OREANDA-NEWS. February 11, 2013. Occidental Petroleum Corporation (NYSE:OXY) announced core income of USD 1.5 billion (USD 1.83 per diluted share) for the fourth quarter of 2012, compared with USD 1.6 billion (USD 2.02 per diluted share) for the fourth quarter of 2011, reported the press-centre of Occidental Petroleum.

In the fourth quarter of 2012, we recorded after-tax charges of USD 1.1 billion or USD 1.41 per diluted share, almost all of which was related to the impairment of gas assets in the Midcontinent. Net income for the fourth quarter of 2012 after this charge was USD 336 million (USD 0.42 per diluted share), compared with USD 1.6 billion (USD 2.01 per diluted share) for the same period of 2011.

Core income was USD 5.8 billion (USD 7.09 per diluted share) for the year 2012, compared with USD 6.8 billion (USD 8.39 per diluted share) for 2011. Net income for the twelve months of 2012 was USD 4.6 billion (USD 5.67 per diluted share), compared with USD 6.8 billion (USD 8.32 per diluted share) for 2011.

In announcing the results, Stephen I. Chazen, President and Chief Executive Officer, said, "Our fourth quarter domestic production of 475,000 barrels of oil equivalent per day, of which 342,000 barrels per day was liquids, set a record for the ninth consecutive quarter. Our total company production for all of 2012 was 766,000 barrels of oil equivalent per day, which was 5 percent higher than 2011. Our domestic oil production grew by 11 percent for all of 2012 to 255,000 barrels per day from 230,000 barrels in 2011.

"Fourth quarter core income was USD 1.5 billion or USD 1.83 per diluted share. These results were USD 0.13 higher than the third quarter of 2012 as a result of higher liquids volumes, higher realized NGL and domestic gas prices and lower operating expenses. In the fourth quarter, our production costs were USD 1.04 a barrel lower than the third quarter, with improvements across most units. The reductions resulted from efficiencies achieved across most cost categories including savings in surface operations, reductions in the use of outside contractors, curtailment of uneconomic down-hole maintenance and workover activity, as well as related overhead. Our exit rate on a per barrel basis was well below the total year 2012 and below the fourth quarter 2011 levels. We generated cash flow from continuing operations before working capital changes of USD 12.1 billion for the twelve months of 2012 and invested USD 10.2 billion in capital expenditures."

QUARTERLY RESULTS
Oil and Gas
Oil and gas core earnings were USD 2.3 billion for the fourth quarter of 2012, compared with USD 2.5 billion for the fourth quarter of 2011. Lower 2012 earnings resulted from lower year-over-year prices across all products in the fourth quarter of 2012 and higher DD&A rates, partially offset by higher liquids volumes. After including the fourth quarter 2012 charges, which will be discussed in more detail on the earnings call, segment earnings were USD 522 million.

For the fourth quarter of 2012, daily oil and gas production volumes averaged 779,000 barrels of oil equivalent (BOE), compared with 748,000 BOE in the fourth quarter of 2011.

The fourth quarter 2012 production increase resulted from higher volumes of 26,000 BOE per day from domestic operations and 5,000 BOE per day from international production. The international increase included higher production in Iraq, Bahrain and Libya, partially offset by lower volumes from Dolphin, resulting from the full cost recovery of pre-startup capital, and in Yemen due to the Masila field contract expiration.

Daily sales volumes increased from 749,000 BOE in the fourth quarter of 2011 to 784,000 BOE in the fourth quarter of 2012.

Oxy’s realized price for worldwide crude oil was USD 96.19 per barrel for the fourth quarter of 2012, compared with USD 99.62 per barrel for the fourth quarter of 2011. The fourth quarter of 2012 realized oil price represents 109 percent of the average WTI and 87 percent of the average Brent price. Worldwide NGL prices were USD 45.08 per barrel in the fourth quarter of 2012, compared with USD 55.25 per barrel in the fourth quarter of 2011. Domestic gas prices decreased 14 percent from USD 3.59 per MCF in the fourth quarter of 2011 to USD 3.09 per MCF for the fourth quarter of 2012.

Fourth quarter 2012 realized prices were higher than third quarter 2012 prices for worldwide NGLs and domestic natural gas but were slightly lower for worldwide crude oil. On a sequential quarterly basis, prices increased 11 percent for NGLs and 25 percent for domestic natural gas and decreased less than 1 percent for worldwide crude oil.

Chemical
Chemical segment earnings for the fourth quarter of 2012 were USD 180 million, compared with USD 144 million in the fourth quarter of 2011. The increase was primarily the result of higher export volumes for caustic soda and vinyl chloride monomer and lower ethylene costs.

Midstream, Marketing and Other
Midstream segment earnings were USD 75 million for the fourth quarter of 2012, compared with \\$70 million for the fourth quarter of 2011.

TWELVE-MONTH RESULTS
Oil and Gas
Oil and gas core earnings were USD 8.8 billion for the twelve months of 2012, compared with USD 10.3 billion for the same period of 2011. The decrease in 2012 reflected lower NGL and natural gas prices, higher operating costs, exploration expense and DD&A rates, partially offset by higher oil prices and domestic volumes. Segment earnings, after including the fourth quarter charges, were USD 7.1 billion for 2012, compared with USD 10.2 billion for 2011.

Oil and gas production volumes for the twelve months were 766,000 BOE per day for 2012, compared with 733,000 BOE per day for the same period in 2011. Year-over-year, Oxy's domestic production increased by 9 percent, while total company production increased by 5 percent. Dolphin's full cost recovery of pre-startup capital, which reduced production, was the only operation where production sharing and similar contracts had an appreciable effect.

The twelve-month 2012 production increase resulted from 37,000 BOE per day in higher domestic volumes, partially offset by lower volumes in the Middle East/North Africa and Latin America.

Daily sales volumes were 764,000 BOE in the twelve months of 2012, compared with 731,000 BOE for the same period in 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 99.87 per barrel for the twelve months of 2012, compared with USD 97.92 per barrel for the twelve months of 2011. Worldwide NGL prices were USD 45.18 per barrel for the year 2012, compared with \\$55.53 per barrel for the year 2011. Domestic gas prices declined 35 percent, from USD 4.06 per MCF in the twelve months of 2011 to USD 2.62 per MCF in the twelve months of 2012.

Chemical
Chemical segment earnings were USD 720 million for the twelve months of 2012, compared with \\$861 million for the same period in 2011. The reduction was primarily a result of lower margins due to weaker economic conditions in Europe and Asia, and increased competitive activity from these regions. The calcium chloride and potassium hydroxide businesses were also negatively impacted by an extremely mild winter and drought conditions in the United States.

Midstream, Marketing and Other
Midstream segment earnings were USD 439 million for the twelve months of 2012, compared with \\$448 million for the same period in 2011.