Oxy Boasts Highest Ever Production Volume

Occidental reported net income of $938 million ($1.15 per diluted share) for the fourth quarter of 2009, compared with $443 million ($0.55 per diluted share) for the fourth quarter of 2008. Core results for the fourth quarter of 2009 were $1.1 billion ($1.30 per diluted share), compared with $957 million ($1.18 per diluted share) for the fourth quarter of 2008. Core results excluded after-tax charges of $120 million ($0.15 per diluted share) for 2009 and $514 million ($0.63 per diluted share) for 2008.

Net income for the twelve months of 2009 was $2.9 billion ($3.58 per diluted share), compared with $6.9 billion ($8.34 per diluted share) for the twelve months of 2008. Full year core results were $3.1 billion ($3.78 per diluted share) for 2009, compared with $7.3 billion ($8.94 per diluted share) for 2008.

In announcing the results, Dr. Ray R. Irani, Chairman and Chief Executive Officer, said, "I am pleased to announce Occidental's production for the twelve months ended December 31, 2009 was 645,000 BOE per day, the highest annual volume in the Company's history. Occidental achieved year-over-year growth of over seven percent for the twelve months of 2009. We expect the 2010 production to increase by 5 percent to 8 percent.

"The year 2009 experienced volatile commodity prices with WTI beginning the year in the low $40 per barrel range and ending the year above $75 per barrel. Occidental reacted to the lower prices by reducing costs in key areas and managing our capital program. We successfully reduced our oil and gas cash production costs, excluding production and property taxes, by 15 percent."

Quarterly Results

Oil and Gas

Oil and gas segment earnings were $1.6 billion for the fourth quarter of 2009, compared with $339 million for the same period in 2008. The fourth quarter of 2009 core results were $1.8 billion, excluding a pre-tax loss of $170 million related to impairment of assets. The 2008 core results were $1 billion, excluding pre-tax losses of $657 million relating to the impairment of assets and other items. The $800 million increase in the fourth quarter of 2009 core results was primarily due to higher crude oil prices and sales volumes and lower operating costs.

For the fourth quarter of 2009, daily oil and gas sales volumes averaged 650,000 barrels of oil equivalent (BOE), compared with 620,000 BOE per day in the fourth quarter of 2008, a year-over-year increase of nearly five percent. Volumes increased by 14 percent in the Middle East/North Africa, and two percent each in the United States and Latin America. The Middle East/North Africa increase included new production from the Bahrain start-up and increased production from the Mukhaizna field in Oman.

Oxy's realized price for worldwide crude oil was $69.39 per barrel for the fourth quarter of 2009, compared with $53.52 per barrel for the fourth quarter of 2008. Domestic realized gas prices dropped from $4.67 per MCF in the fourth quarter of 2008 to $4.37 per MCF for the fourth quarter of 2009.

Twelve-Month Results

Oil and Gas

Oil and gas segment earnings were $4.7 billion for the twelve months of 2009, compared with $10.7 billion for the same period of 2008. Oil and gas core results, after excluding impairments and rig termination costs, were $4.9 billion for the twelve months of 2009, compared to $11.3 billion for the twelve months of 2008. The $6.4 billion decrease in the 2009 core results reflected lower crude oil and natural gas prices, partially offset by increased oil and gas production and lower operating costs.

Daily oil and gas sales volumes for the year were 645,000 BOE per day for 2009, compared with 601,000 BOE per day for the 2008 period, a year-over-year increase of seven percent. Volumes increased 4 percent domestically, mainly in California and Midcontinent Gas, by 10 percent in Latin America, and 13 percent in the Middle East/North Africa. The increase in the Middle East/North Africa resulted from higher production in the Mukhaizna field in Oman and higher volumes resulting from lower year-over-year average oil prices affecting our production sharing contracts.

Oxy's realized price for worldwide crude oil was $55.97 per barrel for the twelve months of 2009, compared with $88.26 per barrel for the twelve months of 2008. Domestic realized gas prices decreased from $8.03 per MCF in the twelve months of 2008 to $3.46 per MCF in the twelve months of 2009.

 

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