What were the main drivers of Occidental Petroleum's revenue growth in the first nine months of 2006?

Revenue growth was primarily driven by higher worldwide crude oil and chemical prices, coupled with increased oil and gas production volumes. Higher natural gas prices also contributed to the increase for the nine-month period.

What is the status of the Ecuador Block 15 operations?

Ecuador terminated Occidental's contract for Block 15 operations in May 2006 and seized the assets. Occidental has filed an arbitration claim for redress. These operations are now classified as discontinued operations, and the company recorded a net after-tax charge of $306 million in the second quarter of 2006 related to the write-off of its investment and associated obligations.

How is Occidental managing its share repurchase program?

Occidental has an active share repurchase program. For the first nine months of 2006, it repurchased approximately 26.7 million shares for $1.3 billion. The program was increased by the Board of Directors to 40 million shares, funded by cash generated from operations.

What are the key financial risks highlighted in this report?

Key financial risks include potential liabilities from environmental remediation, which has reserves of $398 million with a possible additional loss of up to $415 million. The company is also involved in various lawsuits and legal proceedings, though management does not expect their ultimate resolution to have a material adverse effect. Commodity price volatility remains a significant factor affecting earnings and cash flows.

OXY/OXY-WT 10-Q Quarterly Report Q3 FY2006

Summary

Occidental Petroleum Corporation's (OXY) third quarter and nine-month results for 2006 demonstrate a significant increase in revenue and operating profit driven primarily by higher oil and gas prices and increased production volumes. The company successfully integrated the Vintage Petroleum acquisition, which is expected to contribute to long-term cash flow. Despite a challenging operating environment with higher production costs and environmental remediation reserves, Occidental's core business segments, Oil & Gas and Chemical, show robust performance. Key financial highlights include strong operating cash flow generation, driven by favorable commodity prices and increased production. The company also actively managed its capital structure through share repurchases and debt management. However, investors should note the impact of discontinued operations, particularly the Ecuador Block 15 situation, and ongoing environmental liabilities. The company's liquidity remains strong with substantial available credit facilities and cash on hand, supporting ongoing operations and capital expenditures.

Key Highlights

1Revenue increased significantly in both the third quarter and the first nine months of 2006, driven by higher oil and gas prices and increased production volumes.
2The acquisition of Vintage Petroleum has been integrated, adding assets in Argentina, the US, Yemen, and Bolivia, with expectations of significant long-term cash flow contributions.
3Strong operating cash flow of $4.8 billion for the nine months ended September 30, 2006, up from $3.8 billion in the prior year, reflects improved operational and market conditions.
4Shareholder returns were supported by a share repurchase program, with approximately 26.7 million shares repurchased for $1.3 billion in the first nine months of 2006.
5The company is actively managing its environmental liabilities, with reserves of $398 million for remediation and a reasonably possible additional loss of up to $415 million.
6Occidental experienced a significant charge related to the termination of its contract and seizure of assets in Ecuador (Block 15), which has been classified as discontinued operations.
7The Chemical segment showed improved performance with increased chlor-alkali volumes and higher margins, contributing to overall profitability.

OCCIDENTAL PETROLEUM CORP /DE/ Quarterly Report for Q3 Ended Sep 30, 2006

Summary

Key Highlights

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