OCCIDENTAL PETROLEUM CORP /DE/ Quarterly Report for Q3 Ended Sep 30, 2017

Summary

Occidental Petroleum Corporation reported a return to profitability in the first nine months of 2017, with net income of $814 million, a significant improvement from a net loss of $302 million in the same period of 2016. This turnaround was driven by higher oil and natural gas liquids (NGLs) prices, increased chemical sales prices, and gains from asset sales, notably the disposition of South Texas operations and non-strategic acreage. The company also benefited from lower depreciation, depletion, and amortization expenses and positive contributions from equity investments. Despite the overall positive financial performance, the third quarter of 2017 was impacted by Hurricane Harvey, which caused an estimated $70 million reduction in segment earnings and a slight dip in production. The company's balance sheet shows a decrease in total assets from $43.1 billion at the end of 2016 to $41.4 billion at September 30, 2017, largely due to depreciation and asset sales, while total liabilities also saw a slight decrease. Cash provided by operating activities increased substantially to $3.6 billion, supporting investing activities like capital expenditures and asset acquisitions, as well as financing activities primarily driven by dividend payments.

Key Highlights

• 1Occidental Petroleum reported a net income of $814 million for the first nine months of 2017, a substantial improvement from a net loss of $302 million in the prior year period.
• 2Net sales increased to $9.0 billion for the first nine months of 2017 from $7.3 billion in the comparable 2016 period, driven by higher commodity prices and chemical sales.
• 3The company recognized significant gains on asset sales, totaling $598 million for the nine months ended September 30, 2017, primarily from the sale of South Texas operations and Midland Basin acreage.
• 4Cash flow from operations significantly improved, reaching $3.6 billion for the nine months ended September 30, 2017, compared to $2.5 billion in the prior year.
• 5Capital expenditures were $2.4 billion for the first nine months of 2017, with a substantial portion allocated to the oil and gas segment.
• 6The company's balance sheet reflects a decrease in total assets to $41.4 billion and total liabilities to $25.1 billion as of September 30, 2017, compared to December 31, 2016.
• 7Hurricane Harvey negatively impacted the third quarter of 2017, reducing segment earnings by an estimated $70 million and affecting production.

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