01—Abstract
Summary
Summary of the 10-K filed February 23, 2012. Cited figures are marked; the original filing is the authoritative source.
Occidental Petroleum Corporation (OXY) reported strong financial performance for the fiscal year ended December 31, 2011, driven by robust oil and gas prices and increased production volumes.
The company's diversified business segments, including oil and gas, chemicals, and midstream/marketing, contributed to significant revenue growth and profitability. OXY demonstrated a commitment to shareholder returns through consistent dividend growth and strategic share repurchases. The company's strategic focus on developing long-lived oil and gas assets, coupled with efficient operations in its chemical segment, positions it favorably for continued growth.
Management highlighted a strong balance sheet and disciplined capital allocation as key strengths. Significant investments were made in domestic and international oil and gas properties, including acquisitions in South Texas and the Permian Basin, as well as a substantial investment in the Shah Gas Field development project in Abu Dhabi.
These strategic moves are aimed at expanding production capacity and enhancing long-term value. Despite a challenging commodity price environment for natural gas, OXY's oil operations and chemical segment performance significantly offset these pressures, leading to improved overall financial results and a positive outlook for the coming year.
02—Key points
Key Highlights
- Net sales increased by approximately 25.7% to $23.94 billion in 2011 from $19.05 billion in 2010, primarily driven by higher oil and NGL prices and increased volumes in the oil and gas segment.
- Income from continuing operations rose to $6.64 billion in 2011, a significant increase from $4.57 billion in 2010, reflecting strong operational performance across segments.
- The company continued its commitment to shareholder returns by increasing dividends per common share to $1.84 in 2011 from $1.47 in 2010.
- Occidental made significant capital expenditures of $7.52 billion in 2011, a substantial increase from $3.94 billion in 2010, primarily focused on oil and gas development and acquisitions.
- The company maintained a strong financial position with total assets growing to $60.04 billion at the end of 2011, up from $52.43 billion in 2010.
- Key strategic investments in 2011 included acquisitions of domestic oil and gas assets and a 40% participating interest in the Shah Gas Field development project in Abu Dhabi.
- Total stockholder return over the past five years was 110%, demonstrating consistent value creation for investors.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2011filed February 23, 2012Financial Statements
FY2011 against FY2010
| Line item | FY2011FY2010 | Change |
|---|---|---|
| Revenue | $23.94B$19.05B | +25.7% |
| Operating Expenses | $1.52B$1.40B | +9.1% |
| Operating Income | $6.64B$4.57B | +45.3% |
| Net Income | $6.77B$4.53B | +49.5% |
| EPS (Basic) | $8.32$5.57 | +49.4% |
| EPS (Diluted) | $8.32$5.56 | +49.6% |
| Shares Outstanding (Basic) | 812.10M812.50M | 0.0% |
| Shares Outstanding (Diluted) | 812.90M813.80M | −0.1% |
05—Questions
Frequently Asked Questions
What were the main drivers of Occidental Petroleum's revenue growth in 2011?
Occidental Petroleum's revenue growth in 2011 was primarily driven by higher global oil and NGL prices, coupled with increased production volumes in its oil and gas segment. Higher sales volumes and improved pricing in the chemical segment also contributed significantly to the overall revenue increase.
How did Occidental Petroleum allocate its capital in 2011?
In 2011, Occidental Petroleum significantly increased its capital expenditures to $7.52 billion, with the majority allocated to its oil and gas segment. Key investments included acquisitions of domestic oil and gas properties in South Texas, California, the Permian Basin, and the Williston Basin, as well as a major investment in the Shah Gas Field development project in Abu Dhabi.
What is Occidental Petroleum's strategy for maximizing total returns to stockholders?
Occidental Petroleum's strategy to maximize total returns to stockholders involves growing oil and gas production through development programs and strategic acquisitions, allocating capital to achieve returns well above its cost-of-capital, providing consistent dividend growth, and maintaining financial discipline and a strong balance sheet.
What was the company's financial health and liquidity position at the end of 2011?
At the end of 2011, Occidental Petroleum maintained a strong financial position with $3.8 billion in cash and cash equivalents. The company had access to a $2.0 billion bank credit facility and a debt-to-capitalization ratio of 13%, indicating sound liquidity and financial flexibility.
06—Continue