What was Occidental Petroleum's net income for the nine months ended September 30, 2007, and how does it compare to the same period in 2006?

For the nine months ended September 30, 2007, Occidental Petroleum reported a net income of $3.9 billion, an increase from $3.3 billion reported for the same period in 2006. This represents a significant year-over-year improvement.

What were the main drivers of the increased net income in the first nine months of 2007?

The increase in net income was largely driven by strong performance in the oil and gas segment, benefiting from higher crude oil prices and increased production volumes. Additionally, significant gains from asset dispositions, including the sale of a Russian joint venture, transactions with BP, and the sale of Lyondell Chemical Company shares, substantially contributed to the higher net income.

How did Occidental Petroleum manage its cash flow and capital allocation during this period?

Occidental Petroleum generated $4.3 billion in net cash from operating activities for the first nine months of 2007. Capital expenditures totaled $2.5 billion, primarily for oil and gas projects. The company also returned capital to shareholders through dividend payments and share repurchases, totaling $557 million and $910 million respectively for the nine-month period.

What is the company's outlook regarding environmental liabilities and litigation?

Occidental Petroleum maintains reserves for environmental remediation, totaling $436 million at September 30, 2007, with a potential reasonably possible additional loss up to $400 million. The company is involved in various legal proceedings, including significant lawsuits in Nicaragua, which management believes are without merit and any judgments would be unenforceable in the U.S. While acknowledging the potential for material adverse effects from these matters, management does not expect the ultimate resolution to materially impact the company's financial position or results of operations.

OXY/OXY-WT 10-Q Quarterly Report Q3 FY2007

Summary

Occidental Petroleum Corporation reported solid financial performance for the nine months ended September 30, 2007, with net income rising to $3.9 billion from $3.3 billion in the prior year period, on slightly increased net sales of $13.3 billion. This growth was driven by strong performance in the oil and gas segment, which benefited from higher crude oil prices and increased production volumes, despite some offsetting factors like higher DD&A rates and operating expenses. The company also realized significant gains from asset dispositions, including the sale of its interest in a Russian joint venture and a series of transactions with BP, contributing substantially to its overall profitability. While the chemical segment experienced some margin pressure, particularly in polyvinyl chloride resins, the company's strategic asset management, including the sale of Lyondell Chemical Company shares and other divestitures, positively impacted its financial results. Occidental also continued its commitment to shareholder returns through dividend increases and significant share repurchases, funded by strong operating cash flow. The company maintained a healthy liquidity position with substantial cash and cash equivalents and available credit lines.

Key Highlights

1Net income increased to $3.9 billion for the first nine months of 2007, up from $3.3 billion in the same period of 2006.
2Net sales for the nine months ended September 30, 2007, were $13.3 billion, a slight increase from $13.1 billion in the prior year.
3Significant gains were realized from asset dispositions, including the sale of a Russian joint venture ($412 million after-tax) and transactions with BP ($226 million after-tax), along with the sale of Lyondell shares.
4The oil and gas segment showed improved earnings, driven by higher crude oil prices and increased production, despite higher DD&A and operating costs.
5The company returned value to shareholders through an increased quarterly dividend to $0.25 per share and repurchased approximately 17.4 million shares of common stock.
6Operating cash flow for the nine months was $4.3 billion, a decrease from $4.8 billion in the prior year, primarily due to lower chemical margins and reduced cash flow from discontinued operations.
7Capital expenditures for the first nine months of 2007 were $2.5 billion, with a significant portion allocated to oil and gas projects.

OCCIDENTAL PETROLEUM CORP /DE/ Quarterly Report for Q3 Ended Sep 30, 2007

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Key Highlights

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