OREANDA-NEWS. July 31, 2012. Occidental Petroleum Corporation (NYSE:OXY) announced net income of USD 1.3 billion (USD 1.64 per diluted share) for the second quarter of 2012, compared with the second quarter of 2011 net income of USD 1.8 billion (USD 2.23 per diluted share), reported the press-centre of Occidental Petroleum.

In announcing the results, Stephen I. Chazen, President and Chief Executive Officer, said, "Our second quarter 2012 total Company production of 766,000 barrels of oil equivalent per day was the second consecutive quarter of record production. Our domestic production was 9 percent higher than the second quarter of 2011 and total production was 7 percent higher. Our domestic production of 462,000 barrels of oil equivalent per day was a record for the seventh consecutive quarter. We increased our daily domestic production by 7,000 barrels from the first quarter of 2012 and by 38,000 barrels from the second quarter of 2011.

"Lower product prices impacted our second quarter results, resulting in diluted EPS of USD 1.64 per share. We generated cash flow from operations of USD 6.0 billion for the first six months of 2012 and invested USD 5.1 billion in capital expenditures."

Oil and Gas
Oil and gas segment earnings were USD 2.0 billion for the second quarter of 2012, compared with USD 2.6 billion for the second quarter of 2011. Lower oil and gas prices, higher operating costs and higher DD&A rates in the second quarter of 2012 were partially offset by higher volumes.

For the second quarter of 2012, daily oil and gas production volumes averaged 766,000 barrels of oil equivalent (BOE), compared with 715,000 BOE in the second quarter of 2011.

The second quarter 2012 production increase resulted from 38,000 BOE per day higher domestic volumes and a 13,000 BOE per day increase in the Middle East/North Africa.

Daily sales volumes increased from 705,000 BOE in the second quarter of 2011 to 759,000 BOE in the second quarter of 2012.

Oxy’s realized price for worldwide crude oil was USD 99.34 per barrel for the second quarter of 2012, compared with USD 103.12 per barrel for the second quarter of 2011. The second quarter of 2012 realized oil price represents 106 percent of the average WTI and 91 percent of the average Brent price for the quarter. Worldwide NGL prices were USD 42.06 per barrel in the second quarter of 2012, compared with USD 57.67 per barrel in the second quarter of 2011. Domestic gas prices decreased 51 percent from USD 4.27 per MCF in the second quarter of 2011 to USD 2.09 per MCF for the second quarter of 2012.

Second quarter 2012 realized prices were also lower than first quarter 2012 prices for all our products. On a sequential quarterly basis, price decreases were 8 percent for worldwide crude oil, 20 percent for worldwide NGLs and 26 percent for domestic natural gas.

Chemicals
Chemical segment earnings for the second quarter of 2012 were USD 194 million, compared with USD 253 million in the second quarter of 2011. The year-over-year decrease was the result of lower domestic and export caustic volumes, lower vinyl chloride monomer (VCM) export demand, and lower polyvinyl chloride and VCM export prices, partially offset by lower natural gas and ethylene costs.

Midstream, Marketing and Other
Midstream segment earnings were USD 77 million for the second quarter of 2012, compared with USD 187 million for the second quarter of 2011. The results predominantly reflect lower margins in the marketing and trading businesses and the gas processing businesses, partially offset by higher income in the pipeline businesses.

SIX-MONTH RESULTS
Year-to-date 2012 core income was USD 2.9 billion USD 3.56 per diluted share), compared with USD 3.4 billion (USD 4.19 per diluted share) for the same period in 2011. Net income for the first six months of 2012 was USD 2.9 billion (USD 3.55 per diluted share), compared with USD 3.4 billion USD 4.13 per diluted share) for the same period in 2011.

Oil and Gas
Oil and gas segment earnings were USD 4.5 billion for the six months of 2012, compared with USD 5.1 billion for the same period of 2011. The USD 600 million decrease in the 2012 results reflected lower NGL and natural gas prices, higher operating costs and higher DD&A rates, partially offset by higher oil prices and increased volumes.

Oil and gas production volumes for the six months were 760,000 BOE per day for 2012, compared with 723,000 BOE per day for the 2011 period. Year-over-year, our domestic production increased by 11 percent, while total production increased by 5 percent. Higher year-over-year average oil prices and other factors affecting our production-sharing and similar contracts lowered our Middle East/North Africa and Long Beach production by 7,000 BOE per day.

The six-month 2012 daily production volume increase resulted from 44,000 BOE higher domestic volumes, partially offset by lower volumes of 2,000 BOE in the Middle East/North Africa and 5,000 BOE in Latin America.

Daily sales volumes were 752,000 BOE in the first six months of 2012, compared with 717,000 BOE for 2011.

Oxy's realized prices improved for crude oil but declined for natural gas and NGLs on a year-over-year basis. Worldwide crude oil prices were USD 103.63 per barrel for the six months of 2012, compared with USD 97.38 per barrel for the six months of 2011. Worldwide NGL prices were USD 47.52 per barrel for the six months of 2012, compared with USD 55.38 per barrel in the six months of 2011. Domestic gas prices declined 42 percent, from USD 4.24 per MCF in the six months of 2011 to USD 2.46 per MCF in the six months of 2012.

Chemicals
Chemical segment earnings were USD 378 million for the six months of 2012, compared with USD 472 million for the same period in 2011. The 2012 six-month reduction was primarily a result of lower export volumes and prices due to the weakening economic conditions in Europe and Asia, partially offset by lower energy costs.

Midstream, Marketing and Other
Midstream segment earnings were USD 208 million for the six months of 2012, compared with \\$301 million for the same period in 2011. The 2012 results reflect lower results in the marketing and trading business, the gas processing business and the power generation business, partially offset by improved results in the pipeline businesses.