Occidental Petroleum Announces 3rd Quarter and Nine Months 2014 Financial Results

HOUSTON—(BUSINESS WIRE)—Occidental
Petroleum Corporation (NYSE:OXY) announced core income for the third
quarter of 2014 of $1.2 billion ($1.58 per diluted share), compared with
$1.6 billion ($1.97 per diluted share) for the third quarter of 2013.
Reported income was $1.2 billion ($1.55 per diluted share) for the third
quarter of 2014, compared with $1.6 billion ($1.96 per diluted share)
for the third quarter of 2013.

In announcing the results, Stephen I. Chazen, President and Chief
Executive Officer, said, “For the fifth consecutive quarter, we have
delivered strong year-over-year domestic oil production growth,
bolstered by strong results from Permian Resources, which grew by over
26 percent. Domestic oil production was 282,000 barrels per day for the
third quarter of 2014. Excluding the effect of the Hugoton sale,
domestic oil production increased 20,000 barrels per day from the third
quarter of 2013. During the quarter, we have experienced about a 6
percent decline in our worldwide oil realized prices, due to volatility
in the marker prices. For the first nine months of 2014, our cash flow
from operations was $8.2 billion. Capital expenditures, net of
contributions from partners, were $7.3 billion and we purchased
approximately 21.2 million shares of our stock.”

QUARTERLY RESULTS

Oil and Gas

Domestic core earnings were $844 million pre-tax or $538 million
after-tax for the third quarter of 2014, compared to $1.2 billion
pre-tax or $790 million after-tax for the third quarter of 2013. The
current quarter domestic results reflected lower crude oil realized
prices, higher operating costs and DD&A expense, partially offset by
higher crude oil volumes. The increase in domestic operating costs was
due to increased downhole maintenance and surface operations activities
as well as higher costs for carbon dioxide, steam and power.
International core earnings were $1.1 billion pre-tax or $624 million
after-tax for the third quarter of 2014, compared to $1.2 billion
pre-tax or $619 million after-tax for the third quarter of 2013. The
current quarter international results primarily reflected lower crude
oil realized prices and volumes, due to the timing of liftings.

For the third quarter of 2014, total company average daily oil and gas
production volumes, excluding Hugoton production, increased by 6,000
barrels of oil equivalent (BOE) to 755,000 BOE from 749,000 BOE in the
third quarter of 2013. Domestic average daily production increased by
17,000 BOE to 475,000 BOE in the third quarter of 2014, compared to
458,000 BOE in the third quarter of 2013. Domestic average daily oil
production increased by 20,000 barrels to 282,000 barrels in the third
quarter of 2014 from 262,000 barrels in the third quarter of 2013,
primarily from Permian Resources and California. International average
daily production decreased to 280,000 BOE in the third quarter of 2014
from 291,000 BOE in third quarter of 2013. The decrease primarily
resulted from continued field and port strikes in Libya and lower cost
recovery barrels in Iraq. Total company average daily sales volumes were
750,000 BOE and 747,000 BOE in the third quarters of 2014 and 2013,
respectively. Sales volumes were lower than production volumes due to
the timing of liftings in Middle East/North Africa.

Worldwide realized crude oil prices decreased by 9 percent to $94.68 per
barrel for the third quarter of 2014 compared with $103.95 per barrel
for the third quarter of 2013, and decreased by 6 percent compared with
$100.38 per barrel in the second quarter of 2014. Worldwide NGL prices
decreased by 1 percent to $40.26 per barrel in the third quarter of
2014, compared with $40.53 per barrel in the third quarter of 2013, and
decreased by 6 percent compared with $42.82 per barrel in the second
quarter of 2014. Domestic natural gas prices increased 20 percent in the
third quarter of 2014 to $3.91 per MCF, compared with $3.27 per MCF in
the third quarter of 2013, and fell by 9 percent compared with the $4.28
per MCF in the second quarter of 2014.

Chemical

Chemical pre-tax core earnings for the third quarter of 2014 were $140
million, compared to $181 million in the third quarter of 2013. The
third quarter 2014 results reflected lower caustic soda prices driven by
new chlor-alkali capacity in the industry and lower overall margins due
to higher ethylene and natural gas costs.

Midstream, Marketing and Other

Midstream pre-tax core earnings were $125 million for the third quarter
of 2014, compared with $212 million for the third quarter of 2013. The
decrease in earnings reflected lower trading performance.

NINE-MONTH RESULTS

Net income for the first nine months of 2014 was $4.0 billion ($5.13 per
diluted share), compared with $4.3 billion ($5.28 per diluted share) for
the same period in 2013. Core income for the first nine months of 2014
was $4.0 billion ($5.12 per diluted share), compared with $4.2 billion
($5.24 per diluted share) for the same period in 2013.

Oil and Gas

Domestic core earnings were $3.0 billion pre-tax or $1.9 billion
after-tax for the first nine months of 2014, compared to $3.1 billion
pre-tax or $2.0 billion after-tax for the first nine months of 2013. The
decrease in domestic core earnings reflected lower crude oil prices and
higher operating expenses and DD&A, partially offset by higher crude oil
volumes and improved realized prices for gas. The increase in domestic
operating costs was due to higher costs for carbon dioxide, steam and
power and higher downhole maintenance activities. International core
earnings were $3.3 billion pre-tax or $1.8 billion after-tax for the
first nine months of 2014, compared to $3.4 billion pre-tax or $1.8
billion after-tax for the first nine months of 2013. International core
earnings reflected lower crude oil realized prices and volumes, offset
by lower operating expenses.

Oil and gas daily production volumes, excluding Hugoton production, for
the first nine months of 2014 averaged 739,000 BOE, compared with
749,000 BOE for the first nine months of 2013. Average domestic daily
production increased by 8,000 BOE to 465,000 BOE for the first nine
months of 2014 from 457,000 BOE for the first nine months of 2013.
During this same time period, domestic daily oil production increased
nearly 7 percent or 17,000 barrels per day to 275,000 barrels.
International average daily production volumes decreased to 274,000 BOE
for the first nine months of 2014 from 292,000 BOE for the first nine
months of 2013. The decrease was primarily due to continued field and
port strikes in Libya, lower cost recovery barrels in Iraq and insurgent
activities in Colombia. Total company average daily sales volumes were
734,000 BOE and 740,000 BOE in the first nine months of 2014 and 2013,
respectively. Sales volumes were lower than production volumes due to
the timing of liftings in Middle East/North Africa.

Worldwide realized crude oil prices decreased by 2 percent to $97.98 per
barrel for the first nine months of 2014, compared with $100.04 per
barrel for the first nine months of 2013. Worldwide NGL prices rose by 8
percent to $43.02 per barrel for the first nine months of 2014, compared
with $39.87 per barrel for the first nine months of 2013. Domestic gas
prices increased by 26 percent to $4.26 per MCF for the first nine
months of 2014, compared to $3.39 per MCF for the first nine months of
2013.

Chemical

Chemical pre-tax core earnings were $409 million for the first nine
months of 2014, compared with $484 million for the same period of 2013,
excluding the $131 million pre-tax gain on the sale of our investment in
Carbocloro. The lower earnings resulted primarily from lower caustic
soda prices driven by new chlor-alkali capacity in the industry and
higher ethylene and natural gas costs, partially offset by higher vinyl
margins and volume improvements across most products.

Midstream, Marketing and Other

Midstream core earnings were $514 million for the first nine months of
2014, compared with $475 million for the same period of 2013. The
increase in earnings reflected improved marketing and trading
performance and higher income from the power generation business.

About Occidental Petroleum

Occidental
Petroleum Corporation is an international oil and gas exploration
and production company with operations in the United States, Middle
East/North Africa 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, including
any delay of, or other negative developments affecting, the spin-off of
California Resources Corporation; 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 2013
Form 10-K. Occidental posts or provides links to important information
on its website at www.oxy.com