OXY Touts 48% Increase in 3Q Earnings



Occidental Petroleum Corporation (OXY) announced earnings from continuing operations of $1.8 billion ($2.18 per diluted share) for the third quarter of 2011, compared with $1.2 billion ($1.48 per diluted share) for the third quarter of 2010. Net income was $1.8 billion ($2.17 per diluted share) for the third quarter of 2011, compared with the $1.2 billion ($1.46 per diluted share) for the third quarter of 2010.

In announcing the results, Stephen I. Chazen, President and Chief Executive Officer, said, "The third quarter 2011 income of $1.8 billion was 48 percent higher than the same period of 2010. The third quarter 2011 domestic production was 436,000 BOE per day, the highest in Occidental's history, and total sales were 743,000 BOE per day.

"We continue to generate strong financial results with cash flow from operations of $8.6 billion for the first nine months of 2011 and annualized ROE of 20 percent."

QUARTERLY RESULTS

Oil and gas segment earnings were $2.6 billion for the third quarter of 2011, compared with $1.8 billion for the same period in 2010. The increase in the third quarter of 2011 earnings was due to higher volumes and liquids prices.

For the third quarter of 2011, daily oil and gas production volumes averaged 739,000 barrels of oil equivalent (BOE), compared with 706,000 BOE in the third quarter of 2010. As a result of higher year-over-year average oil prices and other factors affecting production sharing and similar contracts, production was reduced in the Middle East/North Africa and Colombia by 13,000 BOE per day, with another 1,000 BOE per day reduction at THUMS in Long Beach.

The third quarter 2011 production volume increase was a result of 56,000 BOE per day higher domestic volumes, partially offset by lower volumes in the Middle East/North Africa and Colombia. The domestic increase was from Midcontinent and Other, including the new acquisitions in South Texas and the North Dakota Williston Basin, and California. The Middle East/North Africa was lower primarily due to the lack of production in Libya and price impacts on production sharing contracts, partially offset by higher production from our traditional areas in Oman and Mukhaizna and Iraq production that came on line in 2011. Colombia production was lower due to pipeline interruptions caused by insurgent activity.

Daily sales volumes increased from 713,000 BOE per day in the third quarter of 2010 to 743,000 BOE per day in the third quarter of 2011. The 2011 sales volumes were higher than the production volumes due to the timing of liftings.

Oxy's realized price for worldwide crude oil was $97.24 per barrel for the third quarter of 2011, compared with $72.31 per barrel for the third quarter of 2010. The third quarter of 2011 realized oil price represents 108 percent of the average WTI and 87 percent of the average Brent price for the quarter. About 60 percent of Oxy's oil production tracks world oil prices and 40 percent is indexed to WTI. Worldwide NGL prices were $56.06 per barrel in the third quarter of 2011, compared with $39.70 per barrel in the third quarter of 2010. Domestic gas prices increased slightly from $4.20 per MCF in the third quarter of 2010 to $4.23 per MCF for the third quarter of 2011.

NINE-MONTH RESULTS

Year-to-date 2011 core income was over $5.2 billion ($6.37 per diluted share), compared with $3.4 billion ($4.14 per diluted share) for the same period in 2010. Net income for the first nine months of 2011 was $5.1 billion ($6.31 per diluted share), compared with $3.3 billion ($4.07 per diluted share) for the same period in 2010.

Oil and gas segment earnings were $7.7 billion for the nine months of 2011, compared with $5.5 billion for the same period of 2010. The $2.2 billion increase in the 2011 results reflected higher crude oil and NGL prices and sales volumes, partially offset by higher operating costs and DD&A rates.

Oil and gas production volumes for the nine months were 728,000 BOE per day for 2011, compared with 703,000 BOE per day for the 2010 period. Higher year-over-year average oil prices and other factors affecting our production sharing and similar contracts lowered our Middle East/North Africa, Long Beach and Colombia production by 14,000 BOE per day.

Domestic volumes increased primarily due to new operations in South Texas and the Williston Basin. Middle East/North Africa production declined due to impacts of price and other factors on production sharing contracts and lower production in Libya, partially offset by new production in Iraq and higher production in Oman's Mukhaizna field.

Daily sales volumes were 726,000 BOE in the first nine months of 2011, compared with 701,000 BOE for 2010.

Oxy's realized prices improved for crude oil and NGLs but declined for natural gas on a year-over-year basis. Worldwide crude oil prices were $97.33 per barrel for the nine months of 2011, compared with $73.58 per barrel for the nine months of 2010. Worldwide NGL prices were $55.63 per barrel for the nine months of 2011, compared with $43.66 per barrel in the nine months of 2010. Domestic gas prices declined from $4.67 per MCF in the nine months of 2010 to $4.24 per MCF in the nine months of 2011.


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