rates.

For the third quarter of 2010, daily oil and gas production volumes averaged 751,000 barrels of oil equivalent (BOE), compared with 705,000 BOE in the third quarter of 2009. Volumes increased 6.5 percent, primarily in the Middle East/North Africa, with smaller increases in Argentina and the United States. The Middle East/North Africa increase included new production from the Bahrain start-up and increased production from the Mukhaizna field in Oman. Daily sales volumes were 749,000 BOE in the third quarter of 2010, compared to 702,000 BOE in the third quarter of 2009.

Oxy's realized price for worldwide crude oil was $70.71 per barrel for the third quarter of 2010, compared with $62.79 per barrel for the third quarter of 2009. Domestic realized gas prices rose from $3.04 per MCF in the third quarter of 2009 to $4.20 per MCF for the third quarter of 2010.

NINE-MONTH RESULTS

Year-to-date 2010 income from continuing operations was $3.3 billion ($4.09 per diluted share), compared with $2.0 billion ($2.44 per diluted share) for 2009. Net income for the first nine months of 2010 was $3.3 billion ($4.07 per diluted share), compared with $2.0 billion ($2.43 per diluted share) for the same period in 2009.

Oil and Gas

Oil and gas segment earnings were $5.4 billion for the nine months of 2010, compared with $3.1 billion for the same period of 2009. The $2.3 billion increase in the 2010 results reflected higher crude oil and natural gas prices and higher volumes, partially offset by higher operating costs and DD&A rates.

Daily oil and gas production volumes for the nine months were 746,000 BOE for 2010, compared with 711,000 BOE for the 2009 period, an increase of nearly 5 percent. Volumes increased in the Middle East/North Africa, resulting from the new production in Bahrain and higher production in the Mukhaizna field in Oman, and domestically in California. Production was negatively impacted in the Middle East/North Africa, Long Beach and Colombia resulting from higher year-over-year average oil prices affecting production sharing and similar contracts by 21,000 BOE per day. Daily sales volumes were 741,000 BOE in the first nine months of 2010, compared with 711,000 BOE for 2009.

Oxy's realized price for worldwide crude oil was $71.57 per barrel for the nine months of 2010, compared with $51.44 per barrel for the nine months of 2009. Domestic realized gas prices increased from $3.15 per MCF in the nine months of 2009 to $4.67 per MCF in the nine months of 2010.

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