In announcing the results, Dr. Ray R. Irani, chairman and chief executive officer, said, "Our strong fourth quarter performance helped push net income for 2004 to a record high of nearly $2.5 billion, or $6.30 per share. Our success in increasing oil and natural gas production by 3.5 percent for the year to an average of 566,000 barrels of oil equivalent per day allowed us to maximize the benefits from robust oil and gas prices. In addition, our chemicals business had its best year since 1997. The strong performance of our business units allowed us to continue to strengthen our balance sheet by reducing our debt-to-capitalization ratio to 27 percent, the lowest in the company's history."
Oil and Gas
Oil and gas segment earnings were $977 million for the fourth quarter 2004, compared with $640 million for the fourth quarter 2003, an increase of 53 percent. The improvement in the fourth quarter 2004 earnings reflected higher worldwide crude oil and natural gas prices, partially offset by higher exploration expenses and higher operating costs. Oil and gas earnings of $3.544 billion for the twelve months were the highest in the company's history and were 33 percent higher than the $2.664 billion of 2003.
Chemical segment earnings were $130 million for the fourth quarter 2004 compared with $72 million for the fourth quarter 2003, an increase of 81 percent. The improvement in the fourth quarter 2004 was due to higher sales prices in all major products, partially offset by higher ethylene and energy costs. The fourth quarter 2004 also included the previously announced $12 million charge to write-off certain production facilities. Chemical earnings of $412 million for the twelve months 2004 were 87 percent higher than the $220 million of 2003.
Earnings from an equity investment are based on a preliminary estimate of their earnings.
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