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Occidental Petroleum Announces Third Quarter of 2012 Income



  Occidental Petroleum Announces Third Quarter of 2012 Income

  * Q3 2012 income from continuing operations of $1.4 billion ($1.70 per
    diluted share)
  * Q3 2012 domestic daily oil and gas production of 469,000 barrels of oil
    equivalent, a record for the eighth consecutive quarter

Business Wire

LOS ANGELES -- October 25, 2012

Occidental Petroleum Corporation (NYSE:OXY) announced income from continuing
operations of $1.4 billion ($1.70 per diluted share) for the third quarter of
2012, compared with the third quarter of 2011 income from continuing
operations of $1.8 billion ($2.18 per diluted share).

In announcing the results, Stephen I. Chazen, President and Chief Executive
Officer, said, "Our third quarter 2012 total company production of 766,000
barrels of oil equivalent per day was 27,000 per day, or 4 percent higher than
the third quarter of 2011 production. Our domestic production of 469,000
barrels of oil equivalent was 8 percent higher than the third quarter of 2011
and was a record for the eighth consecutive quarter. Our domestic liquids
production of 334,000 barrels per day, which was also a record, was 10 percent
higher than last year's third quarter.

"Income from continuing operations diluted earnings per share of $1.70 was
$0.06 higher than the second quarter of 2012 as a result of higher oil and gas
volumes and improved results in the marketing and trading businesses,
partially offset by lower oil prices. We generated cash flow from operations
before working capital changes of $9.2 billion for the first nine months of
2012 and invested $7.7 billion in capital expenditures."

                                 Oil and Gas

Oil and gas segment earnings were $2.0 billion for the third quarter of 2012,
compared with $2.6 billion for the third quarter of 2011. Lower product prices
and higher costs in the third quarter of 2012 were partially offset by higher
oil volumes.

For the third quarter of 2012, daily oil and gas production volumes averaged
766,000 barrels of oil equivalent (BOE), compared with 739,000 BOE in the
third quarter of 2011.

The third quarter 2012 production increase resulted from higher volumes of
33,000 BOE per day from domestic operations, partially offset by a decrease in
international production. The international decrease included lower volumes
from Dolphin, resulting from the full cost recovery of pre-startup capital,
and in Yemen due to the Masila field contract expiration, partially offset by
higher volumes from other international operations.

Daily sales volumes increased from 743,000 BOE in the third quarter of 2011 to
765,000 BOE in the third quarter of 2012.

Oxy’s realized price for worldwide crude oil was $96.62 per barrel for the
third quarter of 2012, compared with $97.24 per barrel for the third quarter
of 2011. The third quarter of 2012 realized oil price represents 105 percent
of the average WTI and 88 percent of the average Brent price for the quarter.
Worldwide NGL prices were $40.65 per barrel in the third quarter of 2012,
compared with $56.06 per barrel in the third quarter of 2011. Domestic gas
prices decreased 41 percent from $4.23 per MCF in the third quarter of 2011 to
$2.48 per MCF for the third quarter of 2012.

Third quarter 2012 realized prices were lower than second quarter 2012 prices
for worldwide oil and NGLs and were higher for domestic natural gas. On a
sequential quarterly basis, prices decreased 3 percent for worldwide crude oil
and NGLs and increased 19 percent for domestic natural gas.

                                  Chemicals

Chemical segment earnings for the third quarter of 2012 were $162 million,
compared with $245 million in the third quarter of 2011. The decrease was the
result of lower prices across most product lines, particularly in polyvinyl
chloride (PVC) and vinyl chloride monomer (VCM), partially offset by lower
natural gas and ethylene costs.

                        Midstream, Marketing and Other

Midstream segment earnings were $156 million for the third quarter of 2012,
compared with $77 million for the third quarter of 2011. The results reflect
higher margins in the marketing and trading businesses, partially offset by
lower income in the gas processing and pipeline businesses.

                              NINE-MONTH RESULTS

Core income for the first nine months of 2012 was $4.3 billion ($5.26 per
diluted share), compared with $5.2 billion ($6.37 per diluted share) for the
same period in 2011. Cash flow from operations after working capital changes
was $8.5 billion.

                                 Oil and Gas

Oil and gas segment earnings were $6.6 billion for the first nine months of
2012, compared with $7.7 billion for the same period of 2011. The decrease in
2012 reflected lower NGL and natural gas prices, higher operating costs,
exploration expense and DD&A rates, partially offset by higher oil prices and
domestic volumes.

Oil and gas production volumes for the nine months were 762,000 BOE per day
for 2012, compared with 728,000 BOE per day for the same period in 2011.
Year-over-year, our domestic production increased by nearly 10 percent, while
total company production increased by nearly 5 percent. Dolphin's full cost
recovery of pre-startup capital, which reduced our production, was the only
operation where production sharing and similar contracts had an appreciable
effect.

The nine-month 2012 production increase resulted from 41,000 BOE per day in
higher domestic volumes, partially offset by lower volumes in the Middle
East/North Africa and Latin America.

Daily sales volumes were 757,000 BOE in the first nine months of 2012,
compared with 726,000 BOE for the same period in 2011.

Oxy's realized prices improved for crude oil but declined for natural gas and
NGLs on a year-over-year basis. Worldwide crude oil prices were $101.20 per
barrel for the nine months of 2012, compared with $97.33 per barrel for the
nine months of 2011. Worldwide NGL prices were $45.21 per barrel for the nine
months of 2012, compared with $55.63 per barrel in the nine months of 2011.
Domestic gas prices declined 42 percent, from $4.24 per MCF in the nine months
of 2011 to $2.47 per MCF in the nine months of 2012.

                                  Chemicals

Chemical segment earnings were $540 million for the nine months of 2012,
compared with $717 million for the same period in 2011. The reduction was
primarily a result of lower export volumes and prices due to the economic
conditions in Europe and Asia, partially offset by lower energy and feedstock
costs.

                        Midstream, Marketing and Other

Midstream segment earnings were $364 million for the nine months of 2012,
compared with $378 million for the same period in 2011.

                          Forward-Looking Statements

Portions of this press release 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; general domestic political and regulatory approval
conditions; higher-than-expected costs; international political conditions;
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 or
acquisitions; exploration risks such as drilling unsuccessful wells; any
changes in general economic conditions domestically or internationally; the
ability to attract trained engineers; potential liability for remedial actions
under existing or future environmental regulations and litigation; potential
liability resulting from pending or future litigation; potential disruption or
interruption of Occidental’s production or manufacturing or damage to
facilities due to accidents, chemical releases, labor unrest, weather, natural
disasters, political events or insurgent activity; failure of risk management;
changes in law or regulations; or changes in tax rates. Words such as
"estimate", "project", "predict", "will", "would", "should", "could", "may",
"might", "anticipate", "plan", "intend", "believe", "expect", "aim", "goal",
"target", "objective", "likely" 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, Item 1A "Risk Factors" of the 2011
Form 10-K.

For further analysis of Occidental's quarterly performance, please visit the
website: www.oxy.com

                                                                        
Attachment 1
 
SUMMARY OF SEGMENT NET SALES AND EARNINGS
                                                                          
                      Third Quarter                     Nine Months
($ millions,
except                2012             2011             2012             2011
per-share
amounts)
SEGMENT NET
SALES
Oil and Gas           $ 4,635          $ 4,677          $ 14,032         $ 13,635
Chemical                1,119            1,231            3,439            3,721
Midstream,
Marketing and           389              256              1,044            1,109
Other
Eliminations            (178   )         (158   )         (514   )         (560   )
                                                                          
Net Sales             $ 5,965          $ 6,006          $ 18,001         $ 17,905  
                                                                          
SEGMENT
EARNINGS
Oil and Gas (a)       $ 2,026          $ 2,612          $ 6,573          $ 7,704
Chemical                162              245              540              717
Midstream,
Marketing and           156              77               364              378     
Other
                        2,344            2,934            7,477            8,799
                                                                          
Unallocated
Corporate Items
Interest
expense, net            (34    )         (23    )         (87    )         (259   )
(b)
Income taxes            (855   )         (1,087 )         (2,869 )         (3,252 )
(c)
Other                   (76    )         (49    )         (250   )         (289   )
                                                                          
Income from
Continuing              1,379            1,775            4,271            4,999
Operations
Discontinued
operations, net         (4     )         (4     )         (9     )         138     
(d)
                                                                          
NET INCOME            $ 1,375          $ 1,771          $ 4,262          $ 5,137   
                                                                          
BASIC EARNINGS
PER COMMON
SHARE
Income from
continuing            $ 1.70           $ 2.18           $ 5.26           $ 6.14
operations
Discontinued            (0.01  )         (0.01  )         (0.01  )         0.17    
operations, net
                      $ 1.69           $ 2.17           $ 5.25           $ 6.31    
                                                                          
DILUTED
EARNINGS PER
COMMON SHARE
Income from
continuing            $ 1.70           $ 2.18           $ 5.26           $ 6.14
operations
Discontinued            (0.01  )         (0.01  )         (0.01  )         0.17    
operations, net
                      $ 1.69           $ 2.17           $ 5.25           $ 6.31    
AVERAGE COMMON
SHARES
OUTSTANDING
BASIC                   809.7            812.5            810.1            812.6
DILUTED                 810.4            813.2            810.8            813.3   
                                                                          
(a) Oil and Gas - The nine months of 2011 include pre-tax charges of $35 million
related to exploration write-offs in Libya and $29 million related to Colombia net
worth tax. Also, included in the nine months of 2011 results is a pre-tax gain for
sale of an interest in a Colombia pipeline of $22 million.
(b) Unallocated Corporate Items - Interest Expense, net - The nine months of 2011
include a pre-tax charge of $163 million related to the premium on debt
extinguishment.
(c) Unallocated Corporate Items - Taxes - The nine months of 2011 include a net $21
million charge for out-of-period state income taxes.
(d) Discontinued Operations, net - The nine months of 2011 include a $144 million
after-tax gain from the sale of the Argentine operations.
                                                                          
                                                                          
                                                                          
Attachment 2
 
SUMMARY OF CAPITAL EXPENDITURES AND DD&A EXPENSE
                                                                          
                      Third Quarter                     Nine Months
($ millions)          2012             2011             2012             2011
CAPITAL               $ 2,591          $ 2,011          $ 7,716          $ 4,969   
EXPENDITURES
                                                                          
DEPRECIATION,
DEPLETION AND
AMORTIZATION OF       $ 1,149          $ 924            $ 3,320          $ 2,653   
ASSETS
                                                                          
                                                                          
                                                                          
Attachment 3
 
SUMMARY OF OPERATING STATISTICS - PRODUCTION
                                                                          
                      Third Quarter                     Nine Months
                      2012             2011             2012             2011
NET OIL, GAS
AND LIQUIDS
PRODUCTION PER
DAY
United States
Crude Oil
(MBBL)
California              88               80               87               78
Permian                 144              133              140              132
Midcontinent            28               17               24               16      
and Other
Total                   260              230              251              226
                                                                          
NGL (MBBL)
California              18               16               16               15
Permian                 40               37               39               38
Midcontinent            16               20               18               14      
and Other
Total                   74               73               73               67
                                                                          
Natural Gas
(MMCF)
California              247              269              261              254
Permian                 151              151              153              153
Midcontinent            414              379              414              357     
and Other
Total                   812              799              828              764
                                                                          
Latin America
Crude Oil
(MBBL) -                30               27               28               29
Colombia
                                                                          
Natural Gas
(MMCF) -                12               15               13               16
Bolivia
                                                                          
Middle East /
North Africa
Crude Oil
(MBBL)
Bahrain                 4                4                5                4
Dolphin                 7                10               8                10
Oman                    69               69               65               68
Qatar                   69               73               71               72
Other                   34               32               36               39      
Total                   183              188              185              193
                                                                          
NGL (MBBL)
Dolphin                 7                11               9                11
Other                   1                -                -                -       
Total                   8                11               9                11
                                                                          
Natural Gas
(MMCF)
Bahrain                 237              169              229              171
Dolphin                 147              215              171              205
Oman                    57               59               57               53      
Total                   441              443              457              429
                                                                          
                                                                          
Barrels of Oil
Equivalent              766              739              762              728     
(MBOE)
                                                                          
                                                                          
                                                                          
Attachment 4
 
SUMMARY OF OPERATING STATISTICS - SALES
                                                                          
                      Third Quarter                     Nine Months
                      2012             2011             2012             2011
NET OIL, GAS
AND LIQUIDS
SALES PER DAY
                                                                          
United States
Crude Oil               259              230              251              226
(MBBL)
NGL (MBBL)              74               73               73               67
Natural Gas             807              799              825              764
(MMCF)
                                                                          
Latin America
Crude Oil
(MBBL) -                30               24               28               29
Colombia
                                                                          
Natural Gas
(MMCF) -                12               15               13               16
Bolivia
                                                                          
Middle East /
North Africa
Crude Oil
(MBBL)
Bahrain                 4                4                4                4
Dolphin                 7                9                8                9
Oman                    67               71               64               70
Qatar                   68               76               70               73
Other                   38               35               34               35      
Total                   184              195              180              191
                                                                          
NGL (MBBL)
Dolphin                 8                11               9                11
                                                                          
Natural Gas             441              443              457              429
(MMCF)
                                                                          
                                                                          
Barrels of Oil
Equivalent              765              743              757              726     
(MBOE)
                                                                          
                                                                          
                                                                          
Attachment 5
 
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.
                                                                          
                                                                         Third
                                                                         Quarter
                                       Diluted                           Diluted
($ millions,
except                2012             EPS              2011             EPS
per-share
amounts)
TOTAL REPORTED        $ 1,375          $ 1.69           $ 1,771          $ 2.17    
EARNINGS
                                                                          
Oil and Gas
Segment               $ 2,026                           $ 2,612
Earnings
Add:
No significant
items affecting         -                                 -       
earnings
                                                                          
Segment Core            2,026                             2,612   
Results
                                                                          
Chemicals
Segment                 162                               245
Earnings
Add:
No significant
items affecting         -                                 -       
earnings
                                                                          
Segment Core            162                               245     
Results
                                                                          
Midstream,
Marketing and
Other
Segment                 156                               77
Earnings
Add:
No significant
items affecting         -                                 -       
earnings
                                                                          
Segment Core            156                               77      
Results
                                                                          
Total Segment           2,344                             2,934   
Core Results
                                                                          
Corporate
Corporate
Results --
Non Segment *           (969   )                          (1,163 )
Add:
Discontinued
operations, net         4                                 4       
**
                                                                          
Corporate Core
Results - Non           (965   )                          (1,159 )
Segment
                                                                          
TOTAL CORE            $ 1,379          $ 1.70           $ 1,775          $ 2.18    
RESULTS
                                                                          
* Interest expense, income taxes, G&A expense and other.
** Amounts shown after tax.
                                                                          
                                                                          
                                                                          
Attachment 6
 
SIGNIFICANT TRANSACTIONS AND EVENTS AFFECTING EARNINGS (continued)
                                                                          
                                                                         Nine
                                                                         Months
                                       Diluted                           Diluted
($ millions,
except                2012             EPS              2011             EPS
per-share
amounts)
TOTAL REPORTED        $ 4,262          $ 5.25           $ 5,137          $ 6.31    
EARNINGS
                                                                          
Oil and Gas
Segment               $ 6,573                           $ 7,704
Earnings
Add:
Libya
exploration             -                                 35
write-off
Gain on sale of
Colombia                -                                 (22    )
pipeline
interest
Foreign tax             -                                 29      
                                                                          
Segment Core            6,573                             7,746   
Results
                                                                          
Chemicals
Segment                 540                               717
Earnings
Add:
No significant
items affecting         -                                 -       
earnings
                                                                          
Segment Core            540                               717     
Results
                                                                          
Midstream,
Marketing and
Other
Segment                 364                               378
Earnings
Add:
No significant
items affecting         -                                 -       
earnings
                                                                          
Segment Core            364                               378     
Results
                                                                          
Total Segment           7,477                             8,841   
Core Results
                                                                          
Corporate
Corporate
Results --
Non Segment *           (3,215 )                          (3,662 )
Add:
Premium on debt         -                                 163
extinguishments
State income            -                                 33
tax charge
Tax effect of
pre-tax                 -                                 (50    )
adjustments
Discontinued
operations, net         9                                 (138   )
**
                                                                          
Corporate Core
Results - Non           (3,206 )                          (3,654 )
Segment
                                                                          
TOTAL CORE            $ 4,271          $ 5.26           $ 5,187          $ 6.37    
RESULTS
                                                                          
* Interest expense, income taxes, G&A expense and other
** Amounts shown after tax.

Contact:

Occidental Petroleum Corporation
Melissa E. Schoeb (media)
melissa_schoeb@oxy.com
310-443-6504
or
Chris Stavros (investors)
chris_stavros@oxy.com
212-603-8184
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