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

The primary driver was the exceptional performance of the Oil and Gas segment, which benefited significantly from sharply higher crude oil and natural gas prices. Increased production volumes, particularly from the Dolphin project, also contributed to the strong results.

How did the company's production levels fare in the third quarter?

Overall daily oil and gas production increased to 588,000 BOE per day in the third quarter of 2008, up from 570,000 BOE per day in the same period of 2007. However, this was partially offset by a decrease of 5,000 BOE per day due to Hurricane Ike and 13,000 BOE per day in Libya because of a new contract.

What is the significance of the 'core results' mentioned in the filing?

Occidental Petroleum uses 'core results' as a non-GAAP measure to provide investors with a view of operational performance that excludes items like gains/losses from asset sales, exploration impairments, and other unusual or non-recurring events. This allows for a more consistent comparison of earnings between periods.

Were there any significant impacts on the Chemical or Midstream segments?

The Chemical segment experienced a modest increase in earnings, driven by higher caustic soda margins, although this was partially offset by lower volumes and margins for chlorine and polyvinyl chloride. The Midstream, Marketing and Other segment saw a slight decrease in earnings, mainly due to lower margins in crude oil marketing, though this was offset by higher pipeline income from Dolphin and increased gas processing and power generation margins.

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

Summary

Occidental Petroleum Corporation (OXY) reported a significant increase in its third-quarter 2008 financial results compared to the prior year, driven primarily by a surge in the Oil and Gas segment. Net income more than doubled to $2.271 billion, or $2.78 per diluted share, from $1.324 billion, or $1.58 per diluted share, in the third quarter of 2007. This performance was fueled by substantially higher crude oil and natural gas prices, as well as increased production volumes, particularly from the Dolphin project. The Chemical segment also showed modest growth, while the Midstream segment experienced a slight decline. For the nine-month period ended September 30, 2008, the company's performance mirrored the strong quarterly trend, with net income reaching $6.414 billion ($7.79 per diluted share) compared to $3.948 billion ($4.69 per diluted share) in the same period of 2007. The company highlighted its "core results" measure, which excludes certain one-time items, to provide a clearer view of operational performance. Despite a slight decrease in production due to Hurricane Ike and changes in Libya, overall production saw a year-over-year increase, underscoring the company's ability to capitalize on favorable commodity prices.

Key Highlights

1Occidental Petroleum reported a significant 71% increase in third-quarter net income to $2.271 billion ($2.78 per diluted share), up from $1.324 billion ($1.58 per diluted share) in Q3 2007.
2The Oil and Gas segment was the primary driver of growth, with earnings increasing from $1.955 billion to $3.618 billion, largely due to higher crude oil and natural gas prices.
3Worldwide crude oil realized prices surged to $104.15 per barrel in Q3 2008 from $67.81 in Q3 2007.
4Daily oil and gas production increased to 588,000 BOE per day in Q3 2008, up from 570,000 BOE per day in Q3 2007, despite some production impacts from Hurricane Ike and a new contract in Libya.
5The Chemical segment showed steady performance with earnings of $219 million in Q3 2008, a slight increase from $212 million in Q3 2007.
6For the nine months ended September 30, 2008, net income rose to $6.414 billion ($7.79 per diluted share) from $3.948 billion ($4.69 per diluted share) in the prior year.

OCCIDENTAL PETROLEUM CORP /DE/ 8-K Report, Financial Results (Oct 28, 2008)

Summary

Key Highlights

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