form8k-20100429.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 29, 2010

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 29, 2010, Occidental Petroleum Corporation released information regarding its results of operations for the three months ended March 31, 2010.  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 speeches given by Dr. Ray R. Irani and Stephen I. Chazen are 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.


Section 8 – Other Events

Item 8.01.  Other Events

On January 28, 2010, Occidental Petroleum Corporation announced income from continuing operations of $1.1 billion ($1.32 per diluted share) for the first quarter of 2010, compared with $371 million ($0.45 per diluted share) for the first quarter of 2009.

QUARTERLY RESULTS

Oil and Gas

Oil and gas segment earnings were $1.8 billion for the first quarter of 2010, compared with $545 million for the same period in 2009.  The increase in the first quarter of 2010 results was due to higher crude oil and natural gas prices and higher volumes.

For the first quarter of 2010, daily oil and gas sales volumes averaged 726,000 barrels of oil equivalent (BOE), compared with 713,000 BOE in the first quarter of 2009.  Volumes increased in the Middle East/North Africa and California and were partially offset by decreases in 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.  Latin America volumes dropped in Argentina due to a labor strike.  Production was negatively impacted in the Middle East/North Africa, Long Beach and Colombia due to higher oil prices affecting our production sharing and similar contracts by 38,000 BOE per day.  Underlying daily production volumes were 743,000 BOE in the first quarter of 2010 compared to 711,000 BOE in the first quarter of 2009, largely reflecting the Bahrain production.

Oxy's realized price for worldwide crude oil was $71.88 per barrel for the first quarter of 2010, compared with $39.29 per barrel for the first quarter of 2009.  Domestic realized gas prices rose from $3.54 per MCF in the first quarter of 2009 to $5.62 per MCF for the first quarter of 2010.

Chemicals

Chemical segment earnings for the first quarter of 2010 were $30 million, compared with $169 million for the same period in 2009.  The first quarter 2010 results reflect the continued weakness in the domestic market, particularly in the housing and construction sectors, and the significant margin erosion that was experienced through 2009 that carried into 2010.

 
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Midstream, Marketing and Other

Midstream segment earnings were $94 million for the first quarter of 2010, compared with $14 million for the first quarter of 2009.  Earnings for the first quarter of 2010 reflect higher margins in the marketing and trading businesses, improved prices in the gas processing business, and higher pipeline income from Dolphin.

Forward-Looking Statements

Statements in this report that contain words such as “will," “should,” “expect,” or “estimate,” or otherwise relate to the future, are forward-looking and involve risks and uncertainties that could significantly affect expected results.  Factors that could cause actual results to differ materially include, but are not limited to: global commodity price fluctuations and supply/demand considerations for oil, gas and chemicals; exploration risks, such as drilling of unsuccessful wells; not successfully completing any expansions, field development, capital projects, acquisitions, or dispositions; higher-than-expected costs; political risk; operational interruptions; and changes in tax rates.  You should not place undue reliance on these forward-looking statements which speak only as of the date of this 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.  U.S. investors are urged to consider carefully the disclosures in our 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.
 
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Attachment 1

SUMMARY OF SEGMENT NET SALES AND EARNINGS

   
First Quarter
($ millions, except per-share amounts)
  
2010
  
2009
SEGMENT NET SALES
                
Oil and Gas
  
$
3,646
    
$
2,137
  
Chemical
    
956
      
792
  
Midstream, Marketing and Other
    
369
      
228
  
Eliminations
    
(200
)
    
(84
)
                 
Net Sales
  
$
4,771
    
$
3,073
  
                 
SEGMENT EARNINGS
                
Oil and Gas (a)
  
$
1,819
    
$
545
  
Chemical
    
30
      
169
  
Midstream, Marketing and Other
    
94
      
14
  
     
1,943
      
728
  
                 
Unallocated Corporate Items
                
Interest expense, net
    
(36
)
    
(20
)
Income taxes
    
(729
)
    
(241
)
Other (b)
    
(107
)
    
(96
)
                 
Income from Continuing Operations (a)
    
1,071
      
371
  
Discontinued operations, net
    
(7
)
    
(3
)
                 
NET INCOME (a)
  
$
1,064
    
$
368
  
                 
BASIC EARNINGS PER COMMON SHARE
                
Income from continuing operations
  
$
1.32
    
$
0.45
  
Discontinued operations, net
    
(0.01
)
    
-
  
   
$
1.31
    
$
0.45
  
                 
DILUTED EARNINGS PER COMMON SHARE
                
Income from continuing operations
  
$
1.32
    
$
0.45
  
Discontinued operations, net
    
(0.01
)
    
-
  
   
$
1.31
    
$
0.45
  
AVERAGE BASIC COMMON SHARES
                
OUTSTANDING
                
BASIC
    
812.1
      
810.7
  
DILUTED
    
813.5
      
813.3
  

(a) Net Income - Net income and income from continuing operations represent amounts attributable to Common Stock, after deducting non-controlling interest of $24 million and $9 million for the first quarter of 2010 and 2009, respectively.  Oil and gas segment earnings are presented net of these non-controlling interest amounts.

(b) Unallocated Corporate Items - Other - The first quarter of 2009 includes pre-tax charges of $32 million related to severance and $15 million for railcar leases.
 
3
 
 

Attachment 2


SUMMARY OF CAPITAL EXPENDITURES AND DD&A EXPENSE

   
First Quarter
($ millions)
  
2010
  
2009
CAPITAL EXPENDITURES
  
$
848
    
$
1,071
  
                 
DEPRECIATION, DEPLETION AND
                
AMORTIZATION OF ASSETS
  
$
874
    
$
786
  




ITEMS AFFECTING COMPARABILITY OF CORE EARNINGS
BETWEEN PERIODS

Income / (Expense)
  
First Quarter
($ millions)
  
2010
  
2009
                 
Foreign exchange gains and (losses) *
  
$
(5
)
  
$
37
  

* Amounts shown after tax.
 
4
 
 

Attachment 3


SUMMARY OF OPERATING STATISTICS - SALES
 
   
First Quarter
   
2010
  
2009
NET OIL, GAS AND LIQUIDS SALES PER DAY
            
United States
            
Crude Oil and Liquids (MBBL)
            
California
  
94
    
97
  
Permian
  
160
    
166
  
Midcontinent Gas
  
17
    
13
  
Total
  
271
    
276
  
             
Natural Gas (MMCF)
            
California
  
295
    
216
  
Permian
  
125
    
124
  
Midcontinent Gas
  
255
    
280
  
Total
  
675
    
620
  
             
Latin America
            
Crude Oil (MBBL)
            
Argentina
  
36
    
45
  
Colombia
  
33
    
41
  
Total
  
69
    
86
  
             
Natural Gas (MMCF)
            
Argentina
  
31
    
33
  
Bolivia
  
12
    
15
  
Total
  
43
    
48
  
             
Middle East / North Africa
            
Crude Oil and Liquids (MBBL)
            
Bahrain
  
2
    
-
  
Dolphin
  
23
    
23
  
Libya
  
4
    
6
  
Oman
  
56
    
46
  
Qatar
  
74
    
75
  
Yemen
  
33
    
42
  
Total
  
192
    
192
  
             
Natural Gas (MMCF)
            
Bahrain
  
166
    
-
  
Dolphin
  
228
    
233
  
Oman
  
52
    
53
  
Total
  
446
    
286
  
             
Barrels of Oil Equivalent (MBOE)
            
             
Total  Sales - MBOE
  
726
    
713
  

 
5
 
 

Attachment 4

SUMMARY OF OPERATING STATISTICS - PRODUCTION

   
First Quarter
   
2010
  
2009
NET OIL, GAS AND LIQUIDS PRODUCTION
            
PER DAY
            
United States
            
Crude Oil and Liquids (MBBL)
  
271
    
276
  
Natural Gas (MMCF)
  
675
    
620
  
             
Latin America
            
Crude Oil (MBBL)
            
Argentina
  
37
    
39
  
Colombia
  
34
    
42
  
Total
  
71
    
81
  
             
Natural Gas (MMCF)
  
43
    
48
  
             
Middle East / North Africa
            
Crude Oil and Liquids (MBBL)
            
Bahrain
  
3
    
-
  
Dolphin
  
23
    
24
  
Libya
  
14
    
9
  
Oman
  
57
    
45
  
Qatar
  
75
    
79
  
Yemen
  
35
    
38
  
Total
  
207
    
195
  
             
Natural Gas (MMCF)
  
446
    
286
  
             
Barrels of Oil Equivalent (MBOE)
            
             
Total Worldwide Production - MBOE
  
743
    
711
  


 
6
 
 

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)
  
2010
  
Diluted EPS
  
2009
  
Diluted EPS
TOTAL REPORTED EARNINGS
  
$
1,064
    
$
1.31
    
$
368
    
$
0.45
  
                                 
Oil and Gas
                                
Segment Earnings
  
$
1,819
            
$
545
          
Add:
                                
Rig contract terminations
    
-
              
8
          
                                 
Segment Core Results
    
1,819
              
553
          
                                 
Chemicals
                                
Segment Earnings
    
30
              
169
          
Add:
                                
No significant items affecting earnings
    
-
              
-
          
                                 
Segment Core Results
    
30
              
169
          
                                 
Midstream, Marketing and Other
                                
Segment Earnings
    
94
              
14
          
Add:
                                
No significant items affecting earnings
    
-
              
-
          
                                 
Segment Core Results
    
94
              
14
          
                                 
Total Segment Core Results
    
1,943
              
736
          
                                 
Corporate
                                
Corporate Results --
                                
Non Segment *
    
(879
)
            
(360
)
        
Add:
                                
Severance accrual
    
-
              
32
          
Railcar leases
    
-
              
15
          
Tax effect of pre-tax adjustments
    
-
              
(19
)
        
Discontinued operations, net **
    
7
              
3
          
                                 
Corporate Core Results - Non Segment
    
(872
)
            
(329
)
        
                                 
TOTAL CORE RESULTS
  
$
1,071
    
$
1.32
    
$
407
    
$
0.50
  

*
  
Interest expense, income taxes, G&A expense and other.
**
  
Amounts shown after tax.
 
 
7
 
 
 
Section 9 - Financial Statements and Exhibits

Item 9.01.  Financial Statements and Exhibits

(d)      Exhibits

99.1
  
Press release dated April 29, 2010.
     
99.2
  
Full text of speeches given by Dr. Ray R. Irani and 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.
 
 
8
 
 

 
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 29, 2010
/s/ ROY PINECI
  
 
Roy Pineci, Vice President, Controller
  
 
and Principal Accounting Officer
  
     
     
     
     
     
     
 
 
9
 
 

EXHIBIT INDEX


99.1
  
Press release dated April 29, 2010.
     
99.2
  
Full text of speeches given by Dr. Ray R. Irani and 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.