Oxy Reports Net Income of $2.297B for 2Q 2008

Occidental Petroleum Corporation announced a net income of $2.297 billion for the second quarter of 2008, compared with $1.412 billion for the second quarter of 2007.

Core results for the second quarter of 2008 were $2.300 billion, compared with $943 million for the second quarter of 2007.

In announcing the results, Dr. Ray R. Irani, Chairman and Chief Executive Officer, said, "Oxy's record net income for the second quarter of 2008 beat the previous record set during the first quarter of 2008 by 24 percent. Occidental's first six months of 2008 net income was 58 percent higher than our previous record first six month income achieved in 2007."
 
Oil and gas segment earnings were $3.806 billion for the second quarter of 2008, compared with $1.658 billion for the same period in 2007. The $2.1 billion increase in the second quarter 2008 segment earnings reflected $2.2 billion of increases from record crude oil and higher natural gas prices, higher oil and gas production and lower exploration expense, partially offset by increased DD&A rates and higher operating expenses.
For the second quarter of 2008, daily oil and gas production averaged 588,000 barrels of oil equivalent, compared with 558,000 BOE per day produced in the second quarter of 2007. The bulk of the production increase was the result of 46,000 BOE per day from the Dolphin project, which began production in the third quarter of 2007, and 11,000 BOE per day from recently acquired domestic assets, partially offset by lower production from Argentina as a result of a strike in May and by 19,000 BOE per day lower production caused by higher oil prices affecting our production sharing contracts. Argentina production was impacted by 15,000 BOE per day from the strike which lasted approximately five weeks and also halted all drilling programs. Production is now back at approximately pre-strike levels.
 
Oxy's realized price for worldwide crude oil was $110.12 per barrel for the second quarter of 2008, compared with $59.11 per barrel for the second quarter of 2007. Domestic realized gas prices increased from $7.07 per MCF in the second quarter of 2007 to $9.99 per MCF for the second quarter of 2008.
Chemical segment earnings for the second quarter of 2008 were $144 million, compared with $158 million for the same period in 2007.
 
Midstream segment earnings were $161 million for the second quarter of 2008, compared with $25 million for the second quarter of 2007. The second quarter of 2008 reflects higher pipeline income from Dolphin, which came on line in the second half of 2007, and higher margins in gas processing and marketing. Positive mark to market adjustments also contributed to pipeline and storage earnings during the second quarter of 2008.
Net income for the six months of 2008 was $4.143 billion ($5.01 per diluted share), compared with $2.624 billion for the six months of 2007.
 
Core results were $4.119 billion for the six months of 2008, compared with $1.731 billion for the six months of 2007.
 
Oil and gas segment earnings were $6.694 billion for the six months of 2008, compared with $3.541 billion for the same period of 2007. Oil and gas core results were $2.994 billion for the six months of 2007 after excluding a gain from the sale of Occidental's Russian joint venture interests of $412 million, a $23 million gain from the sale of other oil and gas interests and $112 million income from the resolution of certain legal disputes. The $3.7 billion increase in the 2008 core results from $2.994 billion in 2007 reflected $3.8 billion from higher crude oil and natural gas prices, increased oil and gas production and lower exploration expense, partially offset by higher operating expenses and increased DD&A rates.
 
Daily oil and gas production for the first six months was 598,000 BOE per day for 2008, compared with 559,000 BOE per day for the same 2007 period. The nearly 7-percent increase was largely the result of 50,000 BOE per day from the Dolphin project and 7,000 BOE from recently acquired domestic assets, partially offset by 14,000 BOE per day from production sharing contracts, where volumes decrease with higher oil prices, and 7,000 BOE per day decrease in Argentina due to the strike.
 
Oxy's realized price for worldwide crude oil was $98.16 per barrel for the six months of 2008, compared with $55.34 per barrel for the six months of 2007. Domestic realized gas prices increased from $6.74 per MCF in the six months of 2007 to $9.09 per MCF in the six months of 2008.
 
Chemical segment earnings were $323 million for the six months of 2008, compared with $295 million for the six months of 2007. The six months 2008 results reflect higher margins for caustic soda, partially offset by lower margins for polyvinyl chloride.
 
Midstream segment earnings were $284 million for the six months of 2008, compared with $143 million for the same period in 2007. The improvement in 2008 reflected higher pipeline income from the Dolphin Pipeline and higher margins in gas processing and power generation.
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