Occidental Tops Market with Outstanding 3Q Results

Occidental Petroleum announced net income of $2.271 billion ($2.78 per diluted share) for the third quarter of 2008, compared with $1.324 billion ($1.58 per diluted share) for the third quarter of 2007.

In announcing the results, Dr. Ray R. Irani, Chairman and Chief Executive Officer, said, "Our production grew by 3 percent for the third quarter and 5.5 percent for the first nine months compared to last year. As we look forward, we believe our disciplined approach to fiscal management has positioned the company to continue to succeed in the current economic climate."

QUARTERLY RESULTS

Oil and Gas

Oil and gas segment earnings were $3.618 billion for the third quarter of 2008, compared with $1.955 billion for the same period in 2007. The $1.7 billion increase in the third quarter 2008 segment earnings reflected $1.8 billion of increases from higher crude oil and 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 third quarter of 2008, daily oil and gas production averaged 588,000 barrels of oil equivalent (BOE), compared with 570,000 BOE per day produced in the third quarter of 2007. The bulk of the production increase was the result of 31,000 BOE per day higher production from the Dolphin project, which began production in the third quarter of 2007, partially offset by 5,000 BOE per day lower production resulting from Hurricane Ike and 13,000 BOE per day lower production in Libya as a result of the new contract that became effective in the third quarter of 2008. Oxy's realized price for worldwide crude oil was $104.15 per barrel for the third quarter of 2008, compared with $67.81 per barrel for the third quarter of 2007. Domestic realized gas prices increased from $5.90 per MCF in the third quarter of 2007 to $9.35 per MCF for the third quarter of 2008.

Oil and gas segment earnings were $10.312 billion for the nine months of 2008, compared with $5.496 billion for the same period of 2007. Oil and gas core results were $4.908 billion for the nine months of 2007 after excluding a $412 million gain from the sale of Occidental's Russian joint venture interests, a $35 million gain from the sale of other oil and gas interests, $112 million income from the resolution of certain legal disputes and a $29 million gain from the sale of exploration properties, net of impairments. The $5.4 billion increase in the 2008 core results from $4.9 billion in 2007 reflected $5.5 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 nine months was 594,000 BOE per day for 2008, compared with 563,000 BOE per day for the same 2007 period. The 5.5 percent increase was largely the result of 44,000 BOE per day higher production from the Dolphin project, partially offset by 5,000 BOE per day lower production in Libya resulting from the new contract.

Oxy's realized price for worldwide crude oil was $100.39 per barrel for the nine months of 2008, compared with $59.47 per barrel for the nine months of 2007. Domestic realized gas prices increased from $6.45 per MCF in the nine months of 2007 to $9.18 per MCF in the nine months of 2008.
 

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