LOS ANGELES, May 4, 2007 (PRIME NEWSWIRE) -- Occidental Petroleum Corporation's (NYSE:OXY) Chairman, President and Chief Executive Officer, Dr. Ray R. Irani, reported on the company's 2006 record setting achievements at Oxy's annual stockholders meeting.
"Oxy is a highly focused company with two core businesses where the emphasis is on consistent superior performance," Dr. Irani reported.
Oxy's year-end closing stock price of $48.83 per share, after adjusting for the two-for-one stock split declared in August 2006, was the highest year-end closing price in Oxy's history, said Dr. Irani. "If you invested $100 in Oxy stock at year-end 2001, the value of your investment would have grown to $415 by year-end 2006, compared with returns of $225 from the S&P Integrated Oil Index and $135 from the overall S&P 500 Index."
Stockholders' equity also reached new highs in each of the last five years, rising to $19.2 billion at the end of 2006, an increase of more than 241 percent since the beginning of 2002.
"We ended 2006 with the strongest balance sheet in the company's history as debt declined for the sixth consecutive year," said Dr. Irani. "At the end of last year, our debt-to-capitalization ratio was at an all-time year-end low of 13 percent. Additional debt reduction so far this year has further reduced that ratio to 10 percent at the end of the first quarter."
The company's profit per barrel of oil equivalent and cash flow per barrel led all major industry competitors for the eighth consecutive year. Cash flow from operations of $6.4 billion and core results of $4.3 billion set all-time highs for the fifth consecutive year. Net income was $4.2 billion compared to $5.3 billion for 2005.
"Our success in adding new oil and gas reserves at a pace well ahead of production has increased our total proved reserves to historical highs in each of the past five years," noted Dr. Irani. "Last year, for example, we replaced 245 percent of our production and ended the year with proved reserves at a record-high of 2.9 billion barrels of oil equivalent." In addition, worldwide oil and natural gas production increased 14 percent to a record high 601,000 equivalent barrels per day.
"We believe that we will continue creating superior value for our stockholders by sticking with our business strategy of balancing profitability with growth and remaining focused on the key metrics that drive our business," said Dr. Irani.
"The key to our oil and gas strategy has been concentrating on the geographic areas where we have competitive advantages. Right now that means the United States, the Middle East/North Africa region and Latin America. Our assets are large and long-lived, which we expand through exploration and development and enhanced oil recovery projects. We expect to see combined production from these core areas grow at a compounded annual rate of 5 to 8 percent through 2010."
Dr. Irani discussed the recently announced acquisition from BP of certain producing and pipeline assets in Texas, which is expected to close in the third quarter, and will further strengthen Oxy's industry leading position in the Permian Basin. He noted that Oxy expects to maintain a minimum of 50 percent of the company's worldwide production in the United States, which accounted for 61 percent of Oxy's production in 2006.
Dr. Irani cited a number of important growth initiatives currently under way in Argentina, Colombia, Libya, Oman, Qatar and the United Arab Emirates. In particular, he highlighted the start-up of the giant Dolphin Project that by year-end 2007, is expected to supply two billion cubic feet per day of natural gas from the world's largest gas field in Qatar to markets in the United Arab Emirates and Oman. At peak production, the gas from this massive project, in which Oxy has a 24.5 percent interest, would equal one-third of California's total annual gas consumption. Most importantly, Dr. Irani stressed, "This project should generate a steady stream of cash and earnings for the next 25 years."
In discussing Occidental's chemical business, Dr. Irani noted that OxyChem's 2006 operating profit margin of 18.7 percent was nearly double the average profit margin of its industry competitors and that the business generated more than $900 million of cash after accounting for capital expenditures.
In looking to the future, Dr. Irani observed, "World energy demand continues to grow. With little excess capacity, energy prices are likely to remain high and volatile. We expect to excel in this environment and to capture new growth opportunities. We will maintain financial discipline by continuing to add reserves we believe are cost-effective and grow production. And above all, we will remain focused on generating top-quartile returns for our stockholders." About Oxy
Occidental Petroleum Corporation is an international oil and gas exploration and production company with operations in the United States, Middle East/North Africa and Latin America regions. Oxy is the fourth largest U.S. oil and gas company, based on equity market capitalization. Oxy's wholly owned subsidiary, OxyChem, manufactures and markets chlor-alkali products and vinyls. Occidental is committed to safeguarding the environment, protecting the safety and health of employees and neighboring communities and upholding high standards of social responsibility in all of the company's worldwide operations. Forward-Looking Statements
Statements in this release that contain words such as "will," "expect" or "estimate," 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: exploration risks such as drilling of unsuccessful wells, global commodity pricing fluctuations and supply/demand considerations for oil, gas and chemicals; higher than expected costs; political risks; changes in tax rates; unrealized acquisition benefits or higher than expected integration costs; and not successfully completing (or any material delay in) any expansion, capital expenditure, acquisition or disposition. You should not place undue reliance on these forward-looking statements which speak only as of the date of this release. Unless legally required, Occidental does not undertake any obligation to update any forward-looking statements as a result of new information, future events or otherwise. U.S. investors are urged to consider carefully the disclosure in our Form 10-K, available through 1-888-699-7383 or at www.oxy.com. You also can obtain a copy from the SEC by calling 1-800-SEC-0330.