- Q1 2015 total company year-over-year
quarterly production grew 72,000 barrels of oil equivalent per day
or 13 percent to 645,000 barrels of oil equivalent per day
- Q1 2015 Permian Resources
year-over-year quarterly oil production growth of 68 percent and
total barrels of oil equivalent growth of 46 percent
- Dividend increased for the thirteenth
consecutive year from $2.88 to $3.00 annualized
Occidental Petroleum Corporation (NYSE:OXY) announced core
income for the first quarter of 2015 of $31 million ($0.04 per
diluted share), compared with $560 million ($0.72 per diluted
share) for the fourth quarter of 2014 and $1.1 billion ($1.38 per
diluted share) for the first quarter of 2014. The first quarter of
2015 had a reported loss of $218 million ($0.28 per diluted share),
compared with a loss of $3.4 billion ($4.41 per diluted share) for
the fourth quarter of 2014 and reported income of $1.4 billion
($1.75 per diluted share) for the first quarter of 2014. The first
quarter of 2015 included non-core charges of $249 million,
comprised mainly of asset impairment charges for certain domestic
and international assets.
Cash flow from continuing operations before working capital
changes was about $1.1 billion for the first quarter of 2015.
Working capital changes of $0.6 billion were a result of lower
realized prices, which impacted receivable collections and payments
related to higher capital and operating spending accrued in the
fourth quarter of 2014, but not paid until the first quarter of
2015. Total company capital expenditures for the first quarter of
2015 were $1.7 billion. The Oil and Gas segment spent $1.5 billion,
with Permian Resources expenditures representing nearly 50 percent
of the total expenditures, and the remaining $200 million was split
between the Chemical and Midstream segments.
“Our first quarter production was 645,000 BOE per day, an
increase of 13 percent on a year-over-year basis or 72,000 BOE per
day,” said Stephen I. Chazen, President and Chief Executive
Officer. “The increase was led by Permian Resources which delivered
a 46-percent increase to 98,000 BOE per day, of which oil
production grew by 25,000 barrels a day. Based on our first quarter
results and a more optimistic outlook for the remainder of the
year, we are raising our guidance for 2015 average production to
grow between 60,000 and 80,000 BOE per day compared to the 2014
rate of 591,000 BOE per day. This is 20,000 BOE per day higher than
our previous outlook. We expect to be cash flow neutral for
operating cash flow after capital expenditures and dividend outlays
by the fourth quarter of this year at oil prices of roughly $60 a
barrel. This is driven by expected improvements in cost
efficiencies and continued production growth.”
QUARTERLY
RESULTSOil and
Gas
Domestic core after-tax results were a loss of $89 million for
the first quarter of 2015, compared to income of $412 million for
the first quarter of 2014. The current quarter domestic results
reflected significantly lower commodity prices for all products,
especially crude oil, partially offset by higher crude oil volumes
and lower DD&A expense. International core after-tax earnings
were $200 million for the first quarter of 2015, compared to $553
million for the first quarter of 2014. The current quarter
international results primarily reflected lower crude oil realized
prices.
For the first quarter of 2015, total company average daily oil
and gas production volumes increased by 72,000 barrels of oil
equivalent (BOE) to 645,000 BOE from 573,000 BOE in the first
quarter of 2014, which excludes Hugoton production. Domestic
average daily production increased by 24,000 BOE to 326,000 BOE in
the current quarter with the majority of the increase coming from
oil production, which grew by 25,000 barrels to 198,000 barrels per
day, substantially all coming from Permian Resources. The increase
in domestic oil production was partially offset by lower natural
gas production in the Midcontinent and Other regions. International
average daily production increased to 319,000 BOE in the first
quarter of 2015 from 271,000 BOE in first quarter of 2014.
Approximately half of the increase resulted from the impact of
production-sharing contracts due to the low crude oil price
environment, and the remainder from the commencement of production
for the Al Hosn Gas Project and operational improvements. Total
company average daily sales volumes grew from 562,000 BOE in the
first quarter of 2014 to 637,000 BOE in the same period of 2015.
Sales volumes were lower than production volumes mainly due to the
timing of liftings in Iraq, which have resumed in the second
quarter.
Worldwide commodity prices for the first quarter of 2015
continued to decline significantly from the fourth quarter of 2014.
The average quarterly WTI and Brent marker prices decreased to
$48.63 per barrel and $55.17 per barrel, respectively, compared to
$98.68 per barrel and $107.90 per barrel, respectively, for the
first quarter of 2014. Worldwide realized crude oil prices
decreased by 51 percent to $48.50 per barrel for the first quarter
of 2015, compared with $98.14 per barrel for the first quarter of
2014, and decreased by 32 percent, compared with $71.58 per barrel
in the fourth quarter of 2014. Worldwide NGL prices decreased by 57
percent to $17.96 per barrel in the first quarter of 2015, compared
with $41.70 per barrel in the first quarter of 2014, and decreased
by 34 percent, compared with $27.39 per barrel in the fourth
quarter of 2014. Domestic natural gas prices decreased 43 percent
in the first quarter of 2015 to $2.49 per MCF, compared with $4.39
per MCF in the first quarter of 2014, and fell by 30 percent,
compared with $3.56 per MCF in the fourth quarter of 2014.
Chemical
Chemical pre-tax core earnings for the first quarter of 2015
were $139 million, compared to $136 million in the first quarter of
2014. The slightly higher earnings were the result of margin
improvement across most product lines resulting from lower ethylene
and natural gas costs, offset primarily by lower caustic soda sales
volumes.
Midstream, Marketing
and Other
Midstream pre-tax core results were a loss of $5 million for the
first quarter of 2015, compared with income of $96 million for the
first quarter of 2014. The decrease in midstream earnings reflected
lower gas plant results due to the decline in NGL prices, lower
pipeline income as a result of lower Dolphin Pipeline gas sales and
reduced ownership in the Plains Pipeline GP as a result of the
fourth quarter 2014 sale of a portion of Occidental’s interest, and
lower marketing margins due to unfavorable Midland to Gulf Coast
spreads.
About Occidental
Petroleum
Occidental Petroleum Corporation is an international oil and gas
exploration and production company with operations in the United
States, Middle East region and Latin America. Headquartered in
Houston, Occidental is one of the largest U.S. oil and gas
companies, based on equity market capitalization. Occidental’s
midstream and marketing segment gathers, processes, transports,
stores, purchases and markets hydrocarbons and other commodities in
support of Occidental’s businesses. The company’s wholly owned
subsidiary OxyChem manufactures and markets chlor-alkali products
and vinyls.
Forward-Looking
Statements
Portions of this press release contain forward-looking
statements and involve risks and uncertainties that could
materially affect expected results of operations, liquidity, cash
flows and business prospects. Actual results may differ from
anticipated results, sometimes materially, and reported results
should not be considered an indication of future performance.
Factors that could cause results to differ include, but are not
limited to: global commodity pricing fluctuations; supply and
demand considerations for Occidental’s products;
higher-than-expected costs; the regulatory approval environment;
reorganization or restructuring of Occidental’s operations; not
successfully completing, or any material delay of, field
developments, expansion projects, capital expenditures, efficiency
projects, acquisitions or dispositions; lower-than-expected
production from development projects or acquisitions; exploration
risks; general economic slowdowns domestically or internationally;
political conditions and events; liability under environmental
regulations including remedial actions; litigation; disruption or
interruption of production or manufacturing or facility damage due
to accidents, chemical releases, labor unrest, weather, natural
disasters, cyber attacks or insurgent activity; failure of risk
management; changes in law or regulations; or changes in tax rates.
Words such as “estimate,” “project,” “predict,” “will,” “would,”
“should,” “could,” “may,” “might,” “anticipate,” “plan,” “intend,”
“believe,” “expect,” “aim,” “goal,” “target,” “objective,” “likely”
or similar expressions that convey the prospective nature of events
or outcomes generally indicate forward-looking statements. You
should not place undue reliance on these forward-looking
statements, which speak only as of the date of this release. Unless
legally required, Occidental does not undertake any obligation to
update any forward-looking statements, as a result of new
information, future events or otherwise. Material risks that may
affect Occidental’s results of operations and financial position
appear in Part I, Item 1A “Risk Factors” of the 2014 Form 10-K.
Occidental posts or provides links to important information on its
website at www.oxy.com.
Attachment 1 SIGNIFICANT TRANSACTIONS AND EVENTS
AFFECTING EARNINGS
Occidental's results of operations often
include the effects of significant transactions and events
affecting earnings that vary widely and unpredictably in nature,
timing and amount. Therefore, management uses a measure called
"core results," which excludes those items. This non-GAAP measure
is not meant to disassociate those items from management's
performance, but rather is meant to provide useful information to
investors interested in comparing Occidental's earnings performance
between periods. Reported earnings are considered representative of
management's performance over the long term. Core results is not
considered to be an alternative to operating income reported in
accordance with generally accepted accounting principles.
FIRST QUARTER 2015
Reported
Significant Core
($ millions) BEFORE TAX
ALLOCATIONS
Income Items Results Oil and Gas Domestic $
(513 ) $ 264 (a) $ (236 ) 13 (b) Foreign 249 46 (a) 295 Exploration
(2 ) (2 ) (266 ) 57 Chemical 139 139
Midstream, Marketing and Other (15 ) 10 (c) (5 ) Corporate
Interest expense (28 ) (28 ) Other (64 ) 14 (d) (39 ) 11 (b) Taxes
19 (112 ) (e) (93 ) Income (loss) from
continuing operations (215 ) 246 31 Discontinued operations, net
(3 ) 3 - Net Income (Loss) $
(218 ) $ 249 $ 31
Reported Significant Core
($ millions) AFTER TAX
ALLOCATIONS
Income Items Results Oil and Gas Domestic $
(266 ) $ 169 (a) $ (89 ) 8 (b) Foreign 154 46 (a) 200 Exploration
(2 ) (2 ) (114 ) 109 Chemical 88 88
Midstream, Marketing and Other - 4 (c) 4 Corporate Interest
expense (28 ) (28 ) Other (58 ) 12 (d) (39 ) 7 (b) Taxes
(103 ) (103 ) Income (loss) from
continuing operations (215 ) 246 31 Discontinued operations, net
(3 ) 3 - Net Income (Loss) $
(218 ) $ 249 $ 31 Diluted Earnings per Common
Share $ (0.28 ) $ 0.04
(a) Asset impairments and related
items.
(b) Loss on sale of assets.
(c) Phibro results.
(d) Spin-off and other costs. (e) Tax effect of pre-tax
adjustments.
Attachment 2 SIGNIFICANT
TRANSACTIONS AND EVENTS AFFECTING EARNINGS FIRST
QUARTER 2014
Reported Significant Core
($ millions) BEFORE TAX
ALLOCATIONS
Income Items Results Oil and Gas Domestic $
646 $ 646 Foreign 1,092 1,092 Exploration (19 ) (19 )
1,719 1,719 Chemical 136 136 Midstream, Marketing and
Other 162 $ (66 ) (c) 96 Corporate Interest expense (20 )
(20 ) Other (68 ) (68 ) Taxes (794 ) 26 (e)
(768 ) Income from continuing operations 1,135 (40 ) 1,095
Discontinued operations, net 255 (255 )
- Net Income $ 1,390 $ (295 ) $ 1,095
Reported Significant Core
($ millions) AFTER TAX
ALLOCATIONS
Income Items Results Oil and Gas Domestic $
412 $ 412 Foreign 553 553 Exploration (5 ) (5 ) 960
960 Chemical 86 86 Midstream, Marketing and Other 111
$ (40 ) (c) 71 Corporate Interest expense (20 ) (20 ) Other
(68 ) (68 ) Taxes 66 66
Income from continuing operations 1,135 (40 ) 1,095
Discontinued operations, net 255 (255 )
- Net Income $ 1,390 $ (295 ) $ 1,095
Diluted Earnings per Common Share $ 1.75 $ 1.38
(c) Phibro results. (e) Tax effect of pre-tax adjustments.
Attachment 3 CONSOLIDATED CONDENSED BALANCE
SHEETS March 31 December 31 (in millions)
2015 2014
ASSETS
CURRENT ASSETS Cash and cash equivalents $ 2,153 $ 3,789
Restricted cash 3,265 4,019 Trade receivables, net 3,068 4,206
Inventories 1,133 1,052 Other current assets 815
807 Total current assets 10,434
13,873 INVESTMENTS Investments in unconsolidated
entities 1,221 1,171 Available for sale investment 544
394 Total investments 1,765
1,565 PROPERTY, PLANT AND EQUIPMENT, NET
40,109 39,730 LONG-TERM
RECEIVABLES AND OTHER ASSETS, NET 1,081 1,091
TOTAL ASSETS $ 53,389 $ 56,259
LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT
LIABILITIES Current maturities of long-term debt $ 700 $ - Accounts
payable 3,867 5,229 Accrued liabilities 2,152 2,601 Domestic and
foreign income taxes 196 414 Total
current liabilities 6,915 8,244
LONG-TERM DEBT, NET 6,139 6,838
DEFERRED CREDITS AND OTHER LIABILITIES Deferred and domestic and
foreign income taxes 2,947 3,015 Other 3,224
3,203 6,171 6,218 STOCKHOLDERS' EQUITY Common stock
178 178 Treasury stock (8,734 ) (8,528 ) Additional paid-in capital
7,632 7,599 Retained earnings 35,294 36,067 Accumulated other
comprehensive income (206 ) (357 ) Total
stockholders' equity 34,164 34,959
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $
53,389 $ 56,259
Attachment 4 SUMMARY
OF EPS, NET SALES, CASH FLOW NET SALES First
Quarter
($ millions) 2015 2014
SEGMENT NET
SALES Oil and Gas
$ 2,009 $ 3,602 Chemical
1,000 1,220 Midstream, Marketing and Other
197 340
Eliminations
(117 ) (194 ) Net
Sales
$ 3,089 $ 4,968
EARNINGS PER SHARE First Quarter
($ per-share
amounts) 2015 2014
BASIC EARNINGS PER COMMON
SHARE Income (loss) from continuing operations
$
(0.28 ) $ 1.43 Discontinued operations, net
- 0.32
$ (0.28 ) $
1.75
DILUTED EARNINGS PER COMMON SHARE Income
(loss) from continuing operations
$ (0.28 ) $
1.43 Discontinued operations, net
-
0.32
$ (0.28 ) $ 1.75
AVERAGE
COMMON SHARES OUTSTANDING BASIC
769.6 791.3 DILUTED
769.6 791.7
CONDENSED STATEMENTS OF CASH FLOWS First Quarter
($
millions) 2015 2014
Net income (loss) $
(218 ) $ 1,392 Depreciation, depletion and
amortization of assets
1,029 977 Deferred income tax
provision
(63 ) 125 Asset impairments and other non
cash charges
373 (200 )
Operating
cash flow before working capital 1,121 2,294 Working
capital changes
(555 ) (252 ) Discontinued operations
(5 ) 655
Net cash provided by
operating activities 561 2,697
Capital expenditures
(1,675 ) (1,794 )
Partner and joint venture
contributions
(60 ) 63
Capital
expenditures, net (a) (1,735 ) (1,731 )
Cash dividends
(557 ) (514 ) Purchase of treasury
stock
(207 ) (946 ) Other investing activities (b)
(471 ) (519 ) Other financing activities
19 (48 )
Decrease in cash (2,390
) (1,061 ) Cash beginning of the period
7,808
3,393 Cash end of the period
5,418
2,332
Less: Restricted Cash 3,265
-
Cash and Cash Equivalents $
2,153 $ 2,332
(a) Capital expenditures for 2014 includes
100 percent of the capital for BridgeTex Pipeline, which was being
consolidated in Oxy's financial statements. The BridgeTex Pipeline
was sold in November 2014. Partner contributions represents our
partner's share of the BridgeTex capital and our contributions for
the Chemical joint venture cracker project.
(b) Other investing for the first quarter
of 2015 mainly includes changes in capital accruals for amounts
paid in the first quarter of 2015 related to capital accruals
incurred in the fourth quarter of 2014. Other investing for first
quarter of 2014 includes $479 million of investing cash flows from
discontinued operations.
Attachment 5 SUMMARY OF OPERATING STATISTICS -
REALIZED PRICES First Quarter
2015 2014
United States Oil ($/BBL)
$ 43.66 $
92.56 NGLs ($/BBL)
$ 17.32 $ 42.06 Natural gas
($/MCF)
$ 2.49 $ 4.39
Latin America Oil
($/BBL)
$ 47.70 $ 98.53 Natural gas ($/MCF)
$
4.53 $ 10.81
Middle East/North Africa Oil
($/BBL)
$ 53.98 $ 104.65 NGLs ($/BBL)
$
21.57 $ 38.43
Total Worldwide Oil ($/BBL)
$ 48.50 $ 98.14 NGLs ($/BBL)
$ 17.96 $
41.70 Natural gas ($/MCF)
$ 1.66 $ 2.90
Index Prices WTI Oil ($/BBL)
$ 48.63 $ 98.68
Brent Oil ($/BBL)
$ 55.17 $ 107.90 Natural gas
($/MCF)
$ 3.07 $ 4.66
Realized Prices as
Percentage of Index Prices Worldwide oil as percentage of WTI
100 % 99 % Worldwide oil as percentage of Brent
88 % 91 % Worldwide NGLs as percentage of WTI
37 % 42 % Domestic natural gas as a percentage of
NYMEX
81 % 94 %
Attachment 6 SUMMARY OF OPERATING
STATISTICS - PRODUCTION AND SALES (MBOE) First Quarter
2015 2014
PRODUCTION PER DAY United
States Permian Resources
98 67 Permian EOR
145
145 Midcontinent and other
83 90
Total
326 302
Latin America 40 31
Middle East/North Africa Al Hosn
9 - Dolphin
39 34 Oman
89 73 Qatar
64 68 Other
78 65 Total
279 240
Total Production excluding Hugoton 645 573 Hugoton
- 18
Total Production
645 591 First Quarter
SALES VOLUMES PER DAY 2015 2014
United
States 326 302
Latin America 38 34
Al Hosn
9 - Dolphin
40 34 Oman
89 72
Qatar
67 71 Other
68 49
Middle East/North Africa 273 226
Total
Sales excluding Hugoton 637 562 Hugoton
-
18
Total Sales 637
580
(a) Natural gas volumes have been
converted to barrels of oil equivalent (BOE) based on energy
content of six thousand cubic feet (MCF) of gas to one barrel of
oil.
Attachment 7 SUMMARY OF OPERATING STATISTICS - NET
OIL, LIQUIDS AND GAS PRODUCTION PER DAY First
Quarter
2015 2014
United States Oil
(MBBL) Permian Resources
62 37 Permian EOR
111 110
Midcontinent and Other
25 26
Total excluding Hugoton
198 173 Hugoton
- 6 Total
198 179 NGLs (MBBL) Permian Resources
14 11
Permian EOR
28 28 Midcontinent and Other
11
14 Total excluding Hugoton
53 53
Hugoton
- 3 Total
53 56
Natural Gas (MMCF) Permian Resources
130 115 Permian
EOR
37 38 Midcontinent and Other
280
305 Total excluding Hugoton
447 458 Hugoton
- 52 Total
447 510
Latin America Oil (MBBL) - Colombia
38 29
Natural Gas (MMCF) - Bolivia
12 12
Middle East /
North Africa Oil (MBBL) Al Hosn
2 - Dolphin
7 6
Oman
80 66 Qatar
64 68 Other
37
27 Total
190 167 NGLs (MBBL) Al Hosn
2 - Dolphin
7 6 Total
9 6 Natural Gas (MMCF) Al Hosn
30 - Dolphin
150 131 Oman
56 40 Other
245
231 Total
481 402
Total Production
excluding Hugoton (MBOE) 645 573 Hugoton
-
18
Total Production (MBOE)
645 591
Occidental Petroleum CorporationMedia:Melissa E.
Schoeb713-366-5615melissa_schoeb@oxy.comorInvestors:Christopher M.
Degner212-603-8111christopher_degner@oxy.comOn the web:
www.oxy.com
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