EX-99.1 2 oxyexhibit991q22020for.htm EX-99.1 Document


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Occidental Announces 2nd Quarter 2020 Results

All business segments exceeded guidance and continued to deliver operational excellence
Combined production of 1,406 Mboed from continuing operations, exceeding midpoint of guidance by 36 Mboed 
Permian Resources exceeded high-end of guidance by 5 percent, producing 465 Mboed
OxyChem and Gulf of Mexico achieved all-time safety records
Significantly lowered cost structure by fully delivering acquisition cost synergies and additional cost savings
Achieved 2020 annualized run rate of $1.5 billion of total overhead savings, including $900 million of synergies and $600 million of additional cost reductions
Achieved 2020 annualized run rate of $800 million of operating cost reductions, including realizing $200 million in synergies and $600 million of additional cost savings
Extensive cost management coupled with strong production resulted in second quarter domestic operating expenses to come in below guidance at $4.69 per BOE
In July, raised $2.0 billion in senior unsecured debt and completed debt tender offer to retire $2.0 billion of 2021 debt maturities
HOUSTON — August 10, 2020 — Occidental (NYSE:OXY) today announced a net loss attributable to common stockholders for the second quarter of 2020 of $8.4 billion, or $9.12 per diluted share, and an adjusted loss attributable to common stockholders of $1.6 billion, or $1.76 per diluted share. Second quarter after-tax items affecting comparability included impairment charges of approximately $5.2 billion on oil and gas continuing operations and $1.4 billion in discontinued operations for total impairment charges of $6.6 billion.

“We continue to make progress on our debt structure and have significantly exceeded our cost savings targets while delivering operational excellence across our business,” said President and Chief Executive Officer Vicki Hollub. “These decisive financial and operational actions reflect our leadership as a low-cost operator, positioning us for success when market conditions improve.”








QUARTERLY RESULTS
Oil and Gas
Oil and gas pre-tax loss on continuing operations for the second quarter was $7.7 billion, compared to income of $236 million for the first quarter of 2020. The second quarter results included pre-tax impairment charges on continuing operations of approximately $4.3 billion for unproved domestic onshore acreage, $1.2 billion for proved domestic onshore and Gulf of Mexico oil and gas properties and $0.9 billion for international assets. On an after-tax basis, oil and gas impairments on continuing operations in the second quarter of 2020 were $5.2 billion. In addition, second quarter results were impacted by the steep decline in oil prices due to the continued significant drop in oil demand as governments around the world implemented measures to contain the spread of COVID-19. For the second quarter of 2020, average WTI and Brent marker prices were $27.85 per barrel and $33.26 per barrel, respectively. Average worldwide realized crude oil prices decreased by 51 percent from the prior quarter to $23.17 per barrel. Average worldwide realized NGL prices decreased by 40 percent from the prior quarter to $7.79 per BOE. Average domestic realized gas prices decreased by 24 percent from the prior quarter to $0.90 per Mcf.

Total average daily production volume of 1,406 thousands of barrels of oil equivalent per day (Mboed) for the second quarter exceeded the midpoint of guidance by 36 Mboed. Permian Resources produced 465 Mboed, exceeding the high-end of guidance by 5 percent. International average daily production volumes of 290 Mboed came within the guidance range.

OxyChem
Chemical pre-tax income for the second quarter of $108 million exceeded guidance by 35 percent. Compared to prior quarter income of $186 million, the decline in income resulted primarily from the negative impact of the COVID-19 pandemic on product demand. Operational spending at various facilities was lower in the second quarter offset by softening realized domestic and export PVC prices and volumes.

Midstream and Marketing
Midstream and marketing pre-tax loss for the second quarter was $7 million, compared to a loss of $1.3 billion for the first quarter of 2020. Excluding the WES goodwill charges from the first quarter of 2020, the decrease reflected mark-to-market gains in the marketing business, partially offset by higher equity investment income from WES. Excluding WES equity income, midstream and marketing pre-tax loss for the second quarter was $147 million.






Supplemental Non-GAAP Measure
This press release refers to adjusted income (loss), a supplemental measure not calculated in accordance with generally accepted accounting principles in the United States (GAAP). A definition of adjusted income (loss) and a reconciliation to net income (loss), the comparable GAAP financial measure, is included in the financial schedules of this press release. Occidental’s definition of adjusted income (loss) may differ from similarly titled measures provided by other companies in our industry and as a result may not be comparable.

About Occidental
Occidental is an international energy company with operations in the United States, Middle East, Africa and Latin America. We are the largest onshore oil producer in the U.S., including in the Permian Basin, and a leading offshore producer in the Gulf of Mexico. Our midstream and marketing segment provides flow assurance and maximizes the value of our oil and gas. Our chemical subsidiary OxyChem manufactures the building blocks for life-enhancing products. Our Oxy Low Carbon Ventures subsidiary is advancing leading-edge technologies and business solutions that economically grow our business while reducing emissions. We are committed to using our global leadership in carbon dioxide management to advance a lower-carbon world. Visit oxy.com for more information.

Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to statements about Occidental’s expectations, beliefs, plans or forecasts. All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, and they include, but are not limited to: any projections of earnings, revenue or other financial items or future financial position or sources of financing; any statements of the plans, strategies and objectives of management for future operations or business strategy; any statements regarding future economic conditions or performance; any statements of belief; and any statements of assumptions underlying any of the foregoing. 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 are generally indicative of forward-looking statements. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Unless legally required, Occidental does not undertake any obligation to update, modify or withdraw any forward-looking statements as a result of new information, future events or otherwise.





Although Occidental believes that the expectations reflected in any of our forward-looking statements are reasonable, actual results may differ from anticipated results, sometimes materially. Factors that could cause results to differ from those projected or assumed in any forward-looking statement include, but are not limited to: the scope and duration of the COVID-19 pandemic and actions taken by governmental authorities and other third parties in response to the pandemic; Occidental’s indebtedness and other payment obligations, including the need to generate sufficient cash flows to fund operations; Occidental’s ability to successfully monetize select assets, repay or refinance debt and the impact of changes to Occidental’s credit ratings; assumptions about energy markets and fluctuations in global and local commodity and commodity-futures prices; supply and demand considerations for, and the prices of, Occidental’s products and services; actions by the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC oil producing countries; results from operations and competitive conditions; unexpected changes in costs; availability of capital resources, levels of capital expenditures and contractual obligations; the regulatory approval environment; not successfully completing, or any material delay of, field developments, expansion projects, capital expenditures, efficiency projects, acquisitions or dispositions; uncertainties and liabilities associated with acquired and divested properties and businesses; risks associated with acquisitions, mergers and joint ventures, such as difficulties integrating businesses, uncertainty associated with financial projections, projected synergies, restructuring, increased costs and adverse tax consequences; uncertainties about the estimated quantities of oil, natural gas and natural gas liquids reserves; lower-than-expected production from development projects or acquisitions; Occidental’s ability to realize the anticipated benefits from prior or future streamlining actions to reduce fixed costs, simplify or improve processes and improve Occidental’s competitiveness; exploration, drilling or other operational risks; disruptions to, capacity constraints in, or other limitations on the pipeline systems that deliver Occidental’s oil and natural gas and other processing and transportation considerations; general economic conditions, including slowdowns, domestically or internationally, and volatility in the securities, capital or credit markets; uncertainty from the expected discontinuance of LIBOR and transition to any other interest rate benchmark; adverse tax consequences; governmental actions and political conditions and events; legislative or regulatory changes; environmental risks and liability under international, provincial, federal, regional, state, tribal, local and foreign environmental laws and regulations (including remedial actions); asset and goodwill impairments; 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; the creditworthiness and performance of our counterparties; failure of risk management; Occidental’s ability to retain and hire key personnel; reorganization or restructuring of Occidental’s operations; changes in tax rates; and actions by third parties that are beyond Occidental’s control. The unprecedented nature of the COVID-19 pandemic and recent market decline may make it more difficult to identify potential risks, give rise to risks that are currently unknown or amplify the impact of known risks.





Additional information concerning these and other factors can be found in Occidental’s filings with the U.S. Securities and Exchange Commission, including Occidental’s Annual Report on Form 10-K for the year ended December 31, 2019, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.

Contacts

Media
 Investors
Melissa E. Schoeb
Jeff Alvarez
713-366-5615
713-215-7864
melissa_schoeb@oxy.com
jeff_alvarez@oxy.com





Occidental Petroleum Corporation
2nd Quarter 2020
Earnings Release Schedules Index

Schedule # and Description

Before Tax Allocations
After Tax Allocations 
Reported Results
Items Affecting Comparability
Adjusted Results (non-GAAP)
Reported Results
Items Affecting Comparability
Adjusted Results (non-GAAP)
Reconciliation - Diluted EPS
Detail of Capital Expenditures and Depreciation, Depletion and Amortization
MBOE/D
By Commodity
MBOE/D
Realized Prices and Related Index Prices





SCHEDULE 1
Occidental Petroleum Corporation
Summary Highlights

20192020
QuarterlyQtr 1Qtr 2Qtr 3Qtr 4TYQtr 1Qtr 2Qtr 3Qtr 4YTD
Net Income (Loss) ($ millions)
Reported income (loss) attributable to common stockholders$631  $635  $(912) $(1,339) $(985) $(2,232) $(8,353) $(10,585) 
Reported EPS - Diluted ($/share)$0.84  $0.84  $(1.08) $(1.50) $(1.22) $(2.49) $(9.12) $(11.68) 
Effective tax rate on reported income (loss) (%)26 %33 %(28)%(19)%243 %%18 %15 %
Adjusted income (loss) attributable to common stockholders (Non-GAAP)(a)$631  $729  $93  $(269) $1,184  $(467) $(1,612) $(2,079) 
Adjusted EPS - Diluted (Non-GAAP) ($/share)(b)$0.84  $0.97  $0.11  $(0.30) $1.45  $(0.52) $(1.76) $(2.29) 
Effective tax rate on adjusted income (loss) (%)26 %30 %55 %92 %40 %(14)%15 %11 %
Average Shares Outstanding
Basic (millions)748.9  748.3  845.7  894.9  809.5  896.7  915.5  906.2  
Diluted (millions)750.5  749.5  845.7  894.9  809.5  896.7  915.5  906.2  
Daily Production Volumes
Total US (MBOE/D)421  446  835  1,145  714  1,175  1,116  1,146  
US Oil (MBBL/D)277  289  486  642  425  662  603  633  
Worldwide - Reported (MBOE/D)719  741  1,155  1,491  1,029  1,498  1,438  1,468  
Worldwide - Continuing Operations (MBOE/D)667  689  1,112  1,460  985  1,470  1,406  1,438  
Worldwide Sales - Continuing Operations (MBOE/D)661  692  1,114  1,458  985  1,467  1,416  1,441  
Commodity Price Realizations
Worldwide oil ($/BBL)$52.62  $58.91  $56.43  $56.72  $56.32  $46.97  $23.17  $35.52  
Worldwide NGL ($/BBL)$18.14  $18.00  $14.90  $18.05  $17.05  $13.09  $7.79  $10.43  
Domestic gas ($/MCF)$1.36  $0.23  $1.25  $1.61  $1.31  $1.18  $0.90  $1.04  
Cash Flows - Continuing Operations ($ millions)
Operating cash flow before working capital (Non-GAAP)(c)$1,832  $1,771  $390  $2,316  $6,309  $1,484  $587  $2,071  
Working capital changes(884) 242  2,122  (453) 1,027  (189) (222) (411) 
Operating cash flow$948  $2,013  $2,512  $1,863  $7,336  $1,295  $365  $1,660  
Capital expenditures$(1,259) $(1,211) $(1,717) $(2,180) $(6,367) $(1,300) $(375) $(1,675) 
20192020
Year-to-dateMarJunSepDecMarJunSepDec
Net Income (Loss) ($ millions)
Reported income (loss) attributable to common stockholders$631  $1,266  $354  $(985) $(2,232) $(10,585) 
Reported EPS - Diluted ($/share)$0.84  $1.68  $0.45  $(1.22) $(2.49) $(11.68) 
Effective tax rate on reported income (loss) (%)32 %30 %55 %243 %%15 %
Adjusted income (loss) attributable to common stockholders (Non-GAAP)(a)$631  $1,360  $1,453  $1,184  $(467) $(2,079) 
Adjusted EPS - Diluted (Non-GAAP) ($/share)(b)$0.84  $1.80  $1.85  $1.45  $(0.52) $(2.29) 
Effective tax rate on adjusted income (loss) (%)26 %29 %33 %40 %(14)%11 %
Average Shares Outstanding
Basic (millions)748.9  748.7  781.1  809.5  896.7  906.2  
Diluted (millions)750.5  750.0  782.2  809.5  896.7  906.2  
Daily Production Volumes
Total US (MBOE/D)421  434  569  714  1,175  1,146  
US Oil (MBBL/D)277  283  351  425  662  633  
Worldwide - Reported (MBOE/D)719  730  874  1,029  1,498  1,468  
Worldwide - Continuing Operations (MBOE/D)667  678  825  985  1,470  1,438  
Worldwide Sales - Continuing Operations (MBOE/D)661  676  824  985  1,467  1,441  
Commodity Price Realizations
Worldwide oil ($/BBL)$52.62  $55.86  $56.10  $56.32  $46.97  $35.52  
Worldwide NGL ($/BBL)$18.14  $18.07  $16.43  $17.05  $13.09  $10.43  
Domestic gas ($/MCF)$1.36  $0.77  $1.05  $1.31  $1.18  $1.04  
Cash Flows - Continuing Operations ($ millions)
Operating cash flows before working capital (Non-GAAP)(c)$1,832  $3,603  $3,993  $6,309  $1,484  $2,071  
Working capital changes(884) (642) 1,480  1,027  (189) (411) 
Operating cash flow$948  $2,961  $5,473  $7,336  $1,295  $1,660  
Capital expenditures$(1,259) $(2,470) $(4,187) $(6,367) $(1,300) $(1,675) 
(a) See schedule 3 for non-GAAP reconciliation.
(b) See schedule 4 for non-GAAP reconciliation.
(c) See schedule 7 for non-GAAP reconciliation.





SCHEDULE 2
Occidental Petroleum Corporation
Items Affecting Comparability Detail
(amounts in millions)

20192020
Before Tax AllocationsQtr 1Qtr 2Qtr 3Qtr 4TYQtr 1Qtr 2Qtr 3Qtr 4YTD
Oil & Gas
Domestic
Asset impairments $—  $—  $(285) $(3) $(288) $(282) $(5,514) $(5,796) 
Asset sales gains, net—  —  —  475  475  —  14  14  
Rig termination and others—  —  —  —  —  (35) (3) (38) 
Oil collars MTM—  —  75  (182) (107) 952   957  
Total Domestic—  —  (210) 290  80  635  (5,498) (4,863) 
Foreign
Asset impairments —  —  (40)  (39) (264) (931) (1,195) 
Rig termination and others—  —  —  —  —  —  (6) (6) 
Total Foreign—  —  (40)  (39) (264) (937) (1,201) 
Total Oil and Gas—  —  (250) 291  41  371  (6,435) (6,064) 
Chemical
No items affecting comparability—  —  —  —  —  —  —  —  
Total Chemical—  —  —  —  —  —  —  —  —  
Midstream & Marketing
Asset and equity investment sales gains, net—  —  111   114  —  —  —  
WES stand up and other asset impairments—  —  —  (1,002) (1,002) (1,458) (7) (1,465) 
Interest rate swap MTM, net—  —  —  30  30  —  —  —  
Total Midstream & Marketing—  —  111  (969) (858) (1,458) (7) (1,465) 
Corporate
Anadarko acquisition-related costs —  (50) (924) (673) (1,647) (148) (149) (297) 
Bridge loan financing fees—  (57) (65) —  (122) —  —  —  
Acquisition-related pension & termination benefits—  —  20  17  37  —  114  114  
Interest rate swap MTM, net—  —  (53) 175  122  (669)  (665) 
Other charges and asset impairments—  —  —  (22) (22) —  —  —  
Warrants gains MTM—  —  20  61  81  84  (79)  
Total Corporate—  (107) (1,002) (442) (1,551) (733) (110) (843) 
State tax rate revaluation—  —  (23)  (18) —  —  —  
Income taxes—  13  174  58  245  55  1,226  1,281  
Loss from continuing operations—  (94) (990) (1,057) (2,141) (1,765) (5,326) (7,091) 
Net loss attributable to noncontrolling interests—  —  —  (13) (13) —  —  —  
Discontinued operations, net of taxes (a)—  —  (15) —  (15) —  (1,415) (1,415) 
Total$—  $(94) $(1,005) $(1,070) $(2,169) $(1,765) $(6,741) $(8,506) 
20192020
After Tax AllocationsQtr 1Qtr 2Qtr 3Qtr 4TYQtr 1Qtr 2Qtr 3Qtr 4YTD
Oil & Gas
Domestic
Asset impairments $—  $—  $(223) $(1) $(224) $(219) $(4,299) $(4,518) 
Asset and equity investment sales gains—  —  —  369  369  —  11  11  
Rig termination and others—  —  —  —  —  (27)  (22) 
Oil collars MTM—  —  58  (141) (83) 741   745  
Total Domestic—  —  (165) 227  62  495  (4,279) (3,784) 
Foreign
Asset impairments —  —  (40)  (39) (264) (931) (1,195) 
Rig termination and others—  —  —  —  —  —  (6) (6) 
Total Foreign—  —  (40)  (39) (264) (937) (1,201) 
Total Oil and Gas—  —  (205) 228  23  231  (5,216) (4,985) 
Chemical
No items affecting comparability—  —  —  —  —  —  —  —  
Total Chemical—  —  —  —  —  —  —  —  
Midstream & Marketing
Asset and equity sales gains —  —  87   89  —  —  —  
WES stand up and other asset impairments—  —  —  (997) (997) (1,443) (6) (1,449) 
Interest rate swap MTM, net—  —  —  26  26  —  —  —  
Total Midstream & Marketing—  —  87  (969) (882) (1,443) (6) (1,449) 
Corporate
Anadarko acquisition-related costs —  (50) (792) (514) (1,356) (115) (117) (232) 
Bridge loan financing fees—  (44) (51) —  (95) —  —  —  
Acquisition-related pension & termination benefits—  —  16  13  29  —  89  89  
Interest rate swap MTM, net—  —  (42) 137  95  (522)  (519) 
Other charges and asset impairments—  —  —  (18) (18) —  —  —  
Warrants gains MTM—  —  20  61  81  84  (79)  
Total Corporate—  (94) (849) (321) (1,264) (553) (104) (657) 
State tax rate revaluation—  —  (23)  (18) —  —  
Loss from continuing operations—  (94) (990) (1,057) (2,141) (1,765) (5,326) (7,091) 
Net loss attributable to noncontrolling interests—  —  —  (13) (13) —  —  —  
Discontinued operations, net of taxes —  —  (15) —  (15) —  (1,415) (1,415) 
Total$—  $(94) $(1,005) $(1,070) $(2,169) $(1,765) $(6,741) $(8,506) 
(a) The pre-tax impairment for the second quarter of 2020 was $2.2 billion.




SCHEDULE 3
Occidental Petroleum Corporation
Segment Results Before Tax Allocations
(amounts in millions, except per share and effective tax rate amounts)

20192020
Reported Income (Loss)Qtr 1Qtr 2Qtr 3Qtr 4TYQtr 1Qtr 2Qtr 3Qtr 4YTD
Oil & Gas
Domestic$54  $153  $(79) $710  $838  $233  $(6,841) $(6,608) 
Foreign454  596  391  410  1,851  40  (860) (820) 
Exploration(24) (23) (44) (78) (169) (37) (33) (70) 
Total Oil & Gas484  726  268  1,042  2,520  236  (7,734) (7,498) 
Chemical265  208  207  119  799  186  108  294  
Midstream & Marketing279  331  400  (769) 241  (1,287) (7) (1,294) 
Segment income (loss)1,028  1,265  875  392  3,560  (865) (7,633) (8,498) 
Corporate
Interest (83) (143) (360) (416) (1,002) (352) (310) (662) 
Other(89) (181) (1,089) (845) (2,204) (821) (241) (1,062) 
Income (loss) from continuing operations before taxes856  941  (574) (869) 354  (2,038) (8,184) (10,222) 
Taxes
Federal and state(74) (38) 181  (35) 34  90  1,577  1,667  
Foreign(151) (268) (344) (132) (895) (65) (109) (174) 
Income (loss) from continuing operations631  635  (737) (1,036) (507) (2,013) (6,716) (8,729) 
Discontinued operations, net of taxes—  —  (15) —  (15) —  (1,415) (1,415) 
Net income (loss)631  635  (752) (1,036) (522) (2,013) (8,131) (10,144) 
Less: Net loss attributable to noncontrolling interests—  —  (42) (103) (145) —  —  —  
Less: Preferred stock dividends—  —  (118) (200) (318) (219) (222) (441) 
Net income (loss) attributable to common stockholders$631  $635  $(912) $(1,339) $(985) $(2,232) $(8,353) $(10,585) 
Reported diluted earnings per share$0.84  $0.84  $(1.08) $(1.50) $(1.22) $(2.49) $(9.12) $(11.68) 
Effective Tax Rate26 %33 %(28)%(19)%243 %%18 %15 %
Items Affecting ComparabilityQtr 1Qtr 2Qtr 3Qtr 4TYQtr 1Qtr 2YTD
Oil & Gas
Domestic$—  $—  $(210) $290  $80  $635  $(5,498) $(4,863) 
Foreign—  —  (40)  (39) (264) (937) (1,201) 
Exploration—  —  —  —  —  —  —