Occidental Petroleum Announces Second Quarter of 2012 Income

Occidental
Petroleum Corporation (NYSE:OXY) announced net income of $1.3
billion ($1.64 per diluted share) for the second quarter of 2012,
compared with the second quarter of 2011 net income of $1.8 billion
($2.23 per diluted share).

In announcing the results, Stephen I. Chazen, President and Chief
Executive Officer, said, 'Our second quarter 2012 total Company
production of 766,000 barrels of oil equivalent per day was the second
consecutive quarter of record production. Our domestic production was 9
percent higher than the second quarter of 2011 and total production was
7 ?percent higher. Our domestic production of 462,000 barrels of oil
equivalent per day was a record for the seventh consecutive quarter. We
increased our daily domestic production by 7,000 barrels from the first
quarter of 2012 and by 38,000 barrels from the second quarter of 2011.

'Lower product prices impacted our second quarter results, resulting in
diluted EPS of $1.64 per share. We generated cash flow from operations
of $6.0 billion for the first six months of 2012 and invested $5.1
billion in capital expenditures.'

Oil and Gas

Oil and gas segment earnings were $2.0 billion for the second quarter of
2012, compared with $2.6 billion for the second quarter of 2011. Lower
oil and gas prices, higher operating costs and higher DD&A rates in the
second quarter of 2012 were partially offset by higher volumes.

For the second quarter of 2012, daily oil and gas production volumes
averaged 766,000 barrels of oil equivalent (BOE), compared with 715,000
BOE in the second quarter of 2011.

The second quarter 2012 production increase resulted from 38,000 BOE per
day higher domestic volumes and a 13,000 BOE per day increase in the
Middle East/North Africa.

Daily sales volumes increased from 705,000 BOE in the second quarter of
2011 to 759,000 BOE in the second quarter of 2012.

Oxy′s realized price for worldwide crude oil was $99.34 per barrel for
the second quarter of 2012, compared with $103.12 per barrel for the
second quarter of 2011. The second quarter of 2012 realized oil price
represents 106 percent of the average WTI and 91 percent of the average
Brent price for the quarter. Worldwide NGL prices were $42.06 per barrel
in the second quarter of 2012, compared with $57.67 per barrel in the
second quarter of 2011. Domestic gas prices decreased 51 percent from
$4.27 per MCF in the second quarter of 2011 to $2.09 per MCF for the
second quarter of 2012.

Second quarter 2012 realized prices were also lower than first quarter
2012 prices for all our products. On a sequential quarterly basis, price
decreases were 8 percent for worldwide crude oil, 20 percent for
worldwide NGLs and 26 percent for domestic natural gas.

Chemicals

Chemical segment earnings for the second quarter of 2012 were $194
million, compared with $253 million in the second quarter of 2011. The
year-over-year decrease was the result of lower domestic and export
caustic volumes, lower vinyl chloride monomer (VCM) export demand, and
lower polyvinyl chloride and VCM export prices, partially offset by
lower natural gas and ethylene costs.

Midstream, Marketing and Other

Midstream segment earnings were $77 million for the second quarter of
2012, compared with $187 million for the second quarter of 2011. The
results predominantly reflect lower margins in the marketing and trading
businesses and the gas processing businesses, partially offset by higher
income in the pipeline businesses.

SIX-MONTH RESULTS

Year-to-date 2012 core income was $2.9 billion ($3.56 per diluted
share), compared with $3.4 billion ($4.19 per diluted share) for the
same period in 2011. Net income for the first six months of 2012 was
$2.9 billion ($3.55 per diluted share), compared with $3.4 billion
($4.13 per diluted share) for the same period in 2011.

Oil and Gas

Oil and gas segment earnings were $4.5 billion for the six months of
2012, compared with $5.1 billion for the same period of 2011. The $600
million decrease in the 2012 results reflected lower NGL and natural gas
prices, higher operating costs and higher DD&A rates, partially offset
by higher oil prices and increased volumes.

Oil and gas production volumes for the six months were 760,000 BOE per
day for 2012, compared with 723,000 BOE per day for the 2011 period.
Year-over-year, our domestic production increased by 11 percent, while
total production increased by 5 percent. Higher year-over-year average
oil prices and other factors affecting our production-sharing and
similar contracts lowered our Middle East/North Africa and Long Beach
production by 7,000 BOE per day.

The six-month 2012 daily production volume increase resulted from 44,000
BOE higher domestic volumes, partially offset by lower volumes of 2,000
BOE in the Middle East/North Africa and 5,000 BOE in Latin America.

Daily sales volumes were 752,000 BOE in the first six months of 2012,
compared with 717,000 BOE for 2011.

Oxy's realized prices improved for crude oil but declined for natural
gas and NGLs on a year-over-year basis. Worldwide crude oil prices were
$103.63 per barrel for the six months of 2012, compared with $97.38 per
barrel for the six months of 2011. Worldwide NGL prices were $47.52 per
barrel for the six months of 2012, compared with $55.38 per barrel in
the six months of 2011. Domestic gas prices declined 42 percent, from
$4.24 per MCF in the six months of 2011 to $2.46 per MCF in the six
months of 2012.

Chemicals

Chemical segment earnings were $378 million for the six months of 2012,
compared with $472 million for the same period in 2011. The 2012
six-month reduction was primarily a result of lower export volumes and
prices due to the weakening economic conditions in Europe and Asia,
partially offset by lower energy costs.

Midstream, Marketing and Other

Midstream segment earnings were $208 million for the six months of 2012,
compared with $301 million for the same period in 2011. The 2012 results
reflect lower results in the marketing and trading business, the gas
processing business and the power generation business, partially offset
by improved results in the pipeline businesses.

Forward-Looking Statements

Portions of this press release contain forward-looking statements and
involve risks and uncertainties that could materially affect expected
results of operations, liquidity, cash flows and business prospects.
Factors that could cause results to differ materially include, but are
not limited to: global commodity pricing fluctuations; supply and demand
considerations for Occidental′s products; general domestic political and
regulatory approval conditions; international political conditions; not
successfully completing, or any material delay of, any development of
new fields, expansion projects, capital expenditures,
efficiency-improvement projects, acquisitions or dispositions; potential
failure to achieve expected production from existing and future oil and
gas development projects; exploration risks such as drilling
unsuccessful wells; any general economic recession or slowdown
domestically or internationally; higher-than-expected costs; potential
liability for remedial actions under existing or future environmental
regulations and litigation; potential liability resulting from pending
or future litigation; potential disruption or interruption of
Occidental′s production or manufacturing or damage to facilities due to
accidents, chemical releases, labor unrest, weather, natural disasters,
political events or insurgent activity; failure of risk management;
changes in law or regulations; or changes in tax rates. 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 uncertainty of future events or outcomes generally
indicate forward-looking statements. You should not place undue reliance
on these forward-looking statements, which speak only as of the date of
this report. 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. Material risks that may affect
Occidental′s results of operations and financial position appear in Part
1, Item 1A 'Risk Factors' of the 2011 Form 10-K.