What drove the significant increase in net income for the fourth quarter of 2009?

The significant increase in net income for the fourth quarter of 2009 was primarily driven by the Oil and Gas segment. This improvement was due to higher realized crude oil prices and increased daily sales volumes, especially from new production in the Middle East/North Africa region, which more than offset a drop in domestic natural gas prices.

How did full-year 2009 results compare to 2008, and what were the main reasons for the difference?

Full-year 2009 net income was considerably lower than in 2008. While production volumes increased by 7% for the full year, this was not enough to offset the substantial decline in average commodity prices for both crude oil and natural gas. The Chemicals segment also contributed to the lower full-year earnings due to a weaker market.

What impact did asset impairments have on reported earnings?

Asset impairments did affect reported earnings, particularly in the Oil and Gas segment. For the fourth quarter of 2009, a pre-tax charge of $170 million for asset impairment was recorded. For the full year 2009, this charge was also $170 million. These impairments are excluded when calculating 'core results,' which Occidental uses to provide a view of performance excluding such significant, non-recurring items.

How did Occidental Petroleum's (OXY) capital expenditures change in 2009?

Occidental Petroleum reduced its capital expenditures in 2009. Full-year capital expenditures were $3.58 billion, down from $4.66 billion in the prior year (2008).

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

Summary

Occidental Petroleum Corporation (OXY) reported its fourth quarter and full-year 2009 financial results, showing a significant rebound in net income for the fourth quarter compared to the prior year. Fourth quarter 2009 net income was $938 million, or $1.15 per diluted share, a substantial increase from $443 million, or $0.55 per diluted share, in the fourth quarter of 2008. This improvement was primarily driven by the Oil and Gas segment, which saw its earnings rise due to higher crude oil prices and increased sales volumes, particularly in the Middle East/North Africa region. For the full year 2009, net income was $2.9 billion, or $3.58 per diluted share, a decrease from $6.9 billion, or $8.34 per diluted share, in 2008. This decline was largely attributable to lower commodity prices experienced throughout the year, although production volumes saw a modest increase. The Chemicals segment experienced a decline in earnings due to market weakness, while the Midstream segment also saw reduced earnings from lower marketing margins.

Key Highlights

1Fourth quarter 2009 net income of $938 million ($1.15 EPS) significantly increased from $443 million ($0.55 EPS) in Q4 2008.
2Full year 2009 net income of $2.9 billion ($3.58 EPS) was lower than $6.9 billion ($8.34 EPS) in 2008, primarily due to lower commodity prices.
3Oil and Gas segment earnings for Q4 2009 were $1.6 billion, up from $339 million in Q4 2008, driven by higher crude oil prices and increased sales volumes.
4Worldwide crude oil prices realized by OXY increased to $69.39 per barrel in Q4 2009 from $53.52 in Q4 2008.
5Daily oil and gas sales volumes increased by nearly 5% in Q4 2009 to 650,000 BOE per day, with notable growth in the Middle East/North Africa region.
6Chemical segment earnings declined in both Q4 and full-year 2009 due to continued weakness in domestic markets.
7Capital expenditures for full-year 2009 were $3.58 billion, down from $4.66 billion in 2008.

OCCIDENTAL PETROLEUM CORP /DE/ 8-K Report, Financial Results (Jan 28, 2010)

Summary

Key Highlights

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