What were the primary drivers of Occidental Petroleum's financial performance in the first quarter of 2014?

Occidental Petroleum's financial performance in Q1 2014 was primarily driven by higher domestic oil, gas, and NGL prices, along with increased worldwide oil volumes. These positives were partially offset by lower international oil prices, increased domestic operating costs, and higher depreciation, depletion, and amortization (DD&A) rates. Chemical segment earnings also declined due to lower caustic soda prices.

How is Occidental Petroleum managing its liquidity and capital resources?

The company maintained a strong liquidity position at the end of Q1 2014, with $2.3 billion in cash and an undrawn $2.0 billion credit facility. Net cash provided by operating activities remained stable at $2.7 billion for both Q1 2014 and Q1 2013. Occidental believes its cash on hand and operational cash flow are sufficient to cover operating needs, capital expenditures, dividends, and debt obligations.

What are the key risks and contingencies highlighted in the filing?

Key risks and contingencies include ongoing environmental remediation liabilities, with $322 million in reserves and a potential range of additional losses up to $395 million. The company is also involved in various lawsuits and legal proceedings, though it believes these will not materially affect its financial position. Tax audits in various jurisdictions are ongoing, but management does not expect a material adverse effect.

OXY/OXY-WT 10-Q Quarterly Report Q1 FY2014

Q: What significant strategic actions is Occidental Petroleum undertaking?

Occidental Petroleum is actively managing its portfolio. Key strategic actions include entering into an agreement to sell its Hugoton Field operations for $1.4 billion and initiating efforts to separate its California assets into an independent, publicly traded company. These moves suggest a focus on optimizing its asset base and potentially streamlining operations.

Summary

Occidental Petroleum Corporation (OXY) reported a slight increase in net income for the first quarter of 2014 compared to the same period in 2013, reaching $1.39 billion ($1.75 per diluted share) on net sales of $6.09 billion. This performance was driven by higher domestic oil, gas, and NGL prices and increased worldwide oil volumes, though partially offset by lower international oil prices and increased domestic operating costs. The company is actively managing its portfolio, having entered into an agreement to sell its Hugoton Field operations for approximately $1.4 billion and initiating efforts to separate its California assets into a new public company. These strategic moves indicate a focus on optimizing its asset base and exploring strategic growth avenues. The company maintained a strong liquidity position with $2.3 billion in cash and an undrawn $2.0 billion credit facility, indicating confidence in its ability to fund operations, capital expenditures, and shareholder distributions.

Financial Highlights

47 data points

Beta

Revenue

$4.97B

0.5% Gross Margin

Net Income

$1.39B

0.3% Net Margin

EPS (Diluted)

$1.75

Total Assets

$69.28B

Cash & Equivalents

$2.33B

Free Cash Flow

$903.00M

Financial Statements

Beta

Revenue	$4.97B
Cost of Revenue	$2.62B
Gross Profit	$2.35B
Operating Expenses	$317.00M
Operating Income	$1.14B
Net Income	$1.39B
EPS (Basic)	$1.75
EPS (Diluted)	$1.75
Shares Outstanding (Basic)	791.30M
Shares Outstanding (Diluted)	791.70M

Key Highlights

1Net income for Q1 2014 was $1.39 billion, a slight increase from $1.36 billion in Q1 2013, with diluted EPS of $1.75.
2Net sales increased to $6.09 billion in Q1 2014 from $5.87 billion in Q1 2013, driven by higher domestic commodity prices and production volumes.
3The company is pursuing strategic divestitures and separations, including the agreement to sell Hugoton Field operations for $1.4 billion and plans to spin off California assets.
4Capital expenditures were $2.27 billion in Q1 2014, primarily in the Oil and Gas segment ($1.8 billion) and Midstream/Marketing ($0.4 billion).
5Cash flow from operating activities remained stable at $2.7 billion for both Q1 2014 and Q1 2013.
6Significant share repurchases occurred in Q1 2014, totaling $0.95 billion, alongside $0.51 billion in dividend payments.
7Environmental remediation reserves stood at $322 million, with a potential range of additional losses up to $395 million.

OCCIDENTAL PETROLEUM CORP /DE/ Quarterly Report for Q1 Ended Mar 31, 2014

Summary

Financial Highlights

Key Highlights

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