What drove the substantial increase in Occidental Petroleum's second quarter earnings?

The significant increase in earnings was primarily driven by a dramatic rise in commodity prices, particularly for crude oil and natural gas. Occidental's Oil and Gas segment earnings more than doubled due to substantially higher realized prices and increased production volumes, partially offset by higher operating expenses and DD&A rates.

How did production levels change in the second quarter of 2008?

Occidental Petroleum saw an increase in daily oil and gas production, averaging 588,000 BOE per day in the second quarter of 2008, compared to 558,000 BOE per day in the same period of 2007. This growth was largely attributable to the Dolphin project and newly acquired domestic assets, though partially offset by production sharing contracts affected by high oil prices and a strike in Argentina.

What is the significance of 'core results' as presented by Occidental Petroleum?

Occidental Petroleum uses 'core results' as a non-GAAP measure to provide investors with a view of earnings performance that excludes significant transactions and events that vary unpredictably in nature, timing, and amount. This allows for a clearer comparison of ongoing operational performance between periods, although reported earnings are considered representative of management's long-term performance.

Were there any significant changes in the Chemicals or Midstream segments?

The Chemicals segment experienced a slight decrease in earnings from $158 million in Q2 2007 to $144 million in Q2 2008, attributed to lower volumes and margins for chlorine and polyvinyl chloride, partially offset by higher caustic soda margins. Conversely, the Midstream, Marketing and Other segment saw a substantial improvement, with earnings rising to $161 million from $25 million, boosted by increased pipeline income from the Dolphin project and higher margins in gas processing and marketing.

OXY/OXY-WT 8-K: Earnings & Results

Summary

Occidental Petroleum Corporation (OXY) reported a significant increase in its second quarter 2008 financial results compared to the prior year, driven primarily by its Oil and Gas segment. Net income more than doubled to $2.297 billion ($2.78 per diluted share) from $1.412 billion ($1.68 per diluted share) in the second quarter of 2007. This strong performance was fueled by substantially higher realized prices for crude oil and natural gas, which significantly boosted segment earnings. Furthermore, the company experienced an increase in oil and gas production, partly due to contributions from the Dolphin project and recently acquired domestic assets. While the Chemicals segment saw a slight decrease in earnings, the Midstream, Marketing and Other segment showed robust growth. The company also reported improved year-to-date (six months) results, with net income rising to $4.143 billion ($5.01 per diluted share) from $2.624 billion ($3.11 per diluted share) in the comparable period of 2007.

Key Highlights

1Q2 2008 net income surged to $2.297 billion ($2.78 per diluted share), a significant increase from $1.412 billion ($1.68 per diluted share) in Q2 2007.
2Oil and Gas segment earnings more than doubled year-over-year to $3.806 billion in Q2 2008, driven by record crude oil and higher natural gas prices.
3Worldwide crude oil realized price jumped to $110.12 per barrel in Q2 2008 from $59.11 per barrel in Q2 2007.
4Daily oil and gas production increased to 588,000 BOE per day in Q2 2008, up from 558,000 BOE per day in Q2 2007, with contributions from the Dolphin project and new acquisitions.
5Midstream, Marketing and Other segment earnings significantly improved to $161 million in Q2 2008 from $25 million in Q2 2007, benefiting from higher pipeline income and margins.
6Six-month net income reached $4.143 billion ($5.01 per diluted share) in 2008, compared to $2.624 billion ($3.11 per diluted share) in 2007.
7The company provided supplemental schedules and presentation materials to detail its financial performance and operational statistics.

OCCIDENTAL PETROLEUM CORP /DE/ 8-K Report, Financial Results (Jul 24, 2008)

Summary

Key Highlights

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