Occidental Petroleum Corporatio 8K Occidental Petroleum Announces Third Quarter Earnings | OXY 18 Oct 06

EXHIBIT 99.1

For Immediate Release: October 18, 2006

Occidental Petroleum Announces Third Quarter Earnings

LOS ANGELES -- Occidental Petroleum Corporation (NYSE: OXY) announced core earnings for the third quarter 2006 were $1.159 billion ($1.35 per diluted share), compared with $1.004 billion ($1.22 per diluted share) for the same period in 2005. See the attached schedule for a reconciliation of net income to core earnings.

Net income for the third quarter 2006 was $1.168 billion ($1.36 per diluted share), compared with $1.747 billion ($2.12 per diluted share) for the third quarter 2005.

In announcing the results, Dr. Ray R. Irani, chairman, president and chief executive officer, said, "Our continuing focus on expanding and strengthening operations in our core businesses was a key factor in the 15 percent increase in our core earnings compared to last year's third quarter results. Our success in growing combined oil and gas production by 14 percent compared to the same period a year ago, along with sharply higher crude oil prices and a strong performance from our chemicals business, were key drivers in our financial performance for the quarter. Oil and gas production averaged 587,000 barrels of oil equivalent per day for the quarter and an all-time high for nine months of 596,000 equivalent barrels per day. Strong production growth and robust energy prices helped propel Oil and Gas segment earnings to an historic nine month high. In addition, our Chemical segment's earnings were the highest for any nine month period in more than a decade."

The third quarter 2005 core income of $1.004 billion excludes a $463 million after-tax gain resulting from the sale of an equity investment, a $335 million tax benefit due to the

reversal of tax reserves no longer required and a $98 million after-tax charge from the write-off of certain chemical plants.

QUARTERLY RESULTS

Oil and Gas

Oil and gas segment earnings were $1.877 billion for the third quarter 2006, a 15 percent increase from the $1.638 billion segment earnings for the third quarter 2005. The improvement in the third quarter 2006 earnings reflected a $273 million increase from higher worldwide crude oil prices, a $141 million increase from higher production, partially offset by higher operating expenses, increased DD&A rates, and higher exploration expense.

The average price for West Texas Intermediate crude oil in the third quarter 2006 was $70.53 per barrel compared to $63.19 per barrel in the third quarter 2005. Occidental's realized price for worldwide crude oil was $60.52 per barrel for the third quarter 2006, compared with $55.97 per barrel for the third quarter 2005. The average price for NYMEX gas in the third quarter 2006 was $6.33 per MMCF, compared with $7.09 per MMCF in the third quarter 2005. Domestic realized gas prices decreased from $6.33 per MMCF in the third quarter 2005 to $5.88 per MMCF for the third quarter 2006.

Production

For the third quarter, oil and gas daily production from continuing operations averaged 587,000 barrels of oil equivalent (BOE), a 71,000 BOE increase over the 516,000 equivalent barrels per day produced in the third quarter 2005.

Chemicals

Chemical third quarter 2006 core earnings were $247 million and third quarter 2005 core earnings were $167 million, after excluding charges for write-off of plants and hurricane related insurance charges. See the attached schedule for a

reconciliation of segment earnings to core earnings. The improvement in the third quarter 2006 results was due to increased chlor-alkali volumes and higher margins in all chlorovinyls products. Chemical segment earnings were $247 million for the third quarter 2006, compared with $3 million for the third quarter 2005.

NINE-MONTHS RESULTS

Core earnings were $3.514 billion ($4.07 per diluted share) for the first nine months of 2006, compared with $2.616 billion ($3.20 per diluted share) for the same period in 2005. See the attached schedule for a reconciliation of net income to core earnings.

For the first nine months of 2006, net income was $3.254 billion ($3.77 per diluted share), compared with $4.129 billion ($5.06 per diluted share) for the first nine months of 2005.

Oil and Gas

Oil and gas segment earnings were $5.740 billion for the first nine months of 2006, a 38 percent increase over the $4.172 billion segment earnings for the first nine months of 2005. The improvement in the nine months 2006 earnings was due to record crude oil and higher natural gas prices and higher production, partially offset by higher operating expenses and increased DD&A rates.

The average price for West Texas Intermediate crude oil in the first nine months of 2006 was $68.24 per barrel compared to $55.40 per barrel in the nine months of 2005. Occidental's realized price for worldwide crude oil was $58.41 per barrel for the nine months of 2006, compared with $48.24 per barrel for the same period in 2005. The average price for NYMEX gas in the nine months of 2006 was $8.34 per MMCF, compared with $6.93 per MMCF in the nine months of 2005. Domestic realized gas prices increased from $6.16 per MMCF in the nine months of 2005 to $6.80 per MMCF for the nine months of 2006.

Production

Worldwide daily production from continuing operations for the nine months of 2006 averaged 596,000 BOE, compared with 519,000 BOE for the nine months of 2005. The increase included eight months of Vintage production at 59,000 BOE per day, which added 53,000 BOE per day to Occidental's year-to-date production and a Libyan increase of 18,000 BOE per day, which reflects nine months production in 2006, compared with one month in 2005.

Chemicals

Chemical core earnings for the first nine months of 2006 were $745 million, compared with $606 million for the same period of 2005, after excluding the same charges discussed in the third quarter analysis above. See the attached schedule for a reconciliation of segment earnings to core earnings. The improvement in the nine months 2006 results was due to higher chlor-alkali volumes and higher margins in all chlorovinyl products. Chemical segment earnings were $745 million for the first nine months of 2006, compared with $442 million for the same 2005 period.

Statements in this presentation 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 results to differ materially include, but are not limited to: exploration risks, such as drilling of unsuccessful wells; global commodity pricing fluctuations and supply/demand considerations for oil, gas and chemicals; higher-than-expected costs; political risk; and not successfully completing (or any material delay in) any expansion, capital expenditure, acquisition, or disposition. You should not place undue reliance on these forward-looking statements which speak only as of the date of this presentation. 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 disclosure 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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Contacts:	Lawrence P. Meriage (media)
	310-443-6562
	Christopher G. Stavros (investors)
	212-603-8184
	For further analysis of Occidental's quarterly performance, please visit the web site: www.oxy.com

SUMMARY OF SEGMENT NET SALES AND EARNINGS

	Third Quarter						Nine Months
($ millions, except per-share amounts)	2006			2005			2006			2005
SEGMENT NET SALES
Oil and Gas	$	3,207		$	2,617		$	9,624		$	6,926
Chemical		1,265			1,190			3,779			3,379
Other		50			50			114			110
Net sales	$	4,522		$	3,857		$	13,517		$	10,415
SEGMENT EARNINGS
Oil and Gas	$	1,877		$	1,638		$	5,740		$	4,172
Chemical		247			3			745			442
		2,124			1,641			6,485			4,614
Unallocated Corporate Items
Interest expense, net (a)		(18	)		(70	)		(80	)		(178	)
Income taxes (b)		(885	)		(574	)		(2,672	)		(1,184	)
Other (c)		(62	)		660			(219	)		682

Income from Continuing Operations		1,159			1,657			3,514			3,934
Discontinued operations, net (d)		9			87			(260	)		192
Cumulative effect of accounting changes, net		—			3			—			3
NET INCOME	$	1,168		$	1,747		$	3,524		$	4,129
BASIC EARNINGS PER COMMON SHARE
Income from continuing operations	$	1.36		$	2.05		$	4.11		$	4.89
Discontinued operations, net (d)		0.01			0.11			(0.30	)		0.24
	$	1.37		$	2.16		$	3.81		$	5.13
DILUTED EARNINGS PER COMMON SHARE
Income from continuing operations	$	1.35		$	2.01		$	4.07		$	4.82
Discontinued operations, net (d)		0.01			0.11			(0.30	)		0.24
	$	1.36		$	2.12		$	3.77		$	5.06
AVERAGE COMMON SHARES OUTSTANDING
BASIC		852.8			808.5			854.2			804.8
DILUTED		860.3			822.4			863.0			816.5

See footnotes on following page.

(a)	The nine months 2006 includes $4 million pre-tax interest charges to purchase various debt issues in the open market. Interest charges to purchase various debt issues in 2005 were $41 million for the nine months, which included $30 million in the third quarter.

(b)	The third quarter 2005 includes a $335 million tax benefit due to the reversal of tax reserves no longer required. The nine months 2005 also includes a $619 million tax benefit resulting from a closing agreement with the U.S. Internal Revenue Service (IRS) resolving certain tax issues, and a $10 million tax charge related to a state income tax issue.

(c)	The third quarter 2005 includes a $726 million pre-tax gain from Valero's acquisition of Premcor and the subsequent sale of Valero shares received. The nine months 2005 also includes a $140 million pre-tax gain from the sale of 11 million shares of Lyondell Chemical Company.

(d)	In the second quarter 2006, Ecuador's Minister of Energy terminated Occidental's contract for the operation of Block 15 and the Government of Ecuador seized Occidental's Block 15 assets shortly thereafter. As a result of the seizure, Occidental has classified its Block 15 operations as discontinued operations on a retrospective application basis. The nine months 2006 discontinued operations also includes income from the Vintage properties that were held for sale.

SUMMARY OF CAPITAL EXPENDITURES AND DD&A EXPENSE

	Third Quarter				Nine Months
($ millions)	2006		2005		2006		2005

CAPITAL EXPENDITURES	$	750	$	585	$	1,992	$	1,583
DEPRECIATION, DEPLETION
AND AMORTIZATION
OF ASSETS	$	524	$	362	$	1,477	$	1,035

SUMMARY OF OPERATING STATISTICS

	Third Quarter				Nine Months
	2006		2005		2006		2005

NET OIL, GAS AND LIQUIDS
PRODUCTION PER DAY

United States
Crude oil and liquids (MBBL)
California	84		73		83		75
Permian	168		165		167		156
Horn Mountain	10		10		12		13
Hugoton and other	3		3		3		4
Total	265		251		265		248

Natural Gas (MMCF)
California	255		239		254		240
Hugoton and other	139		133		137		131
Permian	198		186		194		167
Horn Mountain	5		6		8		9
Total	597		564		593		547

Latin America
Crude oil (MBBL)
Argentina	37		—		33		—
Colombia	33		38		35		35
Total	70		38		68		35

Natural Gas (MMCF)
Argentina	19		—		18		—
Bolivia	16		—		16		—
Total	35		—		34		—

Middle East/North Africa
Crude oil (MBBL)
Oman	17		12		17		18
Qatar	41		42		43		43
Yemen	27		23		30		29
Libya	15		9		21		3
Total	100		86		111		93

Natural Gas (MMCF)
Oman	35		35		32		51

Other Eastern Hemisphere
Crude oil (MBBL)
Pakistan	5		5		4		5

Natural Gas (MMCF)
Pakistan	75		81		77		77

Barrels of Oil Equivalent (MBOE)
Subtotal consolidated subsidiaries	564		493		571		494
Other Interests
Colombia-minority interest	(4	)	(5	)	(4	)	(4	)
Russia-Occidental net interest	25		27		27		27
Yemen-Occidental net interest	2		1		2		2
Total Worldwide Production (MBOE)	587		516		596		519

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 earnings", 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 earnings is not considered to be an alternative to operating income in accordance with generally accepted accounting principles.

The following tables set forth the core earnings and significant items affecting earnings for each operating segment and corporate:

SIGNIFICANT TRANSACTIONS AND EVENTS AFFECTING EARNINGS (continued)

	Third Quarter
($ millions, except per-share amounts)	2006			Diluted EPS		2005			Diluted EPS
TOTAL REPORTED EARNINGS	$	1,168		$	1.36	$	1,747		$	2.12
Oil and Gas
Segment Earnings	$	1,877				$	1,638
Less:
Hurricane insurance charge		–					(9	)
Segment Core Earnings		1,877					1,647

Chemicals
Segment Earnings		247					3
Less:
Write-off of plants		–					(159	)
Hurricane insurance charge		–					(5	)
Segment Core Earnings		247					167
Total Segment Core Earnings		2,124					1,814

Corporate
Corporate Results – Non Segment*		(956	)				106
Less:
Gain on sale of Premcor-Valero shares		–					726
Reversal of tax reserves		–					335
Debt purchase expense		–					(30	)
Equity investment impairment		–					(15	)
Equity investment hurricane insurance charge		–					(2	)
Hurricane insurance charge		–					(10	)
Tax effect of pre-tax adjustments		–					(178	)
Discontinued operations, net**		9					87
Cumulative effect of accounting changes, net**		–					3
Corporate Core Results – Non Segment		(965	)				(810	)
TOTAL CORE EARNINGS	$	1,159		$	1.35	$	1,004		$	1.22

*	Interest expense, income taxes, G&A expense and other, and non-core items.
**	Amounts shown after tax.

SIGNIFICANT TRANSACTIONS AND EVENTS AFFECTING EARNINGS (continued)

	Nine Months
($ millions, except per-share amounts)	2006			Diluted EPS		2005			Diluted EPS
TOTAL REPORTED EARNINGS	$	3,254		$	3.77	$	4,129		$	5.06
Oil and Gas
Segment Earnings	$	5,740				$	4,172
Less:
Contract settlement		–					(26	)
Hurricane insurance charge		–					(9	)
Segment Core Earnings		5,740					4,207

Chemicals
Segment Earnings		745					442
Less:
Write-off of plants		–					(159	)
Hurricane insurance charge		–					(5	)
Segment Core Earnings		745					606
Total Segment Core Earnings		6,485					4,813

Corporate
Corporate Results – Non Segment*		(3,231	)				(485	)
Less:
Debt purchase expense		–					(41	)
Gain on sale of Lyondell shares		–					140
Gain on sale of Premcor-Valero shares		–					726
State tax issue charge		–					(10	)
Settlement of federal tax issues		–					619
Reversal of tax reserves		–					335
Equity investment impairment		–					(15	)
Equity investment hurricane insurance charge		–					(2	)
Hurricane insurance charge		–					(10	)
Tax effect of pre-tax adjustments		–					(225	)
Discontinued operations, net**		(260	)				192
Cumulative effect of accounting changes, net**		–					3
Corporate Core Results – Non Segment		(2,971	)				(2,197	)
TOTAL CORE EARNINGS	$	3,514		$	4.07	$	2,616		$	3.20

*	Interest expense, income taxes, G&A expense and other, and non-core items.
**	Amounts shown after tax.

Occidental Petroleum Corporatio (OXY) 8-KOccidental Petroleum Announces Third Quarter Earnings