Occidental Replaces 116% of 2007 Production
In 2007, Occidental Petroleum Corporation's consolidated subsidiaries had preliminary proved reserve additions from all sources of 242 million barrels of oil equivalent (BOE) compared to production of 209 million BOE, for a production replacement rate of 116 percent. Occidental incurred $4.45 billion in costs for oil and gas property acquisitions and exploration and development activities. At the end of 2007, Occidental's consolidated reserves-to-production ratio, assuming production remained at the 2007 level, was 13.7 years.
At year-end 2007, Occidental's worldwide proved reserves, on a consolidated basis, totaled 2.87 billion BOE compared to 2.83 billion BOE at the end of 2006.
The 2007 consolidated proved reserve additions totaled 242 million BOE. Improved recovery provided 104 percent of total additions, acquisitions 25 percent, extensions and discoveries 10 percent, which were partially offset by reductions in previous estimates of the total proved reserve additions.
Over 90 percent of the net additions were in the United States, with the most substantial increases in the Permian Basin, Elk Hills field and the Rocky Mountains. In the Permian Basin, the increased reserves were attributable to higher prices and enhanced recovery techniques, such as drilling and water flood wells, additional CO2 flood development programs and bolt-on acquisitions. The Elk Hills operations employ infill drilling and both gas flood and water flood techniques which contributed to their increased reserves.
In 2007, Occidental increased proved developed reserves to 80 percent of total proved reserves from 78 percent at year-end 2006. The Dolphin project transferred 101 million BOE to the proved developed category during 2007, with no remaining undeveloped reserves at December 31, 2007 for this project. In the United States, the Elk Hills field and the Permian Basin transferred 21 million BOE each into proved developed reserves from undeveloped.
For the three-year period 2005-2007, Occidental's consolidated proved reserve additions totaled 1.125 billion BOE, and total production equaled 580 million BOE, for a reserve replacement rate of 194 percent. Over the past three years, Occidental incurred $17.63 billion in costs for property acquisitions and exploration and development activities. Disclosures in this press release are for continuing operations as of December 31, 2007; accordingly, Pakistan and Horn Mountain reserves and costs have been excluded.
Occidental sold its 33 million BOE share of a Russian joint venture in January 2007. After this sale, only the minority shareholder's interest in a Colombian affiliate and an equity investment in Yemen remain classified in other interests.
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