General (Policies)

3 Months Ended

Mar. 31, 2020

DISCONTINUED OPERATIONS

In connection with the Acquisition, Occidental entered into a purchase and sale agreement with TOTAL S.A. (Total) to sell all of the assets, liabilities, businesses, and operations of Anadarko's operations in Algeria, Ghana, Mozambique and South Africa (collectively, the Africa Assets) for $8.8 billion, subject to certain purchase price adjustments. Occidental completed the sale of the Mozambique assets in September 2019 and the South Africa assets in January 2020. The closing of the sale of the remaining Africa Assets, in Algeria and Ghana, remained conditioned on the receipt of required regulatory and government approvals, as well as other customary closing conditions. The assets and liabilities for Algeria and Ghana are presented as held for sale at March 31, 2020. The results of operations of the Africa Assets are presented as discontinued operations, see Note 3 - Dispositions and Other Transactions.

In April 2020, subsequent to communications with Algerian government officials, Occidental determined that the sale of the Algeria assets to Total will likely not be consummated. As such, beginning in the second quarter of 2020, Occidental will no longer classify the Algeria operations as a discontinued operation and will reclassify prior periods to reflect the Algerian operations as continuing operations. In addition, the carrying value of the Algeria assets will be remeasured at the lower of its fair value or the carrying amount as if depreciation, depletion and amortization (DD&A) were recorded from the date of the Acquisition. Any adjustment to reflect this remeasurement will be recorded in the second quarter of 2020.

In addition, if the Algeria asset sale is not completed, Total will not be obligated to complete the acquisition of the Ghana assets under the purchase and sale agreement; however, Occidental and Total are continuing to have discussions regarding the potential sale of the Ghana assets. Unless otherwise indicated, information presented in the Notes to the Consolidated Condensed Financial Statements relates only to Occidental's continuing operations. Information related to discontinued operations is included in Note 3 - Dispositions and Other Transactions, and in some instances, where appropriate, is included as a separate disclosure within the individual Notes to the Consolidated Condensed Financial Statements.

Cash Equivalents and Restricted Cash Equivalents

Occidental considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents or restricted cash equivalents.

Accounting and Disclosure Changes


NOTE 2 - ACCOUNTING AND DISCLOSURE CHANGES

In January 2020, Occidental adopted Accounting Standards Update (ASU) 2016-13 Financial Instruments - Credit Losses (Topic 326). The new standard makes significant changes to the accounting for credit losses on financial assets and disclosures regarding credit losses. For trade receivables, loans and held-to-maturity debt securities, entities will be required to estimate lifetime expected credit losses. This will result in the earlier recognition of credit losses than the current incurred loss model. The acceleration of the recognition of losses is more material for entities whose receivables and other held-to-maturity debt investments are (1) long dated and (2) with less credit worthy counterparties.

The vast majority of Occidental's receivables are short dated with maturities of less than 60 days with creditworthy counterparties, including refiners, pipelines and resellers. Given Occidental’s continued effort to maintain a strong credit portfolio, there have been no negative indications regarding the collectability of these receivables as of the date of this filing. Therefore, adoption of this standard has no material impact for the quarter. Occidental will continue to assess the risk to its receivables in the future.

In January 2020, Occidental adopted ASU 2017-4 Intangibles, Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The new standard simplifies the accounting for goodwill impairment by requiring a single step impairment test, whereby the impairment equals the difference between the carrying amount and the estimated fair value of the specified units in their entirety, see Note 7 - Fair-Value Measurements for the results of this simplified goodwill impairment test.