form8k-20110428.htm
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) April 28, 2011

OCCIDENTAL PETROLEUM CORPORATION
(Exact name of registrant as specified in its charter)

Delaware
1-9210
95-4035997
(State or other jurisdiction
(Commission
(I.R.S. Employer
of incorporation)
File Number)
Identification No.)

10889 Wilshire Boulevard
    
Los Angeles, California
  
90024
(Address of principal executive offices)
  
(ZIP code)

Registrant’s telephone number, including area code:
(310) 208-8800

 
Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions (see General Instruction A.2. below):

[  ]  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[  ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[  ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[  ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 
 
 
 
 
Section 2 – Financial Information

Item 2.02.  Results of Operations and Financial Condition

On April 28, 2011, Occidental Petroleum Corporation released information regarding its results of operations for the three months ended March 31, 2011.  The exhibits to this Form 8-K and the information set forth in this Item 2.02 are being furnished pursuant to Item 2.02, Results of Operations and Financial Condition.  The full text of the press release is attached to this report as Exhibit 99.1.  The full text of the speech given by Stephen I. Chazen is attached to this report as Exhibit 99.2.  Investor Relations Supplemental Schedules are attached to this report as Exhibit 99.3.  Earnings Conference Call Slides are attached to this report as Exhibit 99.4.  Forward-Looking Statements Disclosure for Earnings Release Presentation Materials is attached to this report as Exhibit 99.5.  The information in this Item 2.02 and Exhibits 99.1 through 99.5, inclusive, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.


Section 8 – Other Events

Item 8.01.  Other Events

On April 28, 2011, Occidental Petroleum Corporation announced core income of $1.6 billion ($1.96 per diluted share) for the first quarter of 2011, compared with $1.1 billion ($1.35 per diluted share) for the first quarter of 2010.  Net income for the first quarter of 2011 was $1.5 billion ($1.90 per diluted share), compared with $1.1 billion ($1.31 per diluted share) for the first quarter of 2010.

QUARTERLY RESULTS

Oil and Gas

Oil and gas segment earnings were $2.5 billion for the first quarter of 2011, compared with $1.9 billion for the same period in 2010.  The increase in the first quarter of 2011 results was due to higher crude oil prices and higher sales volumes in the Middle East, partially offset by higher operating costs and DD&A rates.

For the first quarter of 2011, daily oil and gas production volumes averaged 730,000 barrels of oil equivalent (BOE), compared with 701,000 BOE in the first quarter of 2010.  Volumes increased over 4 percent, primarily in domestic gas and NGL production and Middle East/North Africa crude oil volumes.  The domestic gas increase was from the new acquisition in South Texas, which closed in the first quarter of 2011.  The Middle East/North Africa increase included new production from Iraq and higher volumes from the Mukhaizna field in Oman.

As a result of higher year-over-year average oil prices affecting production sharing and similar contracts, production was negatively impacted in the Middle East/North Africa, Long Beach and Colombia by 12,000 BOE per day.  Dolphin and Elk Hills volumes were also lower from planned maintenance and production shut-downs in the first quarter of 2011.

Daily sales volumes increased over 6 percent from 685,000 BOE per day in the first quarter of 2010 to 728,000 BOE per day in the first quarter of 2011.
 
 
 
 
Oxy's realized price for worldwide crude oil was $92.14 per barrel for the first quarter of 2011, compared with $74.09 per barrel for the first quarter of 2010.  Worldwide realized NGL prices rose from $47.48 per barrel in the first quarter of 2010 to $52.64 per barrel in the first quarter of 2011.  Domestic realized gas prices dropped from $5.62 per Mcf in the first quarter of 2010 to $4.21 per Mcf for the first quarter of 2011.

Chemicals

Chemical segment earnings for the first quarter 2011 were $219 million, compared with $30 million for the same period in 2010.  The first quarter of 2011 results reflect strong export sales, higher margins resulting from improved supply/demand balances across most products, including calcium chloride, and lower energy costs.

Midstream, Marketing and Other

Midstream segment earnings were $114 million for the first quarter of 2011, compared with $94 million for the first quarter of 2010.  Earnings for the first quarter of 2011 reflect increased income from the pipeline business, higher margins in the marketing and trading business, partially offset by lower margins in the gas processing business.

Forward-Looking Statements

Portions of this report contain forward-looking statements and involve risks and uncertainties that could materially affect expected results of operations, liquidity, cash flows and business prospects.  Factors that could cause results to differ materially include, but are not limited to: global commodity pricing fluctuations; international political conditions; supply and demand considerations for Occidental’s products; not successfully completing, or any material delay of, any development of new fields, expansion projects, capital expenditures, efficiency-improvement projects, acquisitions or dispositions; potential failure to achieve expected production from existing and future oil and gas development projects or acquisitions; exploration risks such as drilling unsuccessful wells; any general economic recession or slowdown domestically or internationally; higher-than-expected costs; potential liability for remedial actions under existing or future environmental regulations and litigation; potential liability resulting from pending or future litigation; general domestic and international political conditions; potential disruption or interruption of Occidental’s production or manufacturing or damage to facilities due to accidents, chemical releases, labor unrest, weather, natural disasters, political events or insurgent activity; failure of risk management; changes in laws or regulations; or changes in tax rates.  Words such as “estimate,” “project,” “predict,” “will,” “would,” “should,” “could,” “may,” “might,” “anticipate,” “plan,” “intend,” “believe,” “expect,” “aim,” “goal,” “target,” “objective,” “likely” or similar expressions that convey the uncertainty of future events or outcomes generally indicate forward-looking statements.  You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release.  Unless legally required, Occidental does not undertake any obligation to update any forward-looking statements, as a result of new information, future events or otherwise.  Material risks that may affect Occidental’s results of operations and financial position appear in Part 1, Item 1A “Risk Factors” of the 2010 Form 10-K, available through the following toll-free telephone number, 1-888-OXYPETE (1-888-699-7383) or on the Internet at http://www.oxy.com.  You also can obtain a copy from the SEC by calling 1-800-SEC-0330.

 
 
 
 
 

                     
Attachment 1
                                 
SUMMARY OF SEGMENT NET SALES AND EARNINGS
                                 
   
First Quarter
                
($ millions, except per-share amounts)
  
2011
  
2010
                
SEGMENT NET SALES
                                
Oil and Gas
  
$
4,367
    
$
3,491
                  
Chemical
    
1,165
      
956
                  
Midstream, Marketing and Other
    
412
      
369
                  
Eliminations
    
(218
)
    
(200
)
                
                                 
Net Sales
  
$
5,726
    
$
4,616
                  
                                 
SEGMENT EARNINGS
                                
Oil and Gas (a), (b)
  
$
2,468
    
$
1,861
                  
Chemical
    
219
      
30
                  
Midstream, Marketing and Other
    
114
      
94
                  
     
2,801
      
1,985
                  
                                 
Unallocated Corporate Items
                                
Interest expense, net (c)
    
(214
)
    
(35
)
                
Income taxes (d)
    
(1,054
)
    
(746
)
                
Other
    
(128
)
    
(107
)
                
                                 
Income from Continuing Operations (a)
    
1,405
      
1,097
                  
Discontinued operations, net (e)
    
144
      
(33
)
                
                                 
NET INCOME (a)
  
$
1,549
    
$
1,064
                  
                                 
BASIC EARNINGS PER COMMON SHARE                                
Income from continuing operations
  
$
1.72
    
$
1.35
                  
Discontinued operations, net
    
0.18
      
(0.04
)
                
   
$
1.90
    
$
1.31
                  
                                 
DILUTED EARNINGS PER COMMON SHARE                                
Income from continuing operations
  
$
1.72
    
$
1.35
                  
Discontinued operations, net
    
0.18
      
(0.04
)
                
   
$
1.90
    
$
1.31
                  
AVERAGE BASIC COMMON SHARES OUTSTANDING                                
BASIC
    
812.6
      
812.1
                  
DILUTED
    
813.4
      
813.5
                  
                                 
(a) Net Income - Represent amounts attributable to Common Stock, after deducting non-controlling interest of $24 million for the first quarter of 2010.
(b) Oil and Gas - The first quarter of 2011 includes pre-tax charges of $35 million related to exploration write-offs in Libya and $29 million related to Colombia net worth tax.   Also, included in the 2011 first quarter results is a pre-tax gain for sale of an interest in the Colombia pipeline of $22 million.
(c) Unallocated Corporate Items - Interest Expense, net - The first quarter of 2011 includes a pre-tax charge of  $163 million related to the premium on debt extinguishment.
(d) Unallocated Corporate Items - Taxes - The first quarter of 2011 includes a net $21 million charge for out of period state income taxes.
(e) Discontinued Operations, net - The first quarter of 2011 includes a $144 million after-tax gain from the sale of the Argentina operations.

 
 
 
 
 
                         
Attachment 2
                                 
SUMMARY OF CAPITAL EXPENDITURES AND DD&A EXPENSE
                                 
   
First Quarter
                
($ millions)
  
2011
  
2010
                
CAPITAL EXPENDITURES
  
$
1,325
    
$
768
                  
                                 
DEPRECIATION, DEPLETION AND
                                
AMORTIZATION OF ASSETS
  
$
890
    
$
763
                  

 
 
 
 

                         
Attachment 3
                                 
SUMMARY OF OPERATING STATISTICS - PRODUCTION
                                 
   
First Quarter
                
   
2011
  
2010
                
NET OIL, GAS AND LIQUIDS PRODUCTION PER DAY                                
United States
                                
Crude Oil (MBBL)
                                
California
    
77
      
77
                  
Permian
    
132
      
137
                  
Midcontinent and other
    
13
      
7
                  
Total
    
222
      
221
                  
                                 
NGL (MBBL)
                                
California
    
14
      
17
                  
Permian
    
37
      
27
                  
Midcontinent and other
    
8
      
6
                  
Total
    
59
      
50
                  
                                 
Natural Gas (MMCF)
                                
California
    
242
      
295
                  
Permian
    
165
      
198
                  
Midcontinent and other
    
327
      
182
                  
Total
    
734
      
675
                  
                                 
Latin America
                                
Crude Oil  (MBBL)
                                
Colombia
    
31
      
34
                  
                                 
Natural Gas (MMCF)
                                
Bolivia
    
16
      
12
                  
                                 
Middle East / North Africa
                                
Crude Oil (MBBL)
                                
Bahrain
    
4
      
3
                  
Dolphin
    
9
      
11
                  
Iraq
    
9
      
-
                  
Libya
    
15
      
13
                  
Oman
    
67
      
57
                  
Qatar
    
75
      
75
                  
Yemen
    
33
      
35
                  
Total
    
212
      
194
                  
                                 
NGL (MBBL)
                                
Dolphin
    
10
      
12
                  
Libya
    
1
      
1
                  
Total
    
11
      
13
                  
                                 
Natural Gas (MMCF)
                                
Bahrain
    
173
      
166
                  
Dolphin
    
196
      
228
                  
Oman
    
50
      
52
                  
Total
    
419
      
446
                  
                                 
                                 
Barrels of Oil Equivalent (MBOE)
    
730
      
701
                  

 
 
 
 

                         
Attachment 4
                                 
SUMMARY OF OPERATING STATISTICS - SALES
                                 
   
First Quarter
                
   
2011
  
2010
                
NET OIL, GAS AND LIQUIDS SALES PER DAY                                
                                 
United States
                                
Crude Oil (MBBL)
    
222
      
221
                  
NGL (MBBL)
    
59
      
50
                  
Natural Gas (MMCF)
    
734
      
675
                  
                                 
Latin America
                                
Crude Oil (MBBL)
                                
Colombia
    
33
      
33
                  
                                 
Natural Gas (MMCF)
    
16
      
12
                  
                                 
Middle East / North Africa
                                
Crude Oil (MBBL)
                                
Bahrain
    
4
      
2
                  
Dolphin
    
9
      
11
                  
Iraq
    
-
      
-
                  
Libya
    
15
      
4
                  
Oman
    
71
      
56
                  
Qatar
    
76
      
74
                  
Yemen
    
34
      
33
                  
Total
    
209
      
180
                  
                                 
NGL (MBBL)
                                
Dolphin
    
10
      
12
                  
                                 
Natural Gas (MMCF)
    
419
      
446
                  
                                 
                                 
Barrels of Oil Equivalent (MBOE)
    
728
      
685
                  

 
 
 
 


                         
Attachment 5
                                 
SIGNIFICANT TRANSACTIONS AND EVENTS AFFECTING EARNINGS
                                 
Occidental's results of operations often include the effects of significant transactions and events affecting earnings that vary widely and unpredictably in nature, timing and amount. Therefore, management uses a measure called "core results," which excludes those items. This non-GAAP measure is not meant to disassociate those items from management's performance, but rather is meant to provide useful information to investors interested in comparing Occidental's earnings performance between periods. Reported earnings are considered representative of management's performance over the long term. Core results is not considered to be an alternative to operating income in accordance with generally accepted accounting principles.
                                 
   
First Quarter
($ millions, except per-share amounts)
  
2011
  
Diluted
EPS
  
2010
  
Diluted
EPS
TOTAL REPORTED EARNINGS
  
$
1,549
    
$
1.90
    
$
1,064
    
$
1.31
  
                                 
Oil and Gas
                                
Segment Earnings
  
$
2,468
            
$
1,861
          
Add:
                                
Libya exploration write-off
    
35
              
-
          
Gain on sale of Colombia pipeline interest
    
(22
)
            
-
          
Foreign tax
    
29
              
-
          
                                 
Segment Core Results
    
2,510
              
1,861
          
                                 
Chemicals
                                
Segment Earnings
    
219
              
30
          
Add:
                                
No significant items affecting earnings
    
-
              
-
          
                                 
Segment Core Results
    
219
              
30
          
                                 
Midstream, Marketing and Other
                                
Segment Earnings
    
114
              
94
          
Add:
                                
No significant items affecting earnings
    
-
              
-
          
                                 
Segment Core Results
    
114
              
94
          
                                 
Total Segment Core Results
    
2,843
              
1,985
          
                                 
Corporate
                                
Corporate Results --
                                
Non Segment *
    
(1,252
)
            
(921
)
        
Add:
                                
Premium on debt extinguishments
    
163
              
-
          
State income tax charge
    
33
              
-
          
Tax effect of adjustments
    
(50
)
            
-
          
Discontinued operations, net **
    
(144
)
            
33
          
                                 
Corporate Core Results - Non Segment
    
(1,250
)
            
(888
)
        
                                 
TOTAL CORE RESULTS
  
$
1,593
    
$
1.96
    
$
1,097
    
$
1.35
  
                                 
 *  Interest expense, income taxes, G&A expense and other.
** Amounts shown after tax.
 
 
 
 
 
 
Section 9 - Financial Statements and Exhibits

Item 9.01.
Financial Statements and Exhibits
     
(d)
  
Exhibits
     
99.1
  
Press release dated April 28, 2011.
     
99.2
  
Full text of speech given by Stephen I. Chazen.
     
99.3
  
Investor Relations Supplemental Schedules.
     
99.4
  
Earnings Conference Call Slides.
     
99.5
  
Forward-Looking Statements Disclosure for Earnings Release Presentation Materials.
 
 
 
 
 
 


 
 
SIGNATURE


Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


 
OCCIDENTAL PETROLEUM CORPORATION
  
 
(Registrant)
  
     
     
DATE:  April 28, 2011
/s/ ROY PINECI
  
 
Roy Pineci, Vice President, Controller
  
 
and Principal Accounting Officer
  
     
     
     
     
     
     
 
 
 
 
 
 
 
EXHIBIT INDEX


99.1
  
Press release dated April 28, 2011.
     
99.2
  
Full text of speech given by Stephen I. Chazen.
     
99.3
  
Investor Relations Supplemental Schedules.
     
99.4
  
Earnings Conference Call Slides.
     
99.5
  
Forward-Looking Statements Disclosure for Earnings Release Presentation Materials.