1st Quarter Results

*T Occidental Petroleum Announces First Quarter 2003 Results *T LOS ANGELES, April 22, 2003 (PRIMEZONE) -- Occidental Petroleum Corporation (NYSE:OXY) (LSE:OCP) announced net income for the first quarter 2003 of $325 million ($0.86 per share), compared with $25 million ($0.07 per share) for the first quarter 2002. In announcing the results, Dr. Ray R. Irani, chairman and chief executive officer, said, "Oil and natural gas production for the quarter averaged 532,000 barrels of oil equivalent - the highest level for any quarter in the company's history. Our core earnings, which were driven by high oil and natural gas prices, hit their highest level in the last six quarters. Strong cash flow during the quarter resulted in additional debt reduction of $182 million which in turn lowered our debt- to-total-capitalization to 41 percent compared to 43 percent at the end of last year. Core earnings, as shown on the attached schedule, were $433 million for the first quarter 2003 ($1.14 per share)." *T Oil and Gas *T Oil and gas segment and core earnings were $727 million for the first quarter 2003, compared with $306 million for the first quarter 2002. The improvement in the first quarter 2003 earnings reflected $440 million from higher worldwide crude oil and natural gas prices. *T Chemicals *T Chemical segment and core earnings were $35 million for the first quarter 2003, compared with a $31 million loss for the first quarter 2002. The improvement in the first quarter 2003 results reflected higher sales prices for PVC, chlorine and EDC; partially offset by higher energy and raw material costs and lower caustic soda sales prices. The first quarter 2002 included a $36 million pre-tax loss for Equistar, which was sold in the third quarter 2002, and a $14 million pre-tax charge for severance. Statements in this presentation that contain words such as "will" or "expect", or otherwise relate to the future, are forward-looking and involve risks and uncertainties that could significantly affect expected results. Factors that could cause results to differ materially include, but are not limited to: global commodity pricing fluctuations, and supply/demand considerations, for oil, gas and chemicals; higher-than- expected costs; and not successfully completing (or any material delay in) any expansion, capital expenditure, acquisition, or disposition. Occidental disclaims any obligation to update any forward-looking statements. For further analysis of Occidental's quarterly performance, please visit the website: www.oxy.com *T SUMMARY OF SEGMENT NET SALES AND EARNINGS ($ millions, except per-share amounts) First Quarter 2003 2002 _______ _______ SEGMENT NET SALES Oil and gas $ 1,553 $ 958 Chemical 790 565 Corporate and other 28 - _______ _______ Net sales $ 2,371 $ 1,523 ________ _______ SEGMENT EARNINGS (LOSSES) Oil and gas $ 727 $ 306 Chemical 35 (31) _______ _______ 762 275 Unallocated Corporate Items Interest expense, net (a) (124) (56) Income taxes (b) (178) (44) Trust preferred distributions & other (11) (11) Other (c) (56) (41) _______ _______ Income from continuing operations 393 123 Discontinued operations, net - (3) Cumulative effect of changes in accounting principles, net (d) (68) (95) _______ _______ NET INCOME $ 325 $ 25 _______ _______ _______ _______ BASIC EARNINGS PER COMMON SHARE Income from continuing operations $ 1.04 $ 0.33 Discontinued operations, net - (0.01) Cumulative effect of changes in accounting principles, net (0.18) (0.25) _______ _______ $ 0.86 $ 0.07 _______ _______ _______ _______ DILUTED EARNINGS PER COMMON SHARE Income from continuing operations $ 1.03 $ 0.33 Discontinued operations, net - $ (0.01) Cumulative effect of changes in accounting principles, net (0.18) (0.25) _______ _______ $ 0.85 $ 0.07 _______ _______ _______ _______ AVERAGE BASIC COMMON SHARES OUTSTANDING 379.1 374.5 ________ _______ *T See footnotes on following page. (a) The first quarter 2003 includes a $61 million pre-tax interest charge to repay a $450 million 6.4 percent senior notes issue that had ten years of remaining life, but was subject to re-marketing on April 1, 2003. The three months 2002 includes interest income on notes receivable from Altura partners of $14 million. The partnership exercised an option in May 2002 to redeem the sellers' remaining partnership interests in exchange for the outstanding balance on the notes. (b) Excludes U.S. federal income tax charges and credits allocated to the segments and foreign taxes. Oil and gas segment earnings include credits of $1 million for each of the three months 2003 and 2002. Chemical segment earnings have been impacted by credits of $4 million for the three months 2002. (c) The three months 2002 includes preferred distributions to the Occidental Permian Partners of $15 million. This is essentially offset by the interest income discussed in (a) above. The partnership exercised an option in May 2002 to redeem the sellers' remaining partnership interests in exchange for the outstanding balance on the notes. (d) Effective January 1, 2003, Occidental implemented SFAS No. 143 - "Accounting for Asset Retirement Obligations." Adoption of this new accounting standard resulted in a cumulative after-tax reduction in net income of $50 million. Also effective January 1, 2003, Occidental implemented the rescission of EITF 98-10, which precludes mark-to-market accounting for all energy-trading contracts that are not derivatives and fair-value accounting for inventories purchased from third parties. Adoption of this accounting change resulted in a cumulative after-tax reduction in net income of $18 million. Effective January 1, 2002, Occidental implemented SFAS No. 142 - "Goodwill and Other Intangible Assets." Adoption of this new accounting standard resulted in a cumulative after-tax reduction in net income of $95 million in the first quarter 2002. *T SUMMARY OF OPERATING STATISTICS First Quarter 2003 2002 ________ _______ NET OIL, GAS AND LIQUIDS PRODUCTION PER DAY United States Crude oil and liquids (MBBL) California 78 90 Permian 144 140 Horn Mountain 15 - Hugoton 4 3 _______ _______ Total 241 233 Natural Gas (MMCF) California 262 305 Hugoton 144 157 Permian 117 129 Horn Mountain 5 - _______ _______ Total 528 591 Latin America Crude oil (MBBL) Colombia 37 36 Ecuador 16 13 _______ _______ Total 53 49 Middle East and Other Eastern Hemisphere Crude oil (MBBL) Oman 13 17 Pakistan 10 8 Qatar 47 44 Yemen 39 47 _______ _______ Total 109 116 Natural Gas (MMCF) Pakistan 75 50 Barrels of Oil Equivalent (MBOE) Subtotal consolidated subsidiaries 504 505 Colombia-minority interest (4) (5) Russia-Occidental net interest 30 25 Yemen-Occidental net interest 2 - _______ _______ Subtotal other interests 28 20 _______ _______ Total worldwide production 532 525 _______ _______ _______ _______ CAPITAL EXPENDITURES (millions) $ 298 $ 254 _______ _______ _______ _______ DEPRECIATION, DEPLETION AND AMORTIZATION OF ASSETS (millions) $ 285 $ 261 ________ _______ *T SIGNIFICANT TRANSACTIONS AND EVENTS AFFECTING EARNINGS Occidental's results of operations often include the effects of significant transactions and events affecting earnings that vary widely and unpredictably in nature, timing, and amount. Therefore, management uses a measure called "core earnings", which excludes those items. This non-GAAP measure is not meant to disassociate those items from management's performance, but rather is meant to provide useful information to investors interested in comparing Occidental's earnings performance between periods. Reported earnings are considered representative of management's performance over the long term. Core earnings is not considered to be an alternative to operating income in accordance with generally accepted accounting principles. The following table sets forth the core earnings and significant items affecting earnings for each operating segment and corporate: *T First Quarter ($ millions, except per share amounts) 2003 EPS 2002 EPS _____ _____ _____ _____ TOTAL REPORTED EARNINGS $ 325 $0.86 $ 25 $0.07 ______ _____ _____ _____ ______ _____ _____ _____ Oil and Gas Segment Earnings $ 727 $ 306 Less: None - - _____ _____ Segment Core Earnings 727 306 _____ _____ Chemicals Segment Earnings (Loss) 35 (31) Less: None - - _____ _____ Segment Core Earnings (Loss) 35 (31) _____ _____ Corporate Results (437) (250) Less: Debt repayment charge (61) - Tax effect of pre-tax adjustments 21 - Discontinued operations, net* - (3) Changes in accounting principles, net* (68) (95) _____ _____ TOTAL CORE EARNINGS $ 433 $1.14 $ 123 $0.33 _____ _____ _____ _____ * These amounts are shown after tax. ITEMS AFFECTING COMPARABILITY OF CORE EARNINGS BETWEEN PERIODS First Quarter ($ millions) 2003 2002 _______ _______ INCOME / (EXPENSE) (Pre-tax) Oil and Gas On-going quarterly impact of adopting asset retirement obligations (4) - Chemicals Reorganizations/severance - (14) Equistar equity results - (36) Corporate Equity results (23) - *T *T -0- CONTACT: Occidental Lawrence P. Meriage (media) (310) 443-6562 Kenneth J. Huffman (investors) (212) 603-8183 *T ------------------------------------------------------------ This information was brought to you by Waymaker http://www.waymaker.net The following files are available for download: http://www.waymaker.net/bitonline/2003/04/22/20030422BIT00880/wkr0001.doc http://www.waymaker.net/bitonline/2003/04/22/20030422BIT00880/wkr0002.pdf