LOS ANGELES, Oct. 28, 2008 (GLOBE NEWSWIRE) -- Occidental Petroleum Corporation (NYSE:OXY) announced net income of $2.271 billion ($2.78 per diluted share) for the third quarter of 2008, compared with $1.324 billion ($1.58 per diluted share) for the third quarter of 2007.
In announcing the results, Dr. Ray R. Irani, Chairman and Chief Executive Officer, said, "Our production grew by 3 percent for the third quarter and 5.5 percent for the first nine months compared to last year. As we look forward, we believe our disciplined approach to fiscal management has positioned the company to continue to succeed in the current economic climate."
QUARTERLY RESULTS
Oil and Gas
Oil and gas segment earnings were $3.618 billion for the third quarter of 2008, compared with $1.955 billion for the same period in 2007. The $1.7 billion increase in the third quarter 2008 segment earnings reflected $1.8 billion of increases from higher crude oil and natural gas prices, higher oil and gas production and lower exploration expense, partially offset by increased DD&A rates and higher operating expenses.
For the third quarter of 2008, daily oil and gas production averaged 588,000 barrels of oil equivalent (BOE), compared with 570,000 BOE per day produced in the third quarter of 2007. The bulk of the production increase was the result of 31,000 BOE per day higher production from the Dolphin project, which began production in the third quarter of 2007, partially offset by 5,000 BOE per day lower production resulting from Hurricane Ike and 13,000 BOE per day lower production in Libya as a result of the new contract that became effective in the third quarter of 2008.
Oxy's realized price for worldwide crude oil was $104.15 per barrel for the third quarter of 2008, compared with $67.81 per barrel for the third quarter of 2007. Domestic realized gas prices increased from $5.90 per MCF in the third quarter of 2007 to $9.35 per MCF for the third quarter of 2008.
Chemicals
Chemical segment earnings for the third quarter of 2008 were $219 million, compared with $212 million for the same period in 2007. The third quarter of 2008 results reflect higher caustic soda margins, partially offset by lower volumes and margins for chlorine and polyvinyl chloride.
Midstream, Marketing and Other
Midstream segment earnings were $66 million for the third quarter of 2008, compared with $86 million for the third quarter of 2007. The third quarter of 2008 reflects lower margins in crude oil marketing, partially offset by higher pipeline income from Dolphin, which came on line in the second half of 2007, and higher margins in gas processing and power generation.
NINE MONTHS RESULTS
Net income for the nine months of 2008 was $6.414 billion ($7.79 per diluted share), compared with $3.948 billion ($4.69 per diluted share) for the nine months of 2007.
Core results were $6.391 billion ($7.76 per diluted share) for the nine months of 2008, compared with $2.941 billion ($3.50 per diluted share) for the nine months of 2007. See the attached schedule for a reconciliation of net income to core results.
Oil and Gas
Oil and gas segment earnings were $10.312 billion for the nine months of 2008, compared with $5.496 billion for the same period of 2007. Oil and gas core results were $4.908 billion for the nine months of 2007 after excluding a $412 million gain from the sale of Occidental's Russian joint venture interests, a $35 million gain from the sale of other oil and gas interests, $112 million income from the resolution of certain legal disputes and a $29 million gain from the sale of exploration properties, net of impairments. The $5.4 billion increase in the 2008 core results from $4.9 billion in 2007 reflected $5.5 billion from higher crude oil and natural gas prices, increased oil and gas production and lower exploration expense, partially offset by higher operating expenses and increased DD&A rates.
Daily oil and gas production for the first nine months was 594,000 BOE per day for 2008, compared with 563,000 BOE per day for the same 2007 period. The 5.5 percent increase was largely the result of 44,000 BOE per day higher production from the Dolphin project, partially offset by 5,000 BOE per day lower production in Libya resulting from the new contract.
Oxy's realized price for worldwide crude oil was $100.39 per barrel for the nine months of 2008, compared with $59.47 per barrel for the nine months of 2007. Domestic realized gas prices increased from $6.45 per MCF in the nine months of 2007 to $9.18 per MCF in the nine months of 2008.
Chemicals
Chemical segment earnings were $542 million for the nine months of 2008, compared with $507 million for the nine months of 2007. The 2008 results reflect higher margins for caustic soda, partially offset by lower volumes and margins for chlorine and polyvinyl chloride.
Midstream, Marketing and Other
Midstream segment earnings were $350 million for the nine months of 2008, compared with $229 million for the same period in 2007. The improvement in 2008 reflected higher pipeline income from the Dolphin Pipeline and higher margins in gas processing and power generation, partially offset by lower margins in crude oil marketing.
About Oxy
Occidental Petroleum Corporation is an international oil and gas exploration and production company with operations in the United States, Middle East/North Africa and Latin America regions. Oxy is the fourth largest U.S. oil and gas company, based on equity market capitalization. Oxy's wholly owned subsidiary, OxyChem, manufactures and markets chlor-alkali products and vinyls. Occidental is committed to safeguarding the environment, protecting the safety and health of employees and neighboring communities and upholding high standards of social responsibility in all of the company's worldwide operations.
Forward-Looking Statements
Statements in this release 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; operational interruptions; changes in tax rates 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 release. 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.
