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| OXY > SEC Filings for OXY > Form 8-K on 23-Apr-2009 | All Recent SEC Filings |
23-Apr-2009
Results of Operations and Financial Condition, Other Events, Finan
On April 23, 2009, Occidental Petroleum Corporation released information regarding its results of operations for the three months ended March 31, 2009. 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 are attached to this report as Exhibit 99.5.
On April 23, 2009, Occidental Petroleum Corporation announced that its net income for the first quarter of 2009 was $368 million ($0.45 per diluted share). Results for the quarter were impacted by certain non-core charges. Core results for the first quarter of 2009 were $407 million ($0.50 per diluted share).
Oil and Gas
Oil and gas segment earnings were $545 million for the first quarter of 2009. After excluding rig termination costs of $8 million, the first quarter 2009 core results were $553 million, compared with $2.9 billion for the same period in 2008. The $2.3 billion decrease in the first quarter 2009 results reflected lower crude oil and natural gas prices and higher DD&A rates.
For the first quarter of 2009, daily oil and gas sales volumes averaged 654,000 barrels of oil equivalent (BOE), compared with 607,000 BOE per day in the first quarter of 2008. Volume increases were 22,000 BOE per day in domestic operations, largely in the Rockies and California, 15,000 BOE per day in Oman, and 10,000 BOE per day in Argentina.
Oxy's realized price for worldwide crude oil was $39.29 per barrel for the first quarter of 2009, compared with $86.75 per barrel for the first quarter of 2008. Domestic realized gas prices decreased from $8.15 per thousand cubic feet (MCF) in the first quarter of 2008 to $3.54 per MCF for the first quarter of 2009.
Oil and gas cash production costs, including taxes - other than on income, declined from $14.75 per BOE for the total year 2008 to $12.19 per BOE for the first quarter of 2009.
Chemical segment earnings for the first quarter of 2009 were $169 million, compared with $179 million for the same period in 2008. The first quarter of 2009 results reflect higher caustic soda margins, offset by lower volumes in chlorine, caustic soda and polyvinyl chloride.
Midstream segment earnings were $14 million for the first quarter of 2009, compared with $123 million for the first quarter of 2008. The earnings decline for the first quarter of 2009 reflects significantly lower NGL prices in the gas processing business and negative mark to market adjustments in crude oil marketing.
Statements in this report that contain words such as "will," "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; not successfully completing (or any material delay in) any expansions, field development, capital projects, acquisitions, or dispositions; higher-than-expected costs; political risk; exploration risks, such as drilling of unsuccessful wells; 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.
SUMMARY OF SEGMENT NET SALES AND EARNINGS
(In millions, except First Quarter
per-share amounts) 2009 2008
SEGMENT NET SALES
Oil and Gas $ 2,137 $ 4,518
Chemical 792 1,267
Midstream, Marketing and Other 228 405
Eliminations (84 ) (170 )
Net sales $ 3,073 $ 6,020
SEGMENT EARNINGS
Oil and Gas (a), (b) $ 545 $ 2,888
Chemical 169 179
Midstream, Marketing and Other 14 123
728 3,190
Unallocated Corporate Items
Interest expense, net (20 ) -
Income taxes (241 ) (1,294 )
Other (c) (96 ) (77 )
Income from Continuing Operations (a) 371 1,819
Discontinued operations, net (3 ) 27
NET INCOME (a) $ 368 $ 1,846
BASIC EARNINGS PER COMMON SHARE
Income from continuing operations $ 0.45 $ 2.21
Discontinued operations, net - 0.03
$ 0.45 $ 2.24
DILUTED EARNINGS PER COMMON SHARE (d)
Income from continuing operations $ 0.45 $ 2.19
Discontinued operations, net - 0.03
$ 0.45 $ 2.22
AVERAGE BASIC COMMON SHARES OUTSTANDING (d)
BASIC 811.8 825.5
DILUTED 814.4 829.8
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See footnotes on following page.
(a) Net Income - Net income and income from continuing operations represent amounts attributable to Common Stock, after deducting non-controlling interest of $9 million and $29 million for the first quarter 2009 and 2008, respectively. Oil and gas segment earnings are also presented net of these non-controlling interest amounts.
(b) Oil and Gas - The first quarter of 2009 includes an $8 million pretax charge for the terminations of rig contracts.
(c) Unallocated Corporate Item - Other - The first quarter of 2009 includes a pretax charge of $32 million of severance accruals and $15 million for railcar leases.
(d) Earnings Per Share - The 2008 earnings per share amounts reflect the adoption on January 1, 2009 of FSP No. EITF 03-06-1 dealing with participating securities.
SUMMARY OF CAPITAL EXPENDITURES AND DD&A EXPENSE
First Quarter
($ millions) 2009 2008
CAPITAL EXPENDITURES $ 1,071 $ 833
DEPRECIATION, DEPLETION AND
AMORTIZATION OF ASSETS $ 786 $ 653
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ITEMS AFFECTING COMPARABILITY OF CORE EARNINGS BETWEEN PERIODS
Income/(Expense) First Quarter ($ millions) 2009 2008 FOREIGN EXCHANGE GAINS AND (LOSSES)* $ 37 $ (1 )
*Amounts shown after tax.
SUMMARY OF OPERATING STATISTICS
First Quarter
2009 2008
NET OIL, GAS AND LIQUIDS
SALES VOLUMES PER DAY
United States
Crude Oil and Liquids (MBBL)
California 97 87
Permian 169 170
Mid-Continent and Rockies 10 4
Total 276 261
Natural Gas (MMCF)
California 216 245
Permian 194 177
Mid-Continent and Rockies 210 158
Total 620 580
Latin America
Crude Oil (MBBL)
Argentina 45 37
Colombia 47 42
Total 92 79
Natural Gas (MMCF)
Argentina 33 22
Bolivia 15 21
Total 48 43
Middle East/North Africa
Crude Oil and Liquids (MBBL)
Oman 35 20
Dolphin 20 22
Qatar 47 46
Yemen 31 25
Libya 5 17
Total 138 130
Natural Gas (MMCF)
Oman 24 23
Dolphin 205 200
Total 229 223
Barrels of Oil Equivalent (MBOE)
Subtotal consolidated subsidiaries 656 611
Colombia non-controlled interest (6 ) (6 )
Yemen-Occidental net interest 4 2
Total Worldwide Sales Volumes (MBOE) 654 607
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SUMMARY OF OPERATING STATISTICS - PRODUCTION
First Quarter
2009 2008
NET OIL, GAS AND LIQUIDS
PRODUCTION PER DAY
United States
Crude Oil and Liquids (MBBL) 276 261
Natural Gas (MMCF) 620 580
Latin America
Crude Oil (MBBL)
Argentina 39 36
Colombia 48 42
Total 87 78
Natural Gas (MMCF) 48 43
Middle East/North Africa
Crude Oil and Liquids (MBBL)
Oman 34 20
Dolphin 21 22
Qatar 51 46
Yemen 28 25
Libya 8 22
Total 142 135
Natural Gas (MMCF) 229 223
Barrels of Oil Equivalent (MBOE)
Subtotal consolidated subsidiaries 655 615
Colombia non-controlled interest (6 ) (6 )
Yemen-Occidental net interest 3 2
Total Worldwide Production - (MBOE) 652 611
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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.
SIGNIFICANT TRANSACTIONS AND EVENTS AFFECTING EARNINGS (continued)
First Quarter
($ millions, except Diluted Diluted
per-share amounts) 2009 EPS 2008 EPS
TOTAL REPORTED EARNINGS * $ 368 $ 0.45 $ 1,846 $ 2.22
Oil and Gas
Segment Earnings* $ 545 $ 2,888
Add:
Rig terminations 8 -
Segment Core Results 553 2,888
Chemicals
Segment Earnings 169 179
Add:
No significant items affecting earnings - -
Segment Core Results 169 179
Midstream, marketing and other
Segment Earnings 14 123
Add:
No significant items affecting earnings - -
Segment Core Results 14 123
Total Segment Core Results 736 3,190
Corporate
Corporate Results - Non Segment** (360 ) (1,344 )
Add:
Severance accrual 32 -
Railcar leases 15 -
Tax effect of pre-tax adjustments (19 ) -
Discontinued operations, net*** 3 (27 )
Corporate Core Results - Non Segment (329 ) (1,371 )
TOTAL CORE RESULTS $ 407 $ 0.50 $ 1,819 $ 2.19
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* Represents amounts attributable to common stock, after deducting non-controlling interest of $9 million and $29 million for the first quarter 2009 and 2008, respectively. ** Interest expense, income taxes, G&A expense and other, and non-core items. *** Amounts shown after tax.
(d) Exhibits
99.1 Press release dated April 23, 2009.
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.
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