8-KOther Events

OCCIDENTAL PETROLEUM CORP /DE/ 8-K Report (Jul 19, 2004)

Filed July 19, 2004For Securities:OXYOXY-WT

Summary

Occidental Petroleum Corporation (OXY) reported a significant increase in its second quarter 2004 financial performance, with net income soaring to $581 million ($1.48 per share) from $374 million ($0.98 per share) in the same period of 2003. This strong growth was driven by robust performance in both its Oil and Gas and Chemical segments. The Oil and Gas segment saw a substantial earnings jump due to higher crude oil and gas prices and increased sales volumes, despite rising operating expenses. The Chemical segment also showed marked improvement, benefiting from higher sales volumes and prices for key products, although offset by increased costs. Beyond financial results, the company announced notable senior management changes. Dr. Dale R. Laurance, President and head of oil and gas operations, will retire at the end of 2004 due to health reasons. In response, Occidental has promoted Stephen I. Chazen to Senior Executive Vice President and CFO, expanding his responsibilities to include oversight of chemical operations and investor relations. John W. Morgan will assume the role of President of Occidental Oil and Gas Corporation, overseeing all exploration and production, while R. Casey Olson will lead international business development as President of Occidental Development Company. These changes, effective immediately for some roles, position experienced leaders to guide the company forward under Chairman and CEO Dr. Ray R. Irani.

Key Highlights

  • 1OXY reported a 55% year-over-year increase in Q2 2004 net income to $581 million ($1.48 per share) from $374 million ($0.98 per share) in Q2 2003.
  • 2The Oil and Gas segment earnings grew significantly due to higher commodity prices and increased sales volumes, contributing $814 million in Q2 2004.
  • 3The Chemical segment also performed strongly, with earnings more than doubling to $85 million in Q2 2004, driven by higher sales volumes and prices for major products.
  • 4For the first six months of 2004, net income reached $1.07 billion ($2.72 per share), a substantial increase from $699 million ($1.84 per share) in the same period of 2003.
  • 5President and head of oil and gas operations, Dr. Dale R. Laurance, announced his retirement effective December 31, 2004, due to health reasons.
  • 6Stephen I. Chazen has been promoted to Senior Executive Vice President and CFO, with expanded oversight of chemical operations and investor relations.
  • 7John W. Morgan has been appointed President of Occidental Oil and Gas Corporation, responsible for all worldwide exploration and production.

Frequently Asked Questions

The primary drivers for the significant increase in Occidental Petroleum's second quarter 2004 earnings were higher worldwide crude oil and gas prices and increased sales volumes in its Oil and Gas segment, coupled with improved performance in its Chemical segment due to higher sales volumes and prices for key products.

Dr. Dale R. Laurance, President and head of oil and gas operations, is retiring at year-end 2004. Stephen I. Chazen has been promoted to Senior Executive Vice President and CFO with expanded responsibilities. John W. Morgan is now President of Occidental Oil and Gas Corporation, and R. Casey Olson is President of Occidental Development Company, focusing on international business development.

The Chemical segment saw a substantial improvement, with earnings rising to $85 million in Q2 2004 from $43 million in Q2 2003. This was primarily due to higher sales volumes for all major products and increased sales prices for vinyl chloride monomer, polyvinyl chloride, ethylene dichloride, and chlorine, partially offset by lower caustic soda prices and higher ethylene and energy costs.

Yes, Occidental Petroleum utilizes a non-GAAP measure called 'core earnings' which excludes significant transactions and events that can vary unpredictably. Management uses this measure to provide useful information for investors interested in comparing earnings performance between periods.