8-KEarnings & ResultsOther EventsExhibits & Filings

OCCIDENTAL PETROLEUM CORP /DE/ 8-K Report, Financial Results (Oct 29, 2013)

Filed October 29, 2013For Securities:OXYOXY-WT

Summary

Occidental Petroleum Corporation (OXY) reported its third quarter and nine-month results for 2013, showcasing a notable increase in profitability driven primarily by its Oil and Gas segment. For the third quarter, net income rose to $1.6 billion ($1.96 per diluted share) from $1.4 billion ($1.69 per diluted share) in the prior year, with core income also seeing an improvement. The Oil and Gas segment earnings significantly increased to $2.4 billion from $2.0 billion year-over-year, supported by higher domestic realized prices for oil and gas, reduced operating costs, and increased domestic liquid volumes, despite a dip in Middle East/North Africa production volumes. The Chemical and Midstream segments also contributed positively, with Chemical earnings growing to $181 million and Midstream segment earnings increasing to $212 million in the third quarter compared to the same period in 2012. This overall performance suggests operational improvements and a favorable pricing environment, particularly in domestic markets, which are key drivers for the company's financial health.

Key Highlights

  • 1Third quarter net income increased to $1.6 billion ($1.96 per diluted share) from $1.4 billion ($1.69 per diluted share) in Q3 2012.
  • 2Oil and Gas segment earnings grew by 19% year-over-year to $2.4 billion in Q3 2013.
  • 3Domestic oil and gas realized prices saw significant increases: crude oil up over 13% and natural gas up 32% in Q3 2013 compared to Q3 2012.
  • 4Company-wide operating costs decreased to $13.64 per barrel for the nine months of 2013, down from $14.99 per barrel for the full year 2012.
  • 5Chemical segment earnings improved to $181 million in Q3 2013 from $162 million in Q3 2012, driven by higher margins in polyvinyl chloride and vinyl chloride monomer.
  • 6Midstream segment earnings increased to $212 million in Q3 2013, up from $156 million in Q3 2012, reflecting improved marketing, trading, and pipeline operations.
  • 7Despite a slight decrease in Middle East/North Africa production volumes, overall daily oil and gas production remained stable year-over-year at approximately 767,000 BOE.

Frequently Asked Questions

The primary driver for the increase in Occidental Petroleum's earnings for the third quarter of 2013 was the strong performance of its Oil and Gas segment. This was fueled by higher domestic realized prices for oil and gas, reduced operating costs, and increased domestic liquid volumes.

Occidental Petroleum reported a significant reduction in operating costs. For the first nine months of 2013, domestic operating costs were $14.33 per barrel, down from $17.43 per barrel for the full year of 2012. Company-wide operating costs for the nine months were $13.64 per barrel, compared to $14.99 for the full year 2012.

Daily oil and gas production volumes remained stable, averaging 767,000 BOE for both the third quarter of 2013 and the third quarter of 2012. While domestic production increased, this was offset by lower production volumes from the Middle East/North Africa region.

Both the Chemical and Midstream segments showed year-over-year improvement in earnings for the third quarter of 2013. Chemical earnings increased to $181 million, driven by higher margins in polyvinyl chloride and vinyl chloride monomer. Midstream segment earnings rose to $212 million, benefiting from improved marketing, trading, and pipeline operations.