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):
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[ ] 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))
Item 2.02. Results of Operations and Financial Condition
On October 19, 2010, Occidental Petroleum Corporation released information regarding its results of operations for the three and nine months ended September 30, 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 October 19, 2010, Occidental Petroleum Corporation (NYSE:OXY) announced income from continuing operations for the third quarter of 2010 of $1.2 billion ($1.47 per diluted share), compared with $929 million ($1.14 per diluted share) for the third quarter of 2009. Net income was $1.2 billion ($1.46 per diluted share) for the third quarter of 2010, compared with $927 million ($1.14 per diluted share) for the third quarter of 2009.
QUARTERLY RESULTS
Oil and Gas
Oil and gas segment earnings were $1.7 billion for the third quarter of 2010, compared with $1.5 billion for the same period in 2009. The increase in the third quarter of 2010 results was due to higher crude oil and natural gas prices and higher volumes, partially offset by higher operating costs and DD&A rates.
For the third quarter of 2010, daily oil and gas production volumes averaged 751,000 barrels of oil equivalent (BOE), compared with 705,000 BOE in the third quarter of 2009. Volumes increased 6.5 percent, primarily in the Middle East/North Africa, with smaller increases in Argentina and the United States. The Middle East/North Africa increase included new production from the Bahrain start-up and increased production from the Mukhaizna field in Oman. Daily sales volumes were 749,000 BOE in the third quarter of 2010, compared to 702,000 BOE in the third quarter of 2009.
Oxy's realized price for worldwide crude oil was $70.71 per barrel for the third quarter of 2010, compared with $62.79 per barrel for the third quarter of 2009. Domestic realized gas prices rose from $3.04 per MCF in the third quarter of 2009 to $4.20 per MCF for the third quarter of 2010.
Chemicals
Chemical segment earnings for the third quarter 2010 were $189 million, compared with $72 million for the same period in 2009. The third quarter of 2010 results reflect improved margins and volumes across chlor-alkali and vinyl products. Export volumes also increased by 22 percent compared to 2009.
Midstream, Marketing and Other
Midstream segment earnings were $163 million for the third quarter of 2010, compared with $77 million for the third quarter of 2009. Earnings for the third quarter of 2010 reflect higher margins in the trading and marketing businesses and higher pipeline income.
NINE-MONTH RESULTS
Year-to-date 2010 income from continuing operations was $3.3 billion ($4.09 per diluted share), compared with $2.0 billion ($2.44 per diluted share) for 2009. Net income for the first nine months of 2010 was $3.3 billion ($4.07 per diluted share), compared with $2.0 billion ($2.43 per diluted share) for the same period in 2009.
Oil and Gas
Oil and gas segment earnings were $5.4 billion for the nine months of 2010, compared with $3.1 billion for the same period of 2009. The $2.3 billion increase in the 2010 results reflected higher crude oil and natural gas prices and higher volumes, partially offset by higher operating costs and DD&A rates.
Daily oil and gas production volumes for the nine months were 746,000 BOE for 2010, compared with 711,000 BOE for the 2009 period, an increase of nearly 5 percent. Volumes increased in the Middle East/North Africa, resulting from the new production in Bahrain and higher production in the Mukhaizna field in Oman, and domestically in California. Production was negatively impacted in the Middle East/North Africa, Long Beach and Colombia resulting from higher year-over-year average oil prices affecting production sharing and similar contracts by 21,000 BOE per day. Daily sales volumes were 741,000 BOE in the first nine months of 2010, compared with 711,000 BOE for 2009.
Oxy's realized price for worldwide crude oil was $71.57 per barrel for the nine months of 2010, compared with $51.44 per barrel for the nine months of 2009. Domestic realized gas prices increased from $3.15 per MCF in the nine months of 2009 to $4.67 per MCF in the nine months of 2010.
Chemicals
Chemical segment earnings were $327 million for the nine months of 2010, compared with $356 million for the same period in 2009. The 2010 nine-month results reflect improving market conditions, with global markets outpacing domestic markets in the recovery resulting in 16 percent higher export volumes compared to 2009.
Midstream, Marketing and Other
Midstream segment earnings were $270 million for the nine months of 2010, compared with $154 million for the same period in 2009. The 2010 results reflect higher margins in the gas processing business and increased earnings in the pipeline and power generation businesses.
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; 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; 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 unr est, 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” 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 report. 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, I tem 1A “Risk Factors” of the 2009 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.
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.
