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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) NOVEMBER 16, 1998
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
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Item 5. Other Events
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(1) $200 Million Principal Amount of 6.75% Senior Notes due November
15, 2002 and $400 Million Principal Amount of 7.375% Senior Notes due November
15, 2008 (collectively the "Notes"). Exhibits with respect to the sale of the
Notes are filed herewith in connection with the Registration Statement on Form
S-3 (File No. 333-52053) declared effective by the Securities and Exchange
Commission (the "Commission") on May 12, 1998, that, together with the
Registration Statement on Form S-3 (File No. 333-67385) filed on November 16,
1998, pursuant to Rule 462(b) of the rules and regulations of the Commission
under the Securities Act of 1933, as amended, relate to an aggregate principal
amount of $870,000,000 of senior debt securities of Occidental Petroleum
Corporation ("Occidental").
(2) Occidental Makes Announcement at Annual Analyst Meeting in New York
City.
On November 19, 1998, Occidental announced that it is engaged in a
continuous realignment of its asset portfolio to strengthen earnings. By
concentrating on growing core assets, Occidental expects to reduce costs.
However, Occidental described 1998 as a difficult year. Depressed energy and
chemical prices this year are expected to reduce total year 1998 earnings by an
estimated $850 million compared with 1997 earnings, assuming 1997 prices had
been in effect.
To partially offset lower prices, Occidental is pressing ahead with
programs designed to reduce selling, general and administrative costs by an
estimated $200 million annually by the year 2000. Some employee headcount and
cost reductions already have been announced at Occidental's corporate offices in
Los Angeles, at its oil and gas division in Bakersfield, California, and at its
chemical division based in Dallas, Texas.
As part of its streamlining of its asset base, Occidental is
concentrating its oil and gas business in the United States, the Middle East and
Latin America. An example of this effort is a major international asset exchange
with Shell completed in September, in which Occidental acquired Shell's
producing oil holdings in Colombia and Yemen in exchange for Occidental's
interests in large gas discoveries in Malaysia and the Philippines that would
require long lead times and nearly $2 billion in capital to develop. As a result
of the exchange, Occidental is expected to increase its net oil production by
approximately 46,000 barrels per day. In 1998 significant cost savings have been
achieved at Elk Hills in California and at Qatar's Idd el Shargi North Dome in
the Middle East, while production and reserves have increased.
Occidental's net worldwide oil production in 1999 is expected to
increase about 8 percent to 347,000 barrels per day, from 320,000 this year.
Occidental's worldwide estimated recoverable deposits of oil are
expected to increase approximately 22 percent to 1.1 billion barrels at year-end
1998, versus 900 million a year earlier. Of that total, U.S. recoverable
deposits of oil will account for 40 percent, compared with 22 percent in 1997,
largely reflecting the Elk Hills acquisition.
In chemicals, Occidental is focusing on being number one or number two
in sales of all of its core products, either through internal expansions or
alliances with other companies. The Equistar petrochemicals alliance, completed
this year with Lyondell Petrochemical Company and Millennium Chemicals, Inc.,
and a pending vinyls alliance with The Geon Company, to be completed in early
1999, will create leaders in their respective chemical industries and are
expected to achieve in the near term annual cost savings net to Occidental of
$80 million and $60 million, respectively.
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Occidental's capital expenditures in 1999 will be an estimated $825
million, down about 20 percent from 1998 and about 47 percent from 1997. Of the
total, approximately 80 percent will be allocated to oil and gas, versus
approximately 70 percent in recent years. Of the $650 million for oil and gas,
$125 million will be allocated to exploration.
Forward-Looking Information
Portions of this report 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: global
commodity pricing fluctuations; competitive pricing pressures; higher than
expected costs including feedstocks; the supply/demand considerations for
Occidental's products; any general economic recession domestically or
internationally; regulatory uncertainties; not successfully completing any
development of new fields, expansion, capital expenditure, efficiency
improvement, acquisition or disposition; and other risks outlined in
Occidental's public filings, including the Annual Report on Form 10-K for the
year ended December 31, 1997.
Occidental has no obligation to update or revise forward-looking
statements. In light of the foregoing risks, uncertainties and assumptions, the
forward-looking events described in this report might not occur.
Item 7. Exhibits
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1.1 Underwriting Agreement, dated November 16, 1998, between
Occidental Petroleum Corporation and the Underwriters named
therein.
4.1 Form of 6.75% Senior Note due November 15, 2002.
4.2 Form of 7.375% Senior Note due November 15, 2008.
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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: November 19, 1998 S. P. Dominick, Jr.
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S. P. Dominick, Jr., Vice President and
Controller (Chief Accounting and Duly
Authorized Officer)
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EXHIBIT INDEX
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Exhibit No. Description
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1.1 Underwriting Agreement, dated November 16, 1998, between
Occidental Petroleum Corporation and the Underwriters named
therein.
4.1 Form of 6.75% Senior Note due November 15, 2002.
4.2 Form of 7.375% Senior Note due November 15, 2008.