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Occidental Announces 1st Quarter 2019 Results

Sunday, May 05, 2019 8:25 pm EST 

  • Returned over $800 million to shareholders through dividends and share repurchases
  • Exceeded pre-tax income guidance for both Chemical and Midstream and Marketing
  • Exceeded the high end of guidance with production of 719,000 BOE per day
  • Permian Resources production of 261,000 BOE per day
  • International production of 298,000 BOE per day exceeded guidance

HOUSTON – May 5, 2019 – Occidental Petroleum Corporation (NYSE:OXY) today announced net and core income for the first quarter of 2019 of $631 million, or $0.84 per diluted share. Net and core income for the fourth quarter of 2018 was $706 million, or $0.93 per diluted share, and $922 million, or $1.22 per diluted share, respectively.

“We’re proud to have completed another strong quarter with all three of our business segments performing exceptionally well. Occidental continues to execute on its returns-focused strategy of generating free cash flow and value-based production growth,” said President and Chief Executive Officer Vicki Hollub. “We returned approximately $800 million to shareholders in the first quarter through dividends and share repurchases.”

QUARTERLY RESULTS

Oil and Gas

Oil and gas pre-tax income for the first quarter of 2019 was $484 million, compared to $145 million for the prior quarter. Excluding impairment charges, oil and gas pre-tax core income for the fourth quarter of 2018 was $365 million. The increase in first quarter core income, compared to the prior quarter, reflected lower depreciation, depletion and amortization rates for 2019 as well as a positive non-cash mark-to-market adjustment on carbon dioxide purchase contracts.

Total average daily production volumes exceeded guidance at 719,000 barrels of oil equivalent (BOE) for the first quarter of 2019, compared to 700,000 BOE for the fourth quarter of 2018. Permian Resources average daily production volumes came in at the high end of guidance at 261,000 BOE for the first quarter of 2019, an increase of 4 percent from the prior quarter due to improved well performance and development activity. Year-over-year, Permian Resources production for the first quarter of 2019 increased by 47 percent. International average daily production volumes exceeded guidance at 298,000 BOE for the first quarter of 2019, compared to 290,000 BOE for the fourth quarter of 2018, due to increased production in Oman.

For the first quarter of 2019, average WTI and Brent marker prices were $54.90 per barrel and $63.90 per barrel, respectively. Average worldwide realized crude oil prices decreased by 6 percent from the prior quarter to $52.62 per barrel in the first quarter of 2019. Average worldwide realized NGL prices decreased by 21 percent from the prior quarter to $18.14 per BOE in the first quarter of 2019.

Chemical

Chemical pre-tax income for the first quarter of 2019 was $265 million, compared to $223 million for the fourth quarter of 2018. The increase in income reflected favorable feedstock costs, primarily ethylene and natural gas, along with fees received under a pipeline easement agreement executed in the first quarter of 2019, partially offset by lower realized caustic soda pricing and demand. In addition, production in the first quarter of 2019 was negatively impacted by a third-party tank farm fire in Deer Park, Texas, as various operations were curtailed. These facilities have resumed safe operations.

Midstream and Marketing

Midstream and marketing pre-tax income for the first quarter of 2019 was $279 million, compared to $675 million for the fourth quarter of 2018. The decrease in income reflected lower Midland-to-Gulf-Coast spreads as well as non-cash mark-to-market losses in the first quarter of 2019.

Conference Call Information

Occidental has moved its conference call to Monday, May 6, 2019, at 8 a.m. Eastern/7 a.m. Central. The conference call may be accessed by calling 1-866-871-6512 (international callers dial 1-412-317-5417) or via webcast at oxy.com/investors. A recording of the webcast will be posted on the Investor Relations section of the website within several hours after the call is completed.

Supplemental Non-GAAP Measures

This press release refers to core income and cash flow from operations before working capital, which are supplemental measures not calculated in accordance with generally accepted accounting principles in the United States (GAAP). Definitions and reconciliations of these non-GAAP measures to the most directly comparable financial measures calculated in accordance with GAAP are included in the financial schedules of this press release. Occidental’s definition of these non-GAAP measures may differ from similarly titled measures provided by other companies in our industry and as a result may not be comparable.

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; not successfully completing, or any material delay of, field developments, expansion projects, capital expenditures, efficiency projects, acquisitions or dispositions; technological developments; uncertainties about the estimated quantities of oil and natural gas reserves; lower-than-expected production from operations, development projects or acquisitions; exploration risks; general economic slowdowns domestically or internationally; political conditions and events; liability under environmental regulations including remedial actions; litigation; actions by third parties, including service providers; 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 to risk management; and changes in laws, regulations or tax rates.

Such factors also include the ultimate outcome of any possible transaction between Occidental and Anadarko, including the possibility that Anadarko will reject the proposed transaction with Occidental or that the terms of any definitive agreement will be materially different from those described herein; uncertainties as to whether Anadarko will cooperate with Occidental regarding the proposed transaction; Occidental’s ability to consummate the proposed transaction with Anadarko or the proposed transactions with Total S.A. (Total); the conditions to the completion of the proposed transactions, including the receipt of Anadarko stockholder approval for the proposed transaction between Occidental and Anadarko; that the regulatory approvals required for the proposed transactions may not be obtained on the terms expected or on the anticipated schedule or at all; Occidental’s ability to finance the proposed transaction with Anadarko, including completion of any contemplated equity investment; Occidental’s indebtedness, including the substantial indebtedness Occidental expects to incur in connection with the proposed transaction with Anadarko and the need to generate sufficient cash flows to service and repay such debt; Occidental’s ability to meet expectations regarding the timing, completion and accounting and tax treatments of the transactions contemplated by the binding agreement with Total; Occidental’s ability to meet expectations regarding the timing, completion and accounting and tax treatments of the proposed transaction with Anadarko; the possibility that Occidental may be unable to achieve expected synergies and operating efficiencies within the expected time-frames or at all and to successfully integrate Anadarko’s operations with those of Occidental; that such integration may be more difficult, time-consuming or costly than expected; that operating costs, customer loss and business disruption (including, without limitation, difficulties in maintaining relationships with employees, customers or suppliers) may be greater than expected following the proposed transaction or the public announcement of the proposed transaction; the retention of certain key employees of Anadarko may be difficult; that Anadarko and Occidental are subject to intense competition and increased competition is expected in the future; general economic conditions that are less favorable than expected.

Words such as “estimate,” “guidance,” “project,” “predict,” “will,” “would,” “should,” “could,” “may,” “might,” “anticipate,” “plan,” “strive,” “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 obligations 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 Occidental’s Annual Report on Form 10-K for the year ended December 31, 2018, and in Occidental’s other filings with the SEC.

No Offer or Solicitation

This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.

Additional Information and Where to Find It

This press release relates to a proposal which Occidental has made for an acquisition of Anadarko. In furtherance of this proposal and subject to future developments, Occidental (and, if a negotiated transaction is agreed, Anadarko) may file one or more registration statements, proxy statements, tender offer statements or other documents with the SEC. This press release is not a substitute for any proxy statement, registration statement, tender offer statement, prospectus or other document Occidental and/or Anadarko may file with the SEC in connection with the proposed transactions. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE PROXY STATEMENT(S), REGISTRATION STATEMENT(S), TENDER OFFER STATEMENT, PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC CAREFULLY IN THEIR ENTIRETY IF AND WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT OCCIDENTAL, ANADARKO AND THE PROPOSED TRANSACTIONS. Any definitive proxy statement(s) or prospectus(es) (if and when available) will be mailed to stockholders of Occidental and/or Anadarko, as applicable. Investors and security holders will be able to obtain copies of these documents (if and when available) and other documents filed with the SEC by Occidental free of charge through the website maintained by the SEC at www.sec.gov. Copies of the documents filed by Occidental (if and when available) will also be made available free of charge by accessing Occidental’s website at oxy.com.

Participants

This press release is neither a solicitation of a proxy nor a substitute for any proxy statement or other filings that may be made with the SEC. Nonetheless, Occidental and its directors and executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies in respect of the proposed transactions. Information about Occidental’s executive officers and directors is available in Occidental’s Annual Report on Form 10-K for the year ended December 31, 2018, which was filed with the SEC on February 21, 2019, and in its proxy statement for the 2019 Annual Meeting which was filed with the SEC on March 28, 2019. To the extent holdings of Occidental securities have changed since the amounts printed in the proxy statement for the 2019 Annual Meeting, such changes have been or will be reflected on Statements of Change in Ownership on Form 4 filed with the SEC. Additional information regarding the interests of such potential participants will be included in one or more registration statements, proxy statements, tender offer statements or other documents filed with the SEC if and when they become available. These documents (if and when available) may be obtained free of charge from the SEC’s website http://www.sec.gov.

About Occidental Petroleum

Occidental is an international oil and gas exploration and production company with operations in the United States, Middle East 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 purchases, markets, gathers, processes, transports and stores hydrocarbons and other commodities. The company’s wholly owned subsidiary OxyChem manufactures and markets basic chemicals and vinyls. Occidental posts or provides links to important information on its website at oxy.com.

Contacts                                                

Media:

Melissa E. Schoeb
713-366-5615
melissa_schoeb@oxy.com

or

Investors:

Jeff Alvarez
713-215-7864
jeff_alvarez@oxy.com