In announcing the results, Dr. Ray R. Irani, chairman, president and chief executive officer, said, "The first quarter daily production was 636,000 barrels of oil equivalent, the highest quarterly production in Oxy's history. This was an increase of 13 percent over the first quarter of 2005. We expect production for the second quarter to be approximately 650,000 BOE, which would be another record. First quarter core earnings of $1.22 billion set a new record surpassing the previous record set in the last quarter of 2005."
Oil and Gas
Oil and gas segment earnings were a record $2.0 billion for the first quarter 2006, which was a 48 percent increase from the $1.35 billion in earnings for the first quarter 2005. The first quarter 2006 earnings reflected a $700 million improvement from the impact of higher energy prices and $198 million increase from higher production, partially offset by higher operating expenses and increased DD&A rates.
For the quarter, oil and gas daily production averaged a record high 636,000 barrels of oil equivalent(BOE), which was a 13 percent increase over the 565,000 equivalent barrels per day produced in the first quarter 2005. The increase included two months of Vintage production at 57,000 BOE per day which added 38,000 BOE per day to Occidental's quarterly production, Libya production of 22,000 BOE per day that came on line in the third quarter of 2005, and 25,000 BOE per day from Permian acquisitions that were acquired in the second quarter of 2005. Compared to a year ago, production under the Company's production sharing contracts in Oman, Qatar, Yemen and Long Beach was negatively impacted by higher prices. The average price for West Texas Intermediate crude oil in the first quarter 2006 was $63.48 per barrel compared to $49.84 per barrel in the first quarter 2005. If prices had remained at first quarter 2005 levels, production in the first quarter 2006 would have been 8,000 equivalent barrels per day higher.
Chemical segment earnings were $248 million for the first quarter 2006, compared with $214 million for the first quarter 2005. The improvement was due to increased volumes in chlor-alkali and higher margins in chlor-alkali and polyvinyl chloride, resulting from higher sales prices, partially offset by higher energy and feedstock costs.
Core earnings for the first quarter 2006 were $1.22 billion ($2.87 basic per share), compared with $866 million ($2.16 basic per share) for the same period in 2005.
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