Fourth Quarter 2006 Earnings - 1Q07 Outlook
Expect Total Capex for 2007 of about $3.3 to $3.4 Billion.
Oil & Gas accounting for approximately 90 percent.
Year-to-year increase in capex is due to the Oman Mukhaizna project,
development of the Vintage acquisition properties in Argentina and
California, the exploratory activity in Libya, and a Permian gas plant and CO2 expansion.
Increases partly offset by lower expenditures for the Dolphin project which
will start-up later this year.
Expect 1Q07 Chemical Earnings to be similar to 4Q06 results.
Volume in January expected to remain weak with continuing improvement in
February and March.
We currently expect improvement from these levels in subsequent quarters.
Expect Interest Expense to be about $15 million.
Excludes charges for the recently announced debt reduction tender.
Fourth Quarter 2006 Earnings - 1Q07 Outlook
Commodity Price Sensitivity
A $1.00 per barrel change in oil prices impacts oil and gas quarterly earnings by
about $38 million (pre-tax). The WTI price in 4Q06 was $60.20 per barrel, compared
to the current price of approx. $53 per barrel. This $7 a barrel WTI price drop is
expected to reduce Oil & Gas segment income by $265 million.
A change of 25-cents per million BTUs in gas prices has a $12 million impact on
quarterly earnings (pre-tax). The NYMEX gas price for 4Q06 was $6.27 per mcf.
Our realized 4Q06 domestic gas price averaged $5.64 per mcf.
We expect DD&A to be $2.4 billion for full-year 2007.
We expect our effective worldwide tax rate in 1Q07 to be
about 49%.
Higher taxes are due to an increase in the proportion of income outside the US.
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Fourth Quarter 2006 Earnings
See the investor relations supplemental schedules for the reconciliation of non-
GAAP items. 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 materially 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 filing. Unless
legally required, Occidental disclaims 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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