Occidental Announces 1st Quarter 2020 Results

• Enhanced short-term resilience through extensive capital spending and cost reductions
  • Continued to reduce 2020 capital program; greater than 50 percent from initial program to between $2.4B - $2.6B
  • Identified $1.2B in operating and overhead cost reductions to be realized in 2020 in addition to achieving $1.1B overhead and operating expense synergy target one year ahead of schedule
• First quarter combined production of 1,416 Mboed from continuing operations, exceeding prior guidance midpoint by 31 Mboed
  • Permian Resources exceeded guidance, producing 474 Mboed
• Continued operational excellence through record drilling and completion times
• Exceeded pre-tax income guidance for both OxyChem and Midstream and Marketing segments
• In light of the market disruption caused by COVID-19, full-year 2020 guidance has been withdrawn

Occidental Petroleum Corporation today announced a net loss attributable to common stockholders for the first quarter of 2020 of $2.2M, or $2.49 per diluted share, and an adjusted loss attributable to common stockholders of $467M, or $0.52 per diluted share. First quarter pre-tax items affecting comparability included approximately $1.4B of goodwill impairment charges and equity investment losses mainly related to an equity investment in Western Midstream Partners, LP (WES), $670M mark-to-market loss on interest rate swaps, $580M of impairment and related charges on domestic and international oil and gas properties and $150M of Anadarko acquisition-related transaction costs, partially offset by $1.0B of mark-to-market gains on crude oil hedges.

“As the world battles this pandemic, we are focused on preserving the health and safety of our employees and contractors while taking aggressive action to ensure our long-term financial stability. We have identified an additional $1.2B in operating and corporate cost savings and reduced our full-year capital budget to between $2.4B to $2.6B, while protecting the integrity of our assets,” said President and Chief Executive Officer Vicki Hollub. “Our leadership as a low-cost operator, track record of operational excellence and portfolio of world-class assets are competitive advantages that position us for success when market conditions eventually improve.”

Quarterly Results

Oil and Gas
Oil and gas pre-tax income for the first quarter was $179M, compared to $921M for the fourth quarter of 2019. First quarter results were impacted by the steep decline in oil prices in March triggered by a significant drop in oil demand as governments around the world implemented measures to contain the spread of COVID-19. The first quarter results included approximately $1.0B of mark-to-market gains on crude oil hedges, partially offset by $580M of impairment and related charges mainly related to proved and unproved properties in the U.S. and in Oman. Excluding the mark-to-market gain and impairment charges, the decrease in first quarter results reflected lower commodity prices and higher depreciation, depletion and amortization rates.

Total average daily production volume of 1,416 thousands of barrels of oil equivalent per day (Mboed) for the first quarter exceeded the midpoint of guidance by 31 Mboed, with Permian Resources production of 474 Mboed due to continued improvement in time-to-market and well performance. International average daily production volumes of 241 Mboed came in at the high end of guidance. For the first quarter of 2020, average WTI and Brent marker prices were $46.17 per barrel and $50.95 per barrel, respectively. Average worldwide realized crude oil prices decreased by 16 percent from the prior quarter to $47.08 per barrel. Average worldwide realized NGL prices decreased by 28 percent from the prior quarter to $12.82 per BOE. Average domestic realized gas prices decreased by 27 percent from the prior quarter to $1.18 per Mcf.

OxyChem
Chemical pre-tax income for the first quarter of $186M exceeded guidance by $36M. Compared to prior quarter income of $119M, the increase in first quarter income was primarily due to stronger chlor-alkali sales volumes and favorable feedstock costs, primarily ethylene and natural gas, partially offset by lower realized caustic soda pricing.

Midstream and Marketing
Midstream and marketing pre-tax loss for the first quarter was $1.3B, compared to a loss of $769M for the fourth quarter of 2019. First quarter pre-tax loss included $1.4B of impairment charges on the goodwill related to Occidental's equity investment in WES and equity losses from WES's impairments of its goodwill. The goodwill impairments were the result of the significant drop in the market value of WES's unit price during the first quarter. Excluding these charges, the decrease reflected lower income from WES, losses on imbalance provisions due to the decline in crude oil prices and lower Dolphin Pipeline income due to planned maintenance, partially offset by mark-to-market gains in the marketing business.

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 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. For more information, visit oxy.com