FOCUS, DISCIPLINE, PERFORMANCE

Transcription

FOCUS, DISCIPLINE,
PERFORMANCE
Occidental Petroleum Corporation 2015 Annual Report
Selected Financial Data
(in millions, except per-share amounts)
As of and for the years ended December 31,
2015
2014
2013
2012
2011
Net sales
$ 12,480
$ 19,312
$ 20,170
$ 20,100
$ 20,001
Income (loss) from continuing operations
$ (8,146)
$
(130)
$ 4,932
$ 3,829
$ 5,527
Net income (loss) attributable to common stock
$ (7,829)
$
616
$ 5,903
$ 4,598
$ 6,771
Basic earnings (loss) per common share from continuing operations $ (10.64)
$
(0.18)
$
6.12
$
4.72
$
6.79
Basic earnings (loss) per common share
$ (10.23)
$
0.79
$
7.33
$
5.67
$
8.32
Diluted earnings (loss) per common share
$ (10.23)
$
0.79
$
7.32
$
5.67
$
8.32
Total assets
$ 43,437
$ 56,259
$ 69,443
$ 64,210
$ 60,044
Long-term debt, net
$ 6,883
$ 6,838
$ 6,939
$ 7,023
$ 5,871
Stockholders’ equity
$ 24,350
$ 34,959
$ 43,372
$ 40,048
$ 37,620
MARKET CAPITALIZATION (b)
$ 51,632
$ 62,119
$ 75,699
$ 61,710
$ 75,992
$ 3,254
$ 8,871
$ 10,229
$ 9,050
$ 9,740
Capital expenditures
$ (5,272)
$ (8,930)
$ (7,357)
$ (7,874)
$ (5,354)
Cash provided (used) by all other investing activities, net
$
(151)
$ 2,686
$ 1,040
$ (1,989)
$ (3,530)
Cash dividends paid
$ (2,264)
$ (2,210)
$ (1,553)(c)
$ (2,128)(c) $ (1,436)
Purchases of treasury stock
$
(593)
$ (2,500)
$
(943)
$
(583)
$
(274)
Cash provided (used) by all other financing activities, net
$ 4,341
$ 2,384
$
(437)
$ 1,865
$
535
DIVIDENDS PER COMMON SHARE
$
$
$
2.56
$
$
1.84
RESULTS OF OPERATIONS (a)
FINANCIAL POSITION (a)
CASH FLOW FROM CONTINUING OPERATIONS
Operating:
Cash flow from operations
Investing:
Financing:
2.97
2.88
2.16
WEIGHTED AVERAGE BASIC SHARES
OUTSTANDING (MILLIONS)
766
781
804
809
Note: Argentine operations were sold in February 2011 and are presented as discontinued operations. The statements of income and cash flows related to California Resources have been treated as
discontinued operations for all periods presented. The assets and liabilities of California Resources were removed from Occidental’s consolidated balance sheet as of November 30, 2014.
(a)
See the MD&A section of this report and the Notes to Consolidated Financial Statements for information regarding acquisitions and dispositions, discontinued operations
and other items affecting comparability.
(b)
Market capitalization is calculated by multiplying the year-end total shares of common stock outstanding, net of shares held as treasury stock, by the year-end closing stock price.
(c)
The 2012 amount includes an accelerated fourth quarter dividend payment, which normally would have been accrued as of year-end 2012 and paid in the first quarter of 2013.
ON THE COVER: Occidental’s Permian Basin operations, Martin County, Texas
812
Partner of Choice
®
At Occidental, what we do is important – and how we do it is even more so. Our mission is to develop
energy – safely, responsibly and profitably – to maximize shareholder value and remain a partner of choice
for our stakeholders.
Occidental Petroleum Corporation (NYSE: OXY) is an international oil and gas exploration and production
company with operations in the United States, Middle East region and Latin America. Headquartered in
Houston, Occidental is one of the largest U.S. oil and gas companies, based on equity market capitalization.
Occidental’s midstream and marketing segment gathers, processes, transports, stores, purchases and
markets hydrocarbons and other commodities in support of Occidental’s businesses. The company’s
wholly owned subsidiary OxyChem manufactures and markets basic chemicals 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 throughout its worldwide operations.
UNITED STATES
48%
of worldwide production
312,000 BOEPD of production
1.271 billion BOE proved reserves
INTERNATIONAL
52%
of worldwide production
340,000 BOEPD of production
0.929 billion BOE proved reserves
Excludes Williston production
Occidental pumping unit in Gaines County, Texas, in the Permian Basin
Occidental 2015 Annual Report
1
Focus, Discipline,
Performance
From the Chief Executive Officer
Occidental Permian Basin operations near Midland, Texas
2
For more than 20 years I have been a part of Occidental’s
senior management, and therefore bear considerable
responsibility for decisions made throughout my tenure.
Some turned out well, some poorly, and many were neither.
During that period, our goals and priorities have remained
very much the same. We believe that doing a few things
well is better than doing many things average.
We take significant risks, including product price fluctuations
and development execution. We avoid exploration and
financial risks. Our cash flow priorities are first to safely
and responsibly maintain the business. Our second priority
is shareholder dividends. Dividends provide discipline to
ensure that share issuances and investments are truly
accretive. Our next priority is growing and strengthening the
business. Decisions to increase drilling, make acquisitions,
repurchase shares or reduce debt depend on the relative
value created by each choice. Our goal in every case is to
invest to earn returns well above our cost of capital.
When I joined the company in 1994, Occidental looked very
different. Production was sourced from more than a dozen
nations, and we had over 40 active exploration programs
in 25 foreign countries. Nearly two-thirds of the company’s
cash flow was generated by our chemical segment and a
gas pipeline business.
Due to this lack of focus, we couldn’t compete effectively
across our portfolio to provide long-term, higher returns for
our shareholders. While conventional wisdom in the industry
at the time encouraged the global pursuit of new fields in
less proven acreage, we worked to streamline our portfolio,
acquiring large, “legacy” oil and gas assets with long-term
growth potential. This included acquiring mature fields in
the United States, such as in the Permian Basin, one of the
premier producing regions in the world.
consistently profitable performer, generating high financial
returns and providing free cash flow to the corporation.
Declining and volatile commodity prices made 2015 a
difficult year for Occidental and the oil and gas industry.
2016 will continue to be challenging. In this environment,
we will need to both manage our cost structure as well as
look for ways to grow the business. In adversity there is
often opportunity. During industry downturns, situations may
arise to invest in overlooked assets.
I am pleased with the appointment of my colleague Vicki
Hollub to succeed me as chief executive officer. She takes
the helm of a streamlined and more focused company with a
strong balance sheet that is a formidable industry competitor
positioned to exploit opportunities that may present
themselves. Vicki’s outstanding track record of efficiently and
profitably growing our oil and gas business, combined with
her extensive operational and leadership experience, make
her the right person to lead our organization today and meet
the challenges facing our industry going forward.
I appreciate the many co-workers I’ve had the privilege
to work with since joining the company in 1994. I am
grateful for the support of Occidental’s investors and
other stakeholders through the years. Occidental is in a
strong position with quality assets, modest debt and sound
leadership. It has been an honor to serve as the CEO for
such a dynamic company in this vital, global industry.
Stephen I. Chazen
Chief Executive Officer
We continue to hold a dominant position in the Permian Basin
that provides economies of scale and oil development potential
through our high-growth unconventional resources business
and low-cost enhanced oil recovery operations. Our midstream
assets are complementary to, and support, our upstream
operations in the region, where we operate an integrated
business from the point of production to the point of sale.
Internationally, we are regarded as a premier partner in
world-class projects in Oman, Qatar, and the United Arab
Emirates in the Middle East, as well as in Colombia. We
have been an active investor in these areas for more than
four decades. This portfolio generates free cash flow while
providing modest volume growth.
Our chemical business, OxyChem, produces basic chemicals
and vinyls and is first or second in the United States for
the principal products it manufactures and markets. The
company is a safety leader in its industry and a
3
From the
President and
Chief Operating
Officer
Occidental is well placed
for continued growth when
commodity prices recover.
Our company is uniquely
situated, in terms of size
and scale, between the peer
groups of large integrated oil
majors and the independent
exploration and production
companies – making it an
attractive investment alternative
that combines the positive
elements of both groups.
Through focus, discipline and performance,
we continued Occidental’s transformation
during 2015.
We successfully accomplished many of the goals set out in the strategic review
announced in 2013, streamlining and focusing operations in order to better
execute the company’s long-term strategy and enhance value for shareholders.
Our portfolio is concentrated in areas where we have depth and scale. Last
year we sold assets in the Williston Basin, and we reached agreements to
sell our Piceance assets and exit non-core Middle East operations in Iraq and
Yemen, while reducing our exposure in Bahrain and Libya.
We applied greater discipline throughout our worldwide operations, resulting
in an adjusted cost structure that allows us to compete more effectively in a
lower commodity price environment and positions us for greater profitability
when prices recover. Understanding that cost savings alone will not lead us
to prosperity, we also improved our productivity, finding new ways to operate
more efficiently.
We also substantially grew our oil and gas production, achieving a new
level of performance for the company. Total daily worldwide production
increased by 14 percent over the prior year, averaging 652,0001 barrels
of oil equivalent per day. This was accomplished while reducing our capital
spending 36 percent compared with 2014. Approximately 64 percent of
our 2015 production was oil, reflecting our continued focus on growing
oil volumes. Production growth was driven by a disciplined development
program in the Permian Basin, resilient base production, and the startup
of operations at Al Hosn, a joint venture with the Abu Dhabi National Oil
Company (ADNOC).
1. Excludes Williston Basin (sold in November 2015) average daily production volumes of 16 MBOE in 2015.
4
We are primarily an oil producer. Our core U.S. operations
are in the Permian Basin of West Texas and southeast
New Mexico. Internationally, our core focus areas are
Oman, Qatar, and the United Arab Emirates in the Middle
East region as well as Colombia in Latin America. We
also have complementary midstream and world-class
chemical businesses.
Our commitment to safety remains a constant throughout
our global operations. Based on the U.S. Department of
Labor’s Injury and Illness Incidence Rates, our employees
and contractors achieved the company’s highest-rated
workplace safety record in 2015. While we are pleased
with this achievement, we are not satisfied with this
result, as our intention is to prevent incidents altogether.
We exited 2015 with a cash balance of $4.4 billion.
The priorities for using our cash flow have not changed.
They are in order of priority: maintenance capital,
dividends, growth capital, share repurchases, and
asset acquisitions.
Reflecting the high regard Occidental is held in the
industry, Occidental ranked No. 1 in Fortune magazine’s
2015 survey of the World’s Most Admired Companies in
the Mining, Crude-Oil Production category, and Corporate
Responsibility Magazine ranked Occidental among the
100 Best Corporate Citizens for 2015.
For the 13th consecutive year Occidental increased its
dividend. We returned $2.3 billion to our shareholders
in the form of dividends during 2015, which is part of
our commitment to maximize shareholder value.
In February 2016, Occidental’s Board of Directors
affirmed the annualized dividend rate of $3.00 per share.
We expect to continue funding our dividend, as our
base oil business, new projects, and production growth
support distributable cash flow.
Commodity businesses are inherently volatile. Our overall
strategy is to invest in projects that generate long-term
value, achieving returns well above our cost of capital
while maintaining a conservative balance sheet. We will
invest our capital prudently and maintain flexibility as we
maneuver through the current low-price cycle.
For 2016, our capital budget is expected to be between
$2.8 and $3 billion, which will allow us to achieve
production growth of 2 to 4 percent from our ongoing
operations. This represents about a 50 percent reduction
in capital spending from the prior year. The Permian
Basin is our top priority for capital allocation for the
foreseeable future, where our competitive advantage
includes extensive infrastructure around our midstream
business, economies of scale, and a large, multiyear
inventory of drilling locations. Improved operating
efficiencies and captured price savings from suppliers
will allow us to do more with less.
Occidental is well placed for continued growth when
commodity prices recover. Our company is uniquely
situated, in terms of size and scale, between the peer
groups of large integrated oil majors and the independent
exploration and production companies – making it an
attractive investment alternative that combines the
positive elements of both groups.
Thanks to the leadership and vision of Steve Chazen,
Occidental has a terrific portfolio of assets and topnotch people. His efforts have radically transformed this
company into a more focused, financially sound business
that’s positioned to better execute its long-term strategy
and enhance value for shareholders. I am proud and
honored to be given the responsibility by Occidental’s
Board of Directors to lead this great company as his
successor. I will work tirelessly to earn and keep the
respect of the Board, my fellow employees, investors,
and other stakeholders as we strive to be the best
company in our industry.
Vicki A. Hollub
President and Chief Operating Officer
Further demonstrating the company’s commitment to the
Permian and the ongoing investment in our employees,
we opened Oxy Permian Plaza last year, a state-of-theart office complex featuring the latest technologies for
sharing knowledge, pursuing innovations and conducting
our business more efficiently.
5
2015
Financial &
Operational
Review
Al Hosn Gas in Abu Dhabi, United Arab Emirates
Focusing on Capital and Operating
Efficiencies
Occidental achieved another year of strong operational
performance in 2015. While lower oil prices impacted
financial performance during the year, the company’s oil
and gas segment operated well in all of its core assets,
the chemical segment contributed consistent cash flow
throughout the year, with midstream supporting these
businesses. We continue to identify opportunities for
improving our overall performance, generating stockholder
value, and delivering sustainable, long-term growth.
2015 Financial Performance
Core income1 for 2015 was $91 million ($0.12 per diluted
share), compared with $3.8 billion ($4.83 per diluted share)
in 2014. Net income for 2015 was a loss of $7.8 billion
($10.23 per diluted share), compared with net income
attributable to common stock of $616 million ($0.79 per
diluted share) for 2014. As a result of a thorough portfolio
review, we have reduced the carrying value of the assets
in areas where we are exiting or minimizing development
activity. This resulted in after-tax impairment and related
charges of $8.2 billion.
Operating cash flow before working capital changes was
$4.8 billion in 2015, and the company spent $5.6 billion
for capital expenditures. We returned $2.3 billion of cash to
our shareholders in the form of dividends and repurchased
nearly $600 million of company stock. We exited 2015 with
a cash balance of $4.4 billion.
Standard & Poor’s and Moody’s rating services recently
rated Occidental wit an ‘A’ and ‘A3’, respectively, both with
a stable outlook. Superior debt ratings give Occidental
enhanced financial liquidity.
2015 Market Performance
Occidental’s closing stock price at the end of 2015 was
$67.61 per share. The company’s market capitalization at
year-end was approximately $51.6 billion, and our ranking
within the S&P 500, which is based on market capitalization,
was No. 89 at the close of 2015.
2015 Oil and Gas Performance
Worldwide oil and gas production volumes averaged
652,0002 barrels of oil equivalent (BOE) per day for 2015,
up from 571,0003 BOE per day in the prior year.
Our worldwide realized crude oil price for 2015 averaged
$47.10 per barrel, a 48 percent decrease compared with
$90.13 per barrel in 2014. Worldwide prices for natural gas
liquids decreased 57 percent to $15.96 per barrel in 2015,
and domestic natural gas prices decreased 46 percent to
$2.15 per MCF.
The company reported worldwide estimated proved reserves
of 2.2 billion BOE at year-end 2015, keeping proved producing
reserves essentially flat in the year. Our total Permian business
replaced 115 percent of production, and Permian Resources
replaced 214 percent through the drilling program, excluding
net sales and revisions. We estimate that 79 percent of our total
proved reserves at year-end 2015 are proved developed, up
from 71 percent last year; and 74 percent of proved reserves
were liquids.
Occidental’s oil and gas segment achieved core earnings1 of
$437 million in 2015, compared with $5.7 billion in 2014. The
decrease in oil and gas results was due primarily to the decline
in commodity prices, partially offset by higher volumes and
lower operating costs.
UNITED STATES OIL AND GAS OPERATIONS
Our U.S. assets produced 312,0002 BOE per day in 2015,
which represents a 7 percent increase over the prior year and
1. Core results reflect Occidental’s 2015 income shown on page 42 of the Form 10-K after removing the effect of Significant Items Affecting Earnings described on page 22 of the Form 10-K.
2. Excludes Williston Basin (sold in November 2015) average daily production volumes of 16 MBOE in 2015.
3. Excludes Williston Basin (sold in November 2015) average daily production volumes of 20 MBOE in 2014 and Hugoton (sold in April 2014) average daily volumes of 6 MBOE.
6
48 percent of Occidental’s worldwide production. Daily U.S.
oil production increased 25,000 barrels over the prior year,
averaging 187,000 barrels per day.
In 2015, Occidental’s net share of production from the UAE was
35,000 BOE per day.
LATIN AMERICA OIL AND GAS OPERATIONS
Our domestic oil business is focused in the Permian Basin
of West Texas and southeast New Mexico. Occidental is the
largest operator and oil producer in the basin. The company’s
2015 Permian production of approximately 255,000 BOE
per day represents nearly 39 percent of our total worldwide
production and approximately 13 percent net share of the
Permian Basin’s total oil production.
Our Latin America operations, primarily focused in Colombia,
provided 37,000 BOE per day in 2015, representing about
6 percent of the company’s worldwide production. Our
Colombian assets continue to generate very high returns
and substantial free cash flow.
Occidental manages operations in the Permian Basin through
two businesses: Permian Enhanced Oil Recovery (EOR) and
Permian Resources. Nearly three-quarters of our Permian EOR
production is from fields that actively employ carbon dioxide
(CO2 ) flooding, making Occidental the largest CO2 injector in
the Permian and a world leader in applying this technology.
Permian EOR produced 145,000 BOE per day in 2015.
Occidental’s midstream and marketing segment gathers,
processes, transports, stores, purchases, and markets
hydrocarbons and other commodities primarily in support of
Occidental’s upstream businesses. Midstream segment core
earnings1 were $65 million for 2015, compared with $549
million in 2014. The decrease in earnings compared to the prior
year reflects lower marketing margins due to the narrowing of
the Midland to Gulf Coast differentials.
Permian Resources is among our fastest-growing assets.
The business is developing unconventional reservoirs across
approximately 2.5 million net acres, including acreage with
prospective resource potential. Permian Resources produced
an average of 110,000 BOE per day in 2015, a 47 percent
increase from 75,000 BOE per day in 2014.
MIDDLE EAST OIL AND GAS OPERATIONS
Occidental’s key focus areas in the Middle East region are
Oman, Qatar and the United Arab Emirates (UAE). Our goal
in the Middle East region is to operate a targeted business
and generate free cash flow while providing modest volume
growth. It represented approximately 46 percent of 2015
total worldwide production, or 303,000 BOE per day.
Occidental is the largest independent oil producer in
Oman. Our major operations are located in northern Oman,
primarily at the Safah Field, and at the Mukhaizna Field in
the south. In 2015, our share of production from Oman was
approximately 89,000 BOE per day.
In Qatar, Occidental is the second-largest oil producer offshore,
where we operate developments at Idd El Shargi North Dome
(ISND), Idd El Shargi South Dome (ISSD) and Al Rayyan.
Occidental also participates in the Dolphin Gas Project, the
premier transborder natural gas project in the Middle East,
where it delivers gas from Qatar’s North Field to customers in
the UAE and Oman. Occidental’s total 2015 share of production
from Qatar was approximately 107,000 BOE per day.
In the UAE, Occidental has partnered with Abu Dhabi National
Oil Company (ADNOC) on Al Hosn, one of the largest natural
gas developments in the Middle East. Volumes of gas and
liquids ramped up throughout the year, with Occidental’s
share at 60,000 BOE per day at full run-rate production.
2015 Midstream and Marketing Performance
2015 Chemical Performance
Occidental Chemical Corporation (OxyChem), a wholly owned
subsidiary, mainly manufactures and markets chlor-alkali
products and vinyls used in water treatment, paper production,
pharmaceuticals, construction, automobile manufacturing,
soaps and disinfecting products, among numerous other
beneficial applications. The company generates high financial
returns and consistently provides free cash flow to the
corporation. Chemical segment core earnings1 for 2015 were
$565 million, compared with $569 million in 2014. Cash flow
after capital spending was $315 million in 2015.
Social Responsibility
Occidental is committed to providing safe, healthy and
secure workplaces; protecting the environment; maintaining
high ethical standards; upholding and promoting human
rights; and respecting cultural norms and values,
everywhere we operate.
The safety of our operations, workforce and neighbors is
our highest priority. Occidental’s 2015 employee and
contractor Injury and Illness Incidence Rate (IIR) of 0.30 is
almost one-tenth of the current U.S. private industry average
IIR of 3.2 published by the U.S. Bureau of Labor Statistics.
Our core values of investment, integrity and innovation
are essential to our success, to operating responsibly and
building our global reputation as a Partner of Choice.®
7
Board of
Directors
AS OF DECEMBER 31, 2015
1 Member of the Audit Committee
2 Member of the Executive Compensation Committee
3 Member of the Corporate Governance,
Nominating and Social Responsibility Committee
4 Member of the Environmental, Health and
Safety Committee
EUGENE L. BATCHELDER 3
STEPHEN I. CHAZEN
Former Senior Vice President and
Chief Administrative Officer, ConocoPhillips
Chief Executive Officer,
Occidental Petroleum Corporation
JOHN E. FEICK 1, 2, 4, 5
MARGARET M. FORAN 1, 3, 4, 6
CARLOS M. GUTIERREZ 2, 3, 5, 6
Chairman, Matrix Solutions Inc.
Chief Governance Officer,
Senior Vice President and Corporate Secretary,
Prudential Financial, Inc.
Co-Chair, Albright Stonebridge Group;
Former U.S. Secretary of Commerce; Former
President and Chairman, Kellogg Company
5 Member of the Finance and
Risk Management Committee
6 Member of the Management Succession
and Talent Development Committee
Management
CHIEF EXECUTIVE OFFICER,
PRESIDENT AND
CHIEF OPERATING OFFICER
EXECUTIVE AND SENIOR VICE PRESIDENTS
Edward A. (Sandy) Lowe
Christopher G. Stavros
Cynthia L. Walker
Stephen I. Chazen
Executive Vice President,
President, Oxy Oil & Gas International
Senior Vice President and
Chief Financial Officer
Senior Vice President,
Marketing and Midstream
Operations & Development
Marcia E. Backus
Glenn M. Vangolen
Senior Vice President, General Counsel
and Corporate Secretary
Senior Vice President,
Business Support
Chief Executive Officer
Vicki A. Hollub
President and Chief Operating Officer
8
VICKI A. HOLLUB
SPENCER ABRAHAM 2, 3, 4, 6
HOWARD I. ATKINS 1, 5, 6
President and Chief Operating Officer,
Occidental Petroleum Corporation
Chairman and Chief Executive Officer,
The Abraham Group LLC;
Former U.S. Secretary of Energy
Former Senior Executive Vice President
and Chief Financial Officer,
Wells Fargo & Company
WILLIAM R. KLESSE 2, 5, 6
AVEDICK B. POLADIAN 1, 2, 5
ELISSE B. WALTER 1, 4, 6
Former Chairman and Chief Executive Officer,
Valero Energy Corporation
Executive Vice President and
Chief Operating Officer, Lowe Enterprises, Inc.
Former Chairman, U.S. Securities
and Exchange Commission
VICE PRESIDENTS AND KEY DIVISIONAL EXECUTIVES
Ioannis A. Charalambous
Ben F. Figlock
Darin S. Moss
Melissa E. Schoeb
Vice President and Chief Information Officer
Vice President and Treasurer
Vice President, Human Resources
Vice President, Communications and
Public Affairs
Gary L. Daugherty
Harold E. Heide
Robert L. Peterson
Vice President, Internal Audit
Vice President,
Health, Environment and Safety
President,
Occidental Chemical Corporation
Michael S. Stutts
Vice President, Government Relations
Jennifer M. Kirk
Anita M. Powers
Ronald K. Takeuchi
Vice President, Executive Vice President,
Worldwide Exploration, Oxy Oil & Gas
President, Oxy Energy Services
Joseph C. Elliott
Vice President, Controller and
Principal Accounting Officer
Vice President, Tax
Ian M. Davis
Vice President
President, Domestic Oxy Oil & Gas
Michael P. Ure
Vice President, Mergers and Acquisitions
9
Occidental by the Numbers
1
Excludes Argentina, California, Hugoton and Williston
Occidental’s Centurion Pipeline operations in Midland, Texas
10
2015
Form 10-K
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TABLE OF CONTENTS
Part I
Items 1 and 2 Business and Properties.........................................................................................................................................................
General.............................................................................................................................................................................
Oil and Gas Operations....................................................................................................................................................
Chemical Operations........................................................................................................................................................
Midstream and Marketing Operations...............................................................................................................................
Capital Expenditures.........................................................................................................................................................
Employees........................................................................................................................................................................
Environmental Regulation.................................................................................................................................................
Available Information.........................................................................................................................................................
Item 1A
Risk Factors............................................................................................................................................................................
Item 1B
Unresolved Staff Comments...................................................................................................................................................
Item 3
Legal Proceedings..................................................................................................................................................................
Item 4
Mine Safety Disclosures.........................................................................................................................................................
Executive Officers...................................................................................................................................................................
Part II
Item 5
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities..............
Item 6
Selected Financial Data..........................................................................................................................................................
Item 7
Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A).....................................
Strategy.............................................................................................................................................................................
Oil and Gas Segment........................................................................................................................................................
Chemical Segment............................................................................................................................................................
Midstream and Marketing Segment..................................................................................................................................
Segment Results of Operations and Significant Items Affecting Earnings........................................................................
Taxes.................................................................................................................................................................................
Consolidated Results of Operations.................................................................................................................................
Consolidated Analysis of Financial Position......................................................................................................................
Liquidity and Capital Resources.......................................................................................................................................
Off-Balance-Sheet Arrangements.....................................................................................................................................
Contractual Obligations.....................................................................................................................................................
Lawsuits, Claims and Contingencies................................................................................................................................
Environmental Liabilities and Expenditures......................................................................................................................
Foreign Investments.........................................................................................................................................................
Critical Accounting Policies and Estimates.......................................................................................................................
Significant Accounting and Disclosure Changes...............................................................................................................
Safe Harbor Discussion Regarding Outlook and Other Forward-Looking Data................................................................
Item 7A
Quantitative and Qualitative Disclosures About Market Risk..................................................................................................
Item 8
Financial Statements and Supplementary Data.....................................................................................................................
Report of Independent Registered Public Accounting Firm on Consolidated Financial Statements.................................
Report of Independent Registered Public Accounting Firm on Internal Control Over Financial Reporting.......................
Consolidated Balance Sheets...........................................................................................................................................
Consolidated Statements of Operations...........................................................................................................................
Consolidated Statements of Comprehensive Income.......................................................................................................
Consolidated Statements of Stockholders' Equity.............................................................................................................
Consolidated Statements of Cash Flows..........................................................................................................................
Notes to Consolidated Financial Statements....................................................................................................................
Quarterly Financial Data (Unaudited)................................................................................................................................
Supplemental Oil and Gas Information (Unaudited).........................................................................................................
Financial Statement Schedule:
Schedule II – Valuation and Qualifying Accounts..............................................................................................................
Item 9
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.................................................
Item 9A
Controls and Procedures........................................................................................................................................................
Management's Annual Assessment of and Report on Internal Control Over Financial Reporting....................................
Disclosure Controls and Procedures.................................................................................................................................
Item 9B
Other Information....................................................................................................................................................................
Part III
Item 10
Directors, Executive Officers and Corporate Governance......................................................................................................
Item 11
Executive Compensation........................................................................................................................................................
Item 12
Security Ownership of Certain Beneficial Owners and Management Matters........................................................................
Item 13
Certain Relationships and Related Transactions and Director Independence.......................................................................
Item 14
Principal Accounting Fees and Services................................................................................................................................
Part IV
Item 15
Exhibits and Financial Statement Schedules.........................................................................................................................
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Proved Reserves
United States (b)
International
Total
Sales Volumes
United States (b)
International
Total
Oil
915
394
1,309
73
86
159
2015
NGLs
Gas
186 1,019
144 2,349
330 3,368
BOE
1,271
929
2,200
155
205
360
119
127
246
20
7
27
(a)
Oil
1,273
497
1,770
67
74
141
2014
NGLs
Gas
222 1,714
140 2,413
362 4,127
20
2
22
173
158
331
BOE
1,781
1,038
2,819
116
102
218
(a)
Oil
1,131
482
1,613
64
75
139
2013
NGLs
Gas
204 2,012
134 2,711
338 4,723
21
3
24
193
163
356
BOE
1,670
1,068
2,738
(a)
117
105
222
Note: The detailed proved reserves information presented in accordance with Item 1202(a)(2) to Regulation S-K under the Securities Exchange Act of 1934 (Exchange
Act) is provided under the heading "Supplemental Oil and Gas Information". Proved reserves are stated on a net basis after applicable royalties.
(a) Natural gas volumes are converted to BOE at six thousand cubic feet (Mcf) of gas per one barrel of oil. Barrels of oil equivalence does not necessarily result in price
equivalence. The price of natural gas on a barrel of oil equivalent basis is currently substantially lower than the corresponding price for oil and has been similarly
lower for a number of years. For example, in 2015, the average prices of West Texas Intermediate (WTI) oil and New York Mercantile Exchange (NYMEX) natural
gas were $48.80 per barrel and $2.75 per Mcf, respectively, resulting in an oil to gas ratio of 18 to 1.
(b) Excludes proved reserves and sales volumes for Occidental's California oil and gas operations, which were transferred to California Resources Corporation (California
Resources) in November 2014, and has been treated as discontinued operations.
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MINE SAFETY DISCLOSURES
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Occidental's oil and gas reserve additions may not
continue at the same rate and a failure to replace
reserves may negatively affect our business.
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EXECUTIVE OFFICERS
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Name
Current Title
Age at February 26,
2016
Positions with Occidental and Subsidiaries and Employment History
Stephen I. Chazen
Chief Executive Officer
69
Chief Executive Officer since 2011 and President 2007-2015; Chief Operating Officer, 2010-2011;
Director since 2010.
Vicki A. Hollub
Chief Operating Officer and
President
56
President, Chief Operating Officer and Director since December 2015; Senior Executive Vice
President and President, Oxy Oil and Gas 2015; Executive Vice President and President Oxy
Oil and Gas - Americas 2014-2015; Vice President and Executive Vice President, U.S. Operations,
Oxy Oil and Gas 2013-2014; Executive Vice President - California Operations 2012-2013; Oxy
Permian CO2 President and General Manager 2011-2012.
Edward A. “Sandy” Lowe
Executive Vice President
64
Executive Vice President since 2015, Vice President 2008-2015; President - Oxy Oil & Gas,
International since 2009.
Marcia E. Backus
Senior Vice President
61
Senior Vice President, General Counsel, Chief Compliance Officer and Corporate Secretary since
2015, Vice President, General Counsel and Corporate Secretary 2014-2015, Vice President and
General Counsel 2013-2014; Vinson & Elkins: Partner, 1990-2013.
Christopher G. Stavros
52
Senior Vice President since 2015; Chief Financial Officer since 2014; Executive Vice President
2014-2015; Vice President, Investor Relations and Treasurer 2012-2014; Vice President, Investor
Relations 2006-2012.
Cynthia L. Walker
39
Senior Vice President - Marketing and Midstream Operations & Development, since 2016, Senior
Vice President, Strategy and Development 2015; Executive Vice President, Strategy and
Development 2014-2015; Executive Vice President and Chief Financial Officer 2012-2014;
Goldman, Sachs & Co.: Managing Director 2010-2012.
Jennifer M. Kirk
Vice President
41
Vice President and Controller since 2014; Controller, Occidental Oil and Gas Corporation
2012-2014; Finance Director 2008-2012.
Part II
ITEM 5
MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS
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Total
Number
of Shares
Purchased
Period
First Quarter 2015
2,750,835
Second Quarter 2015
4,769,624
Third Quarter 2015
105,386
October 1 - 31, 2015
Average
Price
Paid
per Share
Total Number of Shares
Purchased as Part of
Publicly Announced
Plans or Programs
$
75.07
2,650,000
$
78.05
4,769,624
(a)
$
65.73
—
$
—
—
(a)
$
75.10
—
(a)
—
November 1 - 30, 2015
104,291
December 1 - 31, 2015
—
$
—
—
104,291
7,730,136
$
$
75.10
76.78
—
7,419,624
Fourth Quarter 2015
Total 2015
Maximum Number of Shares
that May Yet Be Purchased
Under the
Plans or Programs
63,756,544
(b)
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Occidental
Peer Group(1)
S&P 500
$181
$160
$140
$120
$104
$100
$83
$80
12/31/2010
12/31/2010
$ 100
12/31/2011
12/31/2012
12/31/2011
12/31/2012
$ 97
$ 82
12/31/2013
12/31/2013
$ 104
12/31/2014
12/31/2015
12/31/2014
12/31/2015
$ 95
$ 83
100
109
111
136
127
104
100
102
118
157
178
181
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ITEM 6
SELECTED FINANCIAL DATA
FIVE-YEAR SUMMARY OF SELECTED FINANCIAL DATA
As of and for the years ended December 31,
RESULTS OF OPERATIONS (a)
Net sales
Basic earnings (loss) per common share from continuing operations
2015
2014
2013
2012
2011
$
$
$
$
$
$
12,480
(8,146)
(7,829)
(10.64)
(10.23)
(10.23)
$ 19,312
$
(130)
$
616
$ (0.18)
$
0.79
$
0.79
$ 20,170
$ 4,932
$ 5,903
$
6.12
$
7.33
$
7.32
$ 20,100
$ 3,829
$ 4,598
$
4.72
$
5.67
$
5.67
$ 20,001
$ 5,527
$ 6,771
$
6.79
$
8.32
$
8.32
FINANCIAL POSITION (a)
Total assets
Long-term debt, net
$ 43,437
$ 6,883
$ 24,350
$ 56,259
$ 6,838
$ 34,959
$ 69,443
$ 6,939
$ 43,372
$ 64,210
$ 7,023
$ 40,048
$ 60,044
$ 5,871
$ 37,620
MARKET CAPITALIZATION (b)
$ 51,632
$ 62,119
$ 75,699
$ 61,710
$ 75,992
$
$
8,871
$ 10,229
$
$
$ (7,874)
$ (1,989)
CASH FLOW FROM CONTINUING OPERATIONS
Operating:
Cash flow from continuing operations
Investing:
Cash provided (used) by all other investing activities, net
Financing:
Cash dividends paid
Cash provided (used) by all other financing activities, net
$ (5,272)
$
(151)
$ (8,930)
$ 2,686
$ (7,357)
$ 1,040
$ (2,264)
$
(593)
$ 4,341
$ (2,210)
$ (2,500)
$ 2,384
$ (1,553)
$
(943)
$
(437)
$
$
$
WEIGHTED AVERAGE BASIC SHARES OUTSTANDING (millions)
3,254
2.97
766
2.88
781
2.56
804
(c)
9,050
$ (2,128)
$
(583)
$ 1,865
$
2.16
809
9,740
$ (5,354)
$ (3,530)
(c)
$ (1,436)
$
(274)
$
535
$
1.84
812
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OPERATIONS (MD&A)
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Foreign
Exploration
Oil and Gas (b,c,d)
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2015
2014
Benefit (Charge) (in millions)
OIL AND GAS
Asset sales gains (b)
Asset impairments and related items
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international (d)
Total Oil and Gas
CHEMICAL
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Asset sale losses
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Discontinued operations, net of tax (i)
Total Corporate
2013
$ 8,304 $ 13,887 $ 15,008
3,945
4,817
4,673
891
1,373
1,174
(660)
(765)
(685)
$ 12,480 $ 19,312 $ 20,170
2015
$
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2014
$
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(4,766)
(5,050)
(1,066)
2013
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317
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2015
$ 8,304
Segment Results
Domestic
Foreign
Exploration
2014
$ 13,887
Production per Day by
Products
United States
Oil (MBBL)
Permian Resources
Permian EOR
Midcontinent and Other
Total
NGLs (MBBL)
Permian Resources
Permian EOR
Total
Natural gas (MMCF)
Permian Resources
Permian EOR
Total
Latin America
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Dolphin
Oman
Qatar
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Oman
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Total Production Ongoing
Operations
Sold assets - Hugoton
Sold assets - Williston
Total Production (MBOE) (a)
2013
$ 15,008
$ (4,151) $ (2,381) $ 1,938
(3,747)
2,935
4,581
(162)
(126)
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United States
Permian Resources
Permian EOR
Total
Latin America
Al Hosn
Dolphin
Oman
Qatar
Other
Total
Total Production Ongoing
Operations
2015
2014
2013
110
145
57
312
37
75
147
70
292
29
65
147
72
284
31
35
41
89
66
72
303
—
38
76
69
67
250
—
37
74
68
79
258
652
571
573
—
6
18
16
20
18
668
597
609
(See footnote following the Average Realized Prices table)
2015
2013
71
110
6
187
43
111
8
162
35
111
7
153
16
29
10
55
12
30
12
54
10
29
15
54
137
37
246
420
120
38
296
454
117
40
311
468
35
10
27
11
29
12
7
7
82
66
32
194
—
7
69
69
28
173
—
6
66
68
39
179
10
8
18
—
7
7
—
7
7
109
158
44
237
548
—
143
43
236
422
—
142
51
241
434
652
—
16
668
571
6
20
597
573
18
18
609
(See footnote following the Average Realized Prices table)
2014
Sales Volumes per Day by
Products
United States
2015
Oil (MBBL)
NGLs (MBBL)
Natural gas (MMCF)
2014
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2013
187
55
420
162
54
454
153
54
468
35
10
29
11
27
12
7
8
82
67
36
200
—
7
69
69
27
172
—
6
68
67
38
179
10
8
18
548
—
7
7
422
—
7
7
434
658
—
16
674
572
6
20
598
572
18
18
608
Latin America
Oil (MBBL) – Colombia
Natural gas (MMCF) – Bolivia
Oil (MBBL)
Al Hosn
Dolphin
Oman
Qatar
Other
Total
NGLs (MBBL)
Al Hosn
Dolphin
Total
Natural gas (MMCF)
Total Sales Ongoing
Operations
Total Sales Volumes (MBOE) (a)
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2015
2014
2013
Average Realized Prices
Oil Prices ($ per bbl)
United States
Latin America
Total worldwide
$
$
$
$
45.04
44.49
49.65
47.10
$
$
$
$
84.73
88.00
96.34
90.13
$ 92.48
$ 103.21
$ 104.48
$ 98.81
$ 15.35
$ 17.88
$ 15.96
$ 37.79
$ 30.98
$ 37.01
$ 38.65
$ 33.00
$ 38.00
$ 2.15
$ 5.20
$ 1.49
$ 3.97
$ 8.94
$ 2.55
$ 3.22
$ 11.17
$ 2.23
NGLs Prices ($ per bbl)
United States
Total worldwide
Gas Prices ($ per Mcf)
United States
Latin America
Total worldwide (a)
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Chemical
(in millions)
Segment Sales
Segment Results
2015
$ 3,945
2014
$ 4,817
2013
$ 4,673
$
$
$
542
420
Worldwide Effective Tax Rate
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743
(in millions)
SEGMENT RESULTS
Oil and Gas
Chemical
Midstream and Marketing (a)
Unallocated Corporate Items
Pre-tax (loss) income
Income tax (benefit) expense
Federal and State
Foreign
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Segment Sales
Segment Results
2015
891
2014
$ 1,373
2013
$ 1,174
$ (1,194)
$ 2,564
$ 1,523
$
2013
$(8,060)
542
(1,194)
(764)
(9,476)
$ 428
420
2,564
(1,871)
1,541
$ 6,411
743
1,523
(531)
8,146
(2,070)
740
(157)
1,842
1,061
2,153
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(1,330)
1,685
3,214
Income
(loss) from continuing operations
(a)
$(8,146)
$ (144)
$ 4,932
Worldwide effective tax rate
14%
109%
40%
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2015
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Net sales
Interest, dividends and other income
2015
$ 12,480
$ 118
2014
$ 19,312
$ 130
2013
$ 20,170
$ 107
Gain on sale of equity investments and
other assets
$
$ 2,505
$ 1,175
(in millions)
101
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Expense Items
(in millions)
Cost of sales
Selling, general and administrative and
other operating expenses
Depreciation, depletion and amortization
Taxes other than on income
Exploration expense
Interest and debt expense, net
2015
$ 5,804
2014
$ 6,803
2013
$ 6,497
$ 1,270
$ 1,503
$ 1,544
$ 4,544
$ 10,239
$ 343
$
36
$ 147
$ 4,261
$ 7,379
$ 550
$ 150
$
77
$ 4,203
$ 621
$ 564
$ 140
$ 132
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Provision for income taxes
2015
$ 1,330
2014
2013
$ (1,685) $ (3,214)
Income from equity investments
$
208
$
331
$
395
Discontinued operations, net
$
317
$
760
$
971
Income/(expense) (in millions)
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2015
(in millions)
2014
CURRENT ASSETS
Cash and cash equivalents
Restricted cash
Trade receivables, net
Inventories
Assets held for sale
Other current assets
Total current assets
Investments in unconsolidated entities
Available for sale investment
Property, plant and equipment, net
Long-term receivables and other assets, net
$
$
3,201
1,193
2,970
986
141
911
9,402
$
3,789
4,019
4,206
1,052
—
807
$ 13,873
$ 1,267
$
167
$ 31,639
$
962
$ 1,171
$
394
$ 39,730
$ 1,091
$
$
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Current maturities of long-term debt
Accounts payable
Accrued liabilities
Domestic and foreign income taxes
Liabilities of assets held for sale
Total current liabilities
Long-term debt, net
Deferred credits and other liabilities-income taxes
Deferred credits and other liabilities-other
$
1,450
3,069
2,213
—
110
6,842
$ 6,883
$ 1,323
$ 4,039
$ 24,350
$
—
5,229
2,601
414
—
8,244
$ 6,838
$ 3,015
$ 3,203
$ 34,959
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Cash Flow Analysis
Cash provided by operating activities
(in millions)
Operating cash flow from continuing
operations
Operating cash flow from discontinued
operations, net of taxes
Net cash provided by operating activities
2015
2014
2013
$ 3,254
$ 8,871
$ 10,229
97
2,197
2,549
$ 3,351
$ 11,068
$ 12,778
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Cash used by investing activities
(in millions)
Oil and Gas
Chemical
Corporate
Total
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Net cash used by investing activities –
continuing operations
Investing cash flow from discontinued
operations
Net cash used by investing activities
2015
2014
2013
$ (4,442) $ (6,533) $ (5,409)
(254)
(314)
(424)
(535)
(1,983)
(1,360)
(41)
(100)
(164)
(5,272)
(8,930)
(7,357)
(151)
2,686
1,040
(5,423)
(6,244)
(6,317)
—
(2,226)
(1,727)
$ (5,423) $ (8,470) $ (8,044)
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Cash used by financing activities
2015
(in millions)
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operations
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operations
Net cash provided (used) by financing
activities
$ 1,484
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$ 1,484
2014
2013
Leases
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$ (2,202) $ (2,933)
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Obligations
(in millions)
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Sheet
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Other long-term
liabilities (b)
Operating leases
(Note 6)
Purchase
obligations (c)
$1,450
$1,750
$ 116
$
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2,604
983
415
393
813
1,175
179
317
171
508
9,906
1,890
2,420
1,321
4,275
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$22,042
$4,502
$4,902
$2,001
$ 10,637
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2017
2019
2021
and
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2016
2018
2020
thereafter
Delivery Commitments
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($ amounts
in millions)
2015
NPL sites
Reserve
Balance
$
27
# of
Sites
30
Reserve
Balance
$
23
# of
Sites
31
Reserve
Balance
$
25
66
128
67
101
74
83
18
107
17
107
20
118
31
124
31
103
32
104
386
145
334
157
149
$
$
$
2015
334
$
2014
330
$
2013
344
117
79
—
(7)
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Payments
(65)
(68)
(74)
$
386
$
334
60
$
330
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$
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accretion
Spin-off of California Resources
Balance — End of Year
2013
# of
Sites
34
Third-party sites
Occidentaloperated sites
Closed or nonoperated
Occidental sites
Total
2014
(in millions)
Balance — Beginning of Year
(in millions)
2015
2014
2013
Operating Expenses
Oil and Gas
Chemical
$
93
74
13
$
103
80
11
$
100
75
13
$
180
$
194
$
188
$
122
41
4
$
143
35
11
$
67
14
5
$
167
$
189
$
86
$
117
$
79
$
60
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Oil and Gas
Chemical
Remediation Expenses
Corporate
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Source of Fair Value
Assets/(liabilities)
(in millions)
Prices actively quoted
Prices provided by
other external
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Total
$
13
(51)
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(120)
—
$
(101)
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—
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$
12
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Risk Management
2016
Maturity Periods
2017
2019
and
and
2021 and
2018
2020 thereafter
Interest Rate Risk
General
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Year of Maturity
(in millions of
U.S. dollars)
2016
U.S. Dollar
Fixed-Rate
Debt
$
1,450
U.S. Dollar
Variable-Rate
Debt
$
Grand Total (a)
—
1,450
2017
1,250
—
1,250
2018
500
—
500
2019
116
—
116
2020
—
—
—
4,973
68
5,041
Thereafter
Total
$
Weighted-average
interest rate
Fair Value
8,289
$
3.33%
$
8,357
68
$
0.15%
$
68
8,357
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Consolidated Balance Sheets
DQG6XEVLGLDULHV
LQPLOOLRQV
Assets at December 31,
2015
2014
CURRENT ASSETS
Cash and cash equivalents
$
3,201
$
3,789
Restricted cash
1,193
4,019
Trade receivables, net of reserves of $17 in 2015 and 2014
2,970
4,206
Inventories
986
1,052
Assets held for sale
141
—
911
807
9,402
13,873
1,267
167
1,171
394
1,434
1,565
55,025
59,061
Chemical segment
6,717
6,574
Midstream and marketing
8,899
8,304
417
576
71,058
74,515
(39,419)
(34,785)
31,639
39,730
962
1,091
Total current assets
INVESTMENTS
Investment in unconsolidated entities
Total investments
PROPERTY, PLANT AND EQUIPMENT
Oil and gas segment
Corporate
Accumulated depreciation, depletion and amortization
LONG-TERM RECEIVABLES AND OTHER ASSETS, NET
TOTAL ASSETS
$
7KHDFFRPSDQ\LQJQRWHVDUHDQLQWHJUDOSDUWRIWKHVHFRQVROLGDWHGILQDQFLDOVWDWHPHQWV
43,437
$
56,259
Consolidated Balance Sheets
DQG6XEVLGLDULHV
LQPLOOLRQVH[FHSWVKDUHDQGSHUVKDUHDPRXQWV
Liabilities and Stockholders’ Equity at December 31,
2015
2014
CURRENT LIABILITIES
Current maturities of long-term debt
$
1,450
$
—
Accounts payable
3,069
5,229
Accrued liabilities
2,213
2,601
—
414
110
—
6,842
8,244
6,883
6,838
Deferred domestic and foreign income taxes
1,323
3,015
Other
4,039
3,203
5,362
6,218
178
178
Treasury stock: 2015 — 127,681,335 shares and 2014 — 119,951,199 shares
(9,121)
(8,528)
Additional paid-in capital
7,640
7,599
25,960
36,067
(307)
(357)
24,350
34,959
Domestic and foreign income taxes
Liabilities of assets held for sale
Total current liabilities
LONG-TERM DEBT, NET
DEFERRED CREDITS AND OTHER LIABILITIES
STOCKHOLDERS' EQUITY
Common stock, $0.20 per share par value, authorized shares: 1.1 billion, issued shares:
2015 — 891,360,091 and 2014 — 890,557,537
Retained earnings
Accumulated other comprehensive loss
Total stockholders' equity
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$
43,437
$
56,259
Consolidated Statements of Operations
DQG6XEVLGLDULHV
LQPLOOLRQVH[FHSWSHUVKDUHDPRXQWV
2015
REVENUES AND OTHER INCOME
Net sales
Interest, dividends and other income
Gain on sale of equity investments and other assets
$
2014
12,480
118
101
$
2013
19,312
130
2,505
$
20,170
107
1,175
12,699
21,947
21,452
5,804
1,270
4,544
10,239
343
36
147
6,803
1,503
4,261
7,379
550
150
77
6,497
1,544
4,203
621
564
140
132
22,383
20,723
13,701
INCOME (LOSS) BEFORE INCOME TAXES AND OTHER ITEMS
(Provision for) benefit from domestic and foreign income taxes
Income from equity investments
(9,684)
1,330
208
1,224
(1,685)
331
7,751
(3,214)
395
INCOME (LOSS) FROM CONTINUING OPERATIONS
Income from discontinued operations
(8,146)
317
(130)
760
4,932
971
COSTS AND OTHER DEDUCTIONS
Cost of sales (excludes depreciation, depletion, and amortization of $4,540 in 2015, $4,257 in
2014, and $4,197 in 2013)
Selling, general and administrative and other operating expenses
Exploration expense
Interest and debt expense, net
NET INCOME (LOSS)
Less: Net income attributable to noncontrolling interest
$
(7,829) $
—
630 $
(14)
5,903
—
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK
$
(7,829) $
616
$
5,903
BASIC EARNINGS (LOSS) PER COMMON SHARE (attributable to common stock)
$
(10.64) $
0.41
(0.18) $
0.97
6.12
1.21
BASIC EARNINGS (LOSS) PER COMMON SHARE
$
(10.23) $
0.79
$
7.33
DILUTED EARNINGS (LOSS) PER COMMON SHARE (attributable to common stock)
$
(10.64) $
0.41
(0.18) $
0.97
6.12
1.20
DILUTED EARNINGS (LOSS) PER COMMON SHARE
$
(10.23) $
0.79
$
7.32
$
2.88
$
2.56
The accompanying notes are an integral part of these consolidated financial statements.
2.97
$
Consolidated Statements of Comprehensive Income
DQG6XEVLGLDULHV
LQPLOOLRQV
2015
Other comprehensive income (loss) items:
Foreign currency translation (losses) gains
Realized foreign currency translation losses
Unrealized gains (losses) on derivatives (a)
Pension and postretirement gains (losses) (b)
Distribution of California Resources to shareholders (c)
Reclassification to income of realized losses (gains) on derivatives (d)
Other comprehensive income (loss), net of tax (e)
Comprehensive income (loss)
2014
2013
$
(7,829) $
616
$
5,903
$
(2)
—
3
48
—
1
50
(7,779) $
(2)
—
(5)
(77)
22
8
(54)
562 $
2
28
(3)
176
—
(4)
199
6,102
D Net of tax of $(2), $3 and $2 in 2015, 2014 and 2013, respectively. The 2015 amount includes a lower of cost or market inventory adjustment for hedged natural
(b)
(c)
(d)
(e)
gas of $(2).
Net of tax of $(27), $44 and $(101) in 2015, 2014 and 2013, respectively. See Note 13, Retirement and Postretirement Benefit Plans, for additional information.
Net of tax of $(14) in 2014.
Net of tax of $(1), $(5) and $2 in 2015, 2014 and 2013, respectively.
There were no other comprehensive income (loss) items related to noncontrolling interests in 2015, 2014 and 2013.
Consolidated Statements of Stockholders' Equity
LQPLOOLRQV
Equity Attributable to Common Stock
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Treasury
Stock
Retained
Earnings
²
²
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²
²
²
²
²
²
²
²
²
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²
²
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²
²
²
²
²
²
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²
²
²
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²
²
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²
²
²
²
²
²
²
²
²
²
²
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²
²
²
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²
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Total
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²
Noncontrolling
Interest
²
Accumulated
Other
Comprehensive
Income (Loss)
1HWLQFRPH
%DODQFH'HFHPEHU
(a)
Common
Stock
Additional
Paid-in
Capital
²
Consolidated Statements of Cash Flows
DQG6XEVLGLDULHV
LQPLOOLRQV
2015
2014
2013
CASH FLOW FROM OPERATING ACTIVITIES
Net income (loss)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation, depletion and amortization of assets
Deferred income tax provision (benefit)
Other noncash charges to income
Gain on sale of equity investments and other assets
Undistributed earnings from equity investments
Dry hole expenses
Changes in operating assets and liabilities:
Decrease (increase) in receivables
Decrease (increase) in inventories
Decrease in other current assets
(Decrease) increase in accounts payable and accrued liabilities
(Decrease) increase in current domestic and foreign income taxes
Other operating, net
Operating cash flow from continuing operations
Operating cash flow from discontinued operations, net of taxes
Net cash provided by operating activities
$
(7,829) $
630
$
5,903
(317)
4,544
(1,372)
159
9,684
(101)
6
10
(760)
4,261
(1,178)
101
7,379
(2,505)
38
99
(971)
4,203
914
261
621
(1,175)
(3)
70
1,431
(24)
33
(1,989)
(331)
(650)
3,254
97
3,351
1,413
(112)
89
(530)
(54)
—
8,871
2,197
11,068
(747)
79
58
265
369
382
10,229
2,549
12,778
(5,272)
(592)
(109)
819
(269)
(5,423)
—
(5,423)
(8,930)
542
(1,687)
4,177
(346)
(6,244)
(2,226)
(8,470)
(7,357)
149
(606)
1,619
(122)
(6,317)
(1,727)
(8,044)
2,826
—
1,478
—
37
(593)
—
(2,264)
—
1,484
—
1,484
(4,019)
6,100
—
(107)
33
(2,500)
375
(2,210)
2
(2,326)
124
(2,202)
—
—
—
(690)
30
(943)
214
(1,553)
9
(2,933)
—
(2,933)
(588)
3,789
3,201 $
396
3,393
3,789
1,801
1,592
3,393
CASH FLOW FROM INVESTING ACTIVITIES
Change in capital accrual
Payments for purchases of assets and businesses
Sales of equity investments and assets, net
Other, net
Investing cash flow from continuing operations
Investing cash flow from discontinued operations
Net cash used by investing activities
CASH FLOW FROM FINANCING ACTIVITIES
Change in restricted cash
Special cash distributions from California Resources
Proceeds from long-term debt
Payments of long-term debt
Proceeds from issuance of common stock
Contributions from noncontrolling interest
Cash dividends paid
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Financing cash flow from continuing operations
Financing cash flow from discontinued operations
Net cash provided (used) by financing activities
Increase (decrease) in cash and cash equivalents
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Cash and cash equivalents — end of year
$
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in millions
Additions to capitalized exploratory well costs pending the determination of proved reserves
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Capitalized exploratory well costs charged to expense
$
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2014
141 $
82
(78)
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2013
140 $
462
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(21)
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DFUHDJH
For the years ended December 31, (in millions)
OIL AND GAS
United States
Impairments and related charges of exiting operations
2015
$
Impairments related to decline in commodity prices and changes in future development
plans
Rig termination charges
Other asset impairment related charges
2014
1,862
(a)
$
2013
3,253
$
485
1,428
192
204
1,381
—
119
122
—
—
Latin America
Impairments related to decline in commodity prices
559
57
—
Middle East and North Africa
Impairments of exiting operations
Impairments related to decline in commodity prices
1,658
2,833
918
91
—
—
CHEMICAL
Impairments of assets
121
149
—
MIDSTREAM AND MARKETING
Century gas processing plant
Other asset impairment related charges
814
216
—
40
—
14
CORPORATE
Other-than-temporary impairment of investment in California Resources
Joslyn impairment
Severance, spin-off and other
227
—
125
553
805
13
—
—
—
$
(a)
A portion of the 2015 charges are reported in the Midstream and Marketing segment.
10,239
$
7,379
$
621
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Beginning balance
Liabilities incurred – capitalized to PP&E
Liabilities settled and paid
Accretion expense
Acquisitions, dispositions and other – changes in PP&E
Revisions to estimated cash flows – changes in PP&E
Ending balance
$
$
2015
1,091 $
46
(35)
54
(209)
—
177
1,124 $
2014
1,332
57
(78)
69
(11)
(399)
121
1,091
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,Q-XQHWKH)$6%LVVXHGUXOHVDIIHFWLQJHQWLWLHVWKDWJUDQWWKHLUHPSOR\HHVVKDUHEDVHGSD\PHQWDZDUGVLQ
ZKLFKWKHWHUPVRIWKHDZDUGVSURYLGHWKDWDSHUIRUPDQFHWDUJHWFDQEHDFKLHYHGDIWHUWKHUHTXLVLWHVHUYLFHSHULRG7KH
QHZUXOHVUHTXLUHWKDWDSHUIRUPDQFHWDUJHWWKDWDIIHFWVYHVWLQJDQGWKDWFRXOGEHDFKLHYHGDIWHUWKHUHTXLVLWHVHUYLFH
SHULRGEHWUHDWHGDVDSHUIRUPDQFHFRQGLWLRQ(QWLWLHVPD\DSSO\WKHXSGDWHHLWKHUDSURVSHFWLYHO\WRDOODZDUGVJUDQWHG
RUPRGLILHGDIWHUWKHHIIHFWLYHGDWHRUEUHWURVSHFWLYHO\WRDOODZDUGVZLWKSHUIRUPDQFHWDUJHWVWKDWDUHRXWVWDQGLQJDV
RIWKHEHJLQQLQJRIWKHHDUOLHVWDQQXDOSHULRGSUHVHQWHGLQWKHILQDQFLDOVWDWHPHQWVDQGWRDOOQHZRUPRGLILHGDZDUGV
WKHUHDIWHU7KHVHUXOHVDUHHIIHFWLYHIRUDQQXDOSHULRGVEHJLQQLQJRQRUDIWHU'HFHPEHU7KHUXOHVGRQRWKDYH
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NOTE 4
INVENTORIES
1HWFDUU\LQJYDOXHVRILQYHQWRULHVYDOXHGXQGHUWKH/,)2PHWKRGZHUHDSSUR[LPDWHO\PLOOLRQDQGPLOOLRQDW
'HFHPEHUDQGUHVSHFWLYHO\,QYHQWRULHVFRQVLVWHGRIWKHIROORZLQJ
Balance at December 31, (in millions)
Raw materials
Materials and supplies
Finished goods
2015
$
Revaluation to LIFO
Total
NOTE 5
$
2014
73 $
568
395
1,036
(50)
986 $
71
585
485
1,141
(89)
1,052
LONG-TERM DEBT
/RQJWHUPGHEWFRQVLVWHGRIWKHIROORZLQJ
2.50% senior notes due 2016
9.25% senior debentures due 2019
8.75% medium-term notes due 2023
Variable rate bonds due 2030 (0.15% and 0.04% as of December 31, 2015 and 2014, respectively )
2015
2014
$
Less:
Unamortized discount, net
Current maturities
Total
700
750
1,250
500
116
1,249
813
1,191
22
—
82
116
—
68
6,857
$
(19)
—
6,838
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NOTE 6
LEASE COMMITMENTS
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LQVXUDQFHDQGPDLQWHQDQFHH[SHQVHZHUHWKHIROORZLQJ
Amount
179
148
169
90
81
508
$
1,175
(in millions)
2016
2017
2018
2018
2020
Thereafter
Total minimum lease payments
$
5HQWDOH[SHQVHIRURSHUDWLQJOHDVHVZDVPLOOLRQLQPLOOLRQLQDQGPLOOLRQLQ
NOTE 7
DERIVATIVES
Objective & Strategy
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LQVLJQLILFDQW
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Cash-Flow Hedges
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2FFLGHQWDO¶V1RUWK$PHULFDQOHDVHGVWRUDJHIDFLOLWLHV'HULYDWLYHLQVWUXPHQWVDUHXVHGWRIL[PDUJLQVRQWKHIXWXUHVDOHVRIWKH
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JDVKHOGLQVWRUDJHDQGKDGFDVKIORZKHGJHVIRUWKHIRUHFDVWHGVDOHVWREHVHWWOHGE\SK\VLFDOGHOLYHU\RIDSSUR[LPDWHO\
ELOOLRQFXELFIHHWRIVWRUHGQDWXUDOJDV$VRI'HFHPEHU2FFLGHQWDOGLGQRWKDYHDQ\FDVKIORZKHGJHV
7KHIROORZLQJWDEOHSUHVHQWVWKHDIWHUWD[JDLQVDQGORVVHVUHFRJQL]HGLQDQGUHFODVVLILHGWRLQFRPHIURP$FFXPXODWHG
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'HFHPEHUDQG
After-tax
2015
$VRI'HFHPEHULQPLOOLRQV
Unrealized gains (losses) recognized in AOCI
Losses reclassified to income
$
$
2014
5
—
(5)
8
$
$
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Derivatives Not Designated as Hedging Instruments
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Net Outstanding Position
Long / (Short)
Commodity
2015
Oil (million barrels)
Natural gas (billion cubic feet)
CO2 (billion cubic feet)
2014
83
(58)
603
(9)
(32)
621
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SULFHV
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SRVLWLRQV
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Fair Value of Derivatives
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DQG
(in millions)
Asset Derivatives
Balance Sheet Location
December 31, 2015
Fair
Value
Liability Derivatives
Fair
Value
Cash-flow hedges (a)
Commodity contracts
$
9
Deferred credits and other liabilities
$
—
9
626
9
635
644
Accrued liabilities
Accrued liabilities
$
1
$
—
1
Derivatives not designated as
hedging instruments (a)
Commodity contracts
Total gross fair value
Less: counterparty netting and
cash collateral (b) (d)
Total net fair value of
derivatives
$
$
(535)
$
672
275
947
948
(525)
109
$
423
(in millions)
Asset Derivatives
December 31, 2014
Cash-flow hedges (a)
Commodity contracts
Fair
Value
$
$
Liability Derivatives
—
—
—
Accrued liabilities
828
11
839
839
Accrued liabilities
Fair
Value
$
$
—
—
—
Derivatives not designated as
hedging instruments (a)
Commodity contracts
Total gross fair value
Less: counterparty netting and
cash collateral (c) (d)
Total net fair value of
derivatives
(a)
(b)
(c)
(d)
$
$
(742)
$
97
886
110
996
996
(756)
$
240
Fair values are presented at gross amounts, including when the derivatives are subject to master netting arrangements and presented on a net basis in the consolidated
balance sheets.
As of December 31, 2015, collateral received of $14 million has been netted against derivative assets and collateral paid of $4 million has been netted against derivative
liabilities.
As of December 31, 2014, collateral received of zero has been netted against derivative assets and collateral paid of $8 million has been netted against derivative
liabilities.
Select clearinghouses and brokers require Occidental to post an initial margin deposit. Collateral, mainly for initial margin, of $3 million and $44 million as of December
31, 2015 and 2014, respectively, deposited by Occidental, has not been reflected in these derivative fair value tables. This collateral is included in other current assets
in the consolidated balance sheets.
See Note 15 for fair value measurement disclosures on derivatives.
Credit Risk
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NOTE 8
ENVIRONMENTAL LIABILITIES AND EXPENDITURES
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($ amounts in millions)
NPL sites
Third-party sites
Occidental-operated sites
Closed or non-operated Occidental sites
Total
2015
Number of
Reserve
Sites
Balance
34 $
27
66
128
18
107
31
124
149 $
386
2014
Number of
Reserve
Sites
Balance
30 $
23
67
101
17
107
31
103
145 $
334
2013
Number of
Reserve
Sites
Balance
31 $
25
74
83
20
118
32
104
157 $
330
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2015
(in millions)
Remediation expenses and interest accretion
Payments
$
2014
334 $
117
—
(65)
386 $
$
2013
330 $
79
(7)
(68)
334 $
344
60
—
(74)
330
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2015
(in millions)
Operating Expenses
Oil and Gas
Chemical
$
93
74
13
180
$
$
$
122
41
4
167
$
117
$
Capital Expenditures
Oil and Gas
Chemical
$
Remediation Expenses
Corporate
2014
2013
103
80
11
194
$
$
$
143
35
11
189
$
67
14
5
86
$
79
$
60
$
$
100
75
13
188
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NOTE 10
DOMESTIC AND FOREIGN INCOME TAXES
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ZHUHDVIROORZV
2015
$
2014
$
2013
$
Domestic
Foreign
(5,810) $
(3,666) $
(732) $
3,399
$
Total
(9,476)
2,273
$
1,541
4,747
$
8,146
7KHSURYLVLRQVFUHGLWVIRUGRPHVWLFDQGIRUHLJQLQFRPHWD[HVRQFRQWLQXLQJRSHUDWLRQVFRQVLVWHGRIWKHIROORZLQJ
United States
Federal
2015
Current
Deferred
$
$
2014
Current
Deferred
$
$
2013
Current
Deferred
$
$
State
and Local
Foreign
Total
(810) $
(1,146)
(1,956) $
(31) $
(83)
(114) $
883 $
(143)
740 $
42
(1,372)
(1,330)
870 $
(1,037)
(167) $
81 $
(71)
10 $
1,912 $
(70)
1,842 $
2,863
(1,178)
1,685
17
48
65
2,170 $
(17)
2,153 $
2,300
914
3,214
113
883
996
$
$
$
$
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UDWHRQLQFRPHIURPFRQWLQXLQJRSHUDWLRQVLVVWDWHGDVDSHUFHQWDJHRISUHWD[LQFRPH
United States federal statutory tax rate
Other than temporary loss on available for sale investment in California Resources stock
Operations outside the United States
State income taxes, net of federal benefit
Other
Worldwide effective tax rate
2015
2014
35%
(1)
(21)
1
—
14%
2013
35%
12
65
1
(4)
109%
35%
—
5
1
(1)
40%
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IROORZV
2015
Deferred Tax
Deferred Tax
Assets
Liabilities
$
— $
3,232
—
12
136
—
346
—
179
—
372
—
2,034
—
11
—
677
—
3,755
3,244
(1,834)
—
$
1,921 $
3,244
Tax effects of temporary differences (in millions)
Property, plant and equipment differences
Equity investments, partnerships and foreign subsidiaries
Environmental reserves
Postretirement benefit accruals
Deferred compensation and benefits
Asset retirement obligations
Foreign tax credit carryforwards
Federal benefit of state income taxes
All other
Subtotal
Valuation allowance
Total deferred taxes
2014
Deferred Tax
Deferred Tax
Assets
Liabilities
$
— $
4,081
—
—
123
—
379
—
208
—
307
—
1,765
—
85
—
274
221
3,141
4,302
(1,744)
—
$
1,397 $
4,302
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Balance at January 1,
Reductions based on tax positions related to prior years and settlements
Balance at December 31,
2015
$
$
2014
61 $
(39)
22 $
61
—
61
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NOTE 11
STOCKHOLDERS' EQUITY
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Shares in thousands
Balance, December 31, 2012
Issued
Options exercised and other, net
Issued
Issued
Common Stock
888,801
826
292
889,919
584
55
890,558
782
20
891,360
75($685<672&.
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RIVKDUHVDQGPD\EHGLVFRQWLQXHGDWDQ\WLPH,QDQGUHVSHFWLYHO\2FFLGHQWDOSXUFKDVHGPLOOLRQDQG
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1215('((0$%/(35()(55('672&.
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($51,1*63(56+$5(
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2015
Less: Income from continuing operations attributable to noncontrolling interest
Income (loss) from contributing operations attributable to common stock
Net income (loss)
Less: Net income allocated to participating securities
Net income (loss), net of participating securities
Weighted average number of basic shares
$
Net income (loss), net of participating securities
Weighted average number of basic shares
Dilutive securities
Total diluted weighted average common shares
$
$
$
$
2014
2013
(8,146) $
—
(8,146)
317
(7,829)
—
(7,829) $
765.6
(10.23) $
(130) $
(14)
(144)
760
616
—
616 $
781.1
0.79 $
4,932
—
4,932
971
5,903
(13)
5,890
804.1
7.33
(7,829) $
765.6
—
765.6
(10.23) $
616
781.1
—
781.1
0.79
5,890
804.1
0.5
804.6
7.32
$
$
$&&808/$7('27+(5&2035(+(16,9(/266
$FFXPXODWHGRWKHUFRPSUHKHQVLYHORVVFRQVLVWHGRIWKHIROORZLQJDIWHUWD[DPRXQWV
Foreign currency translation adjustments
Unrealized losses on derivatives
Pension and post-retirement adjustments (a)
Total
(a)
2015
$
$
2014
(9) $
(7)
(291)
(307) $
(7)
(11)
(339)
(357)
See Note 13 for further information.
NOTE 12
STOCK-BASED INCENTIVE PLANS
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Compensation expense
Income tax benefit recognized in the income statement
Intrinsic value of options and stock-settled SARs exercised
Cash paid (a)
Fair value of RSUs and TSRIs vested during the year (b)
(a)
(b)
2015
$
2014
49
17
—
41
42
$
2013
129
46
5
95
56
$
152
55
24
96
83
Includes cash paid under the cash-settled portion of the SARs, RSUs and TSRIs.
As measured on the vesting date for the stock-settled portion of the RSUs and TSRIs.
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Unvested at January 1
Granted
Vested
Forfeitures
Unvested at December 31
RSUs
(000's)
1,117
678
(540)
(125)
1,130
Cash-Settled
Weighted-Average
Grant-Date
Fair Value
$
89.42
72.64
87.06
84.17
81.06
RSUs
(000's)
1,425
885
(388)
(164)
1,758
Stock-Settled
Weighted-Average
Grant-Date
Fair Value
$
88.98
72.54
87.99
86.11
81.19
765,V
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Year Granted
Assumptions used:
Risk-free interest rate
Dividend yield
Volatility factor
Expected life (years)
Grant-date fair value of underlying Occidental common stock
TSRIs
2014
2015
$
0.9%
4.1%
37%
3
72.54 $
2013
1.0%
2.8%
27%
3
101.95 $
0.6%
2.8%
30%
3
91.97
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Awards
(000’s)
573
147
(70)
(304)
346
Unvested at January 1 (a)
Granted (a)
Vested (a)
Forfeitures
(a)
TSRIs
Weighted-Average
Grant-Date Fair
Value of Occidental Stock
$
84.22
72.54
80.40
79.99
83.75
Presented at the target or mid-point payouts.
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SARs & Options
(000's)
WeightedAverage Exercise
Price
Aggregate
Intrinsic Value
(000’s)
Beginning balance, January 1
61
Exercised
(14)
38.72
Granted
669
79.98
Forfeited
(87)
79.98
Ending balance, December 31
629
77.58
5.7
$
936
64
45.78
2.0
$
936
Exercisable at December 31
$
WeightedAverage
Remaining
Contractual Term
(yrs)
45.78
52&(,52$,
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Awards
(000's)
282
136
(26)
392
Unvested at January 1
Granted
Forfeited
ROCEI / ROAI
Weighted-Average
Grant-Date
Fair Value of Occidental Stock
$
92.25
72.54
91.98
85.43
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NOTE 13
RETIREMENT AND POSTRETIREMENT BENEFIT PLANS
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2%/,*$7,216$1')81'('67$786
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(in millions)
As of December 31,
Amounts recognized in the consolidated balance sheet:
Other assets
Accrued liabilities
Deferred credits and other liabilities — other
Pension Benefits
2015
2014
$
$
AOCI included the following after-tax balances:
Net loss
Prior service cost
$
$
Changes in the benefit obligation:
Benefit obligation — beginning of year
Service cost — benefits earned during the period
Interest cost on projected benefit obligation
Actuarial (gain) loss
Foreign currency exchange rate (gain) loss
Benefits paid
Settlements
Benefit obligation — end of year
$
57 $
(6)
(68)
(17) $
— $
(58)
(921)
(979) $
93
—
93
83
—
83
197
1
198
$
$
$
$
$
—
(57)
(980)
(1,037)
$
255
1
256
1,016
24
44
83
—
(72)
(59)
—
1,036
523 $
11
23
53
(9)
(105)
(43)
—
453 $
1,036 $
26
40
(66)
—
—
(57)
—
979 $
$
436 $
(21)
—
11
(42)
—
384 $
538 $
24
7
(90)
(43)
—
436 $
—
—
—
—
—
—
—
$
(27) $
(17) $
$
Funded/(Unfunded) status:
45 $
(7)
(65)
(27) $
453 $
7
18
(16)
(9)
—
(42)
—
411 $
$
Changes in plan assets:
Fair value of plan assets — beginning of year
Actual return on plan assets
Employer contributions
Benefits paid
Settlements
Fair value of plan assets — end of year
Postretirement Benefits
2015
2014
$
$
—
—
—
—
—
—
—
(979) $
(1,036)
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VGHILQHGEHQHILWSHQVLRQSODQV
(in millions)
As of December 31,
Projected Benefit Obligation
Accumulated Benefit Obligation
Fair Value of Plan Assets
$
$
$
Accumulated Benefit
Obligation in Excess of
Plan Assets
2015
2014
160 $
173
156 $
168
88 $
100
2FFLGHQWDOGRHVQRWH[SHFWDQ\SODQDVVHWVWREHUHWXUQHGGXULQJ
$
$
$
Plan Assets
in Excess of Accumulated
Benefit Obligation
2015
2014
251 $
280
251 $
280
296 $
336
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Net periodic benefit costs:
Service cost — benefits earned during the period
Interest cost on projected benefit obligation
Expected return on plan assets
Recognized actuarial loss
Other costs and adjustments
Net periodic benefit cost
2015
$
$
Pension Benefits
2014
2013
7 $
18
(27)
10
(4)
4 $
11 $
23
(33)
6
(8)
(1) $
13 $
24
(31)
19
(13)
12 $
2015
2014
2013
26
40
—
27
1
94
$
$
24
44
—
20
1
89
$
29
43
—
38
1
111
$
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Pension Benefits
2015
2014
Benefit Obligation Assumptions:
Discount rate
Rate of compensation increase
Net Periodic Benefit Cost Assumptions:
Discount rate
Assumed long term rate of return on assets
Rate of compensation increase
(a)
4.14%
—
3.81%
6.50%
—
(a)
(a)
2015
2014
3.81%
—
4.36%
—
3.99%
—
4.45%
6.50%
4.00%
3.99%
—
—
4.75%
—
—
Plans requiring a salary increase assumption were separated with California Resources in 2014.
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DFURVV8QLWHG6WDWHVDQGQRQ8QLWHG6WDWHVVWRFNVDVZHOODVGLIIHULQJVW\OHVDQGPDUNHWFDSLWDOL]DWLRQV2WKHUDVVHWFODVVHV
VXFKDVSULYDWHHTXLW\DQGUHDOHVWDWHPD\EHXVHGZLWKWKHJRDOVRIHQKDQFLQJORQJWHUPUHWXUQVDQGLPSURYLQJSRUWIROLR
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(in millions)
Fair Value Measurements at December 31, 2015 Using
Level 1
Level 2
Level 3
Total
Description
Asset Class:
U.S. government securities
Corporate bonds (a)
Common/collective trusts (b)
Mutual funds:
Bond funds
Blend funds
Common and preferred stocks (c)
Other
Total pension plan assets (d)
$
16
—
—
33
48
169
—
266
$
(in millions)
Description
Asset Class:
U.S. government securities
Corporate bonds (a)
Common/collective trusts (b)
Mutual funds:
Bond funds
Blend funds
Common and preferred stocks (c)
Other
Total pension plan assets (d)
(a)
(b)
(c)
(d)
Level 1
$
$
—
78
12
—
—
—
29
119
$
$
—
—
—
$
—
—
—
—
—
$
16
78
12
33
48
169
29
385
Level 2
Level 3
Total
15
—
—
42
68
196
—
321
$
$
$
$
—
76
13
—
—
—
38
127
$
$
—
—
—
—
—
—
1
1
$
$
15
76
13
42
68
196
39
449
This category represents investment grade bonds of U.S. and non-U.S. issuers from diverse industries.
This category includes investment funds that primarily invest in U.S. and non-U.S. common stocks and fixed-income securities.
This category represents direct investments in common and preferred stocks from diverse U.S. and non-U.S. industries.
Amounts exclude net payables of approximately $1 million and $13 million as of December 31, 2015 and 2014, respectively.
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Pension
Benefits
2016
2017
2018
2019
2020
2021 - 2025
NOTE 14
$
$
$
$
$
$
42
35
34
34
35
226
Postretirement
Benefits
$
59
$
60
$
60
$
60
$
60
$
301
INVESTMENTS AND RELATED-PARTY TRANSACTIONS
(48,7<,19(670(176
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Revenues
Costs and expenses
Net income
$
As of December 31, (in millions)
Current assets
Non-current assets
Current liabilities
Long-term debt
Other non-current liabilities
$
$
$
$
$
$
$
2015
1,050
827
223
$
2014
3,090
2,774
316
$
$
$
$
$
$
2014
1,127
2,925
771
1,701
83
1,498
$
2015
896
3,589
536
2,141
148
1,659
$
$
2013
3,373
2,987
386
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$9$,/$%/()256$/(,19(670(17,1&$/,)251,$5(6285&(6672&.
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5(/$7('3$57<75$16$&7,216
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UHODWHGSDUWLHV
2015
2014
2013
Sales (a)
$
555
$
835
$
663
Purchases
$
26
$
6
$
—
Services
$
32
$
27
$
30
Advances and amounts due from
$
60
$
26
$
67
Amounts due to
$
5
$
15
$
3
(a)
In 2015, 2014 and 2013, sales of Occidental-produced oil and NGLs to Plains Pipeline accounted for 87 percent, 46 percent and 72 percent of these totals, respectively.
Additionally, Occidental conducts marketing and trading activities with Plains Pipeline for oil and NGLs. These transactions are reported in Occidental's income
statement on a net margin basis. The sales amounts above include the net margins on such transactions, which were negligible.
NOTE 15
FAIR VALUE MEASUREMENTS
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EDVLV
(in millions)
Description
Assets:
Commodity derivatives
Liabilities:
Level 1
Level 2
Netting and
Collateral
Level 3
Total
Fair Value
$
$
557
167
$
$
87
—
$
$
—
—
$
$
(535) $
— $
109
167
$
544
$
404
$
—
$
(525) $
423
(in millions)
Description
Assets:
Liabilities:
Level 1
Level 2
Netting and
Collateral
Level 3
Total
Fair Value
$
$
712
394
$
$
127
—
$
$
—
—
$
$
(742) $
— $
97
394
$
750
$
246
$
—
$
(756) $
240
)$,59$/8(6±1215(&855,1*
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RIIXWXUHFDVKIORZV7KHVHDVVXPSWLRQVLQFOXGHGHVWLPDWHVRIIXWXUHSURGXFWSULFHVZKLFK2FFLGHQWDOEDVHGRQIRUZDUG
SULFHFXUYHVDQGZKHUHDSSOLFDEOHFRQWUDFWXDOSULFHVHVWLPDWHVRIRLODQGJDVUHVHUYHVHVWLPDWHVRIIXWXUHH[SHFWHGRSHUDWLQJ
DQGGHYHORSPHQWFRVWVDQGDULVNDGMXVWHGGLVFRXQWUDWHRISHUFHQW7KHVHSURSHUWLHVZHUHLPSDFWHGE\SHUVLVWHQWO\
ZRUOGZLGH ORZ RLO DQG QDWXUDO JDV SULFHV DQG FKDQJLQJ PDQDJHPHQW
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,QWKHIRXUWKTXDUWHU2FFLGHQWDOUHFRJQL]HGDSSUR[LPDWHO\PLOOLRQLQSUHWD[LPSDLUPHQWFKDUJHVIRUD0LGVWUHDP
&2WUHDWPHQWSODQWUHODWHGWRUHFXUULQJ&2VKRUWIDOOVDQGXQSDLGSHQDOW\IHHV
,Q2FFLGHQWDOUHFRJQL]HGDSSUR[LPDWHO\PLOOLRQSUHWD[FKDUJHVUHODWHGWRWKHLPSDLUPHQWVRI&KHPLFDODVVHWV
(in millions)
Description
Level 1
Level 2
Total Pre-tax
(Non-cash)
Impairment
Loss
Net
Book Value (a)
Level 3
Assets:
Impaired proved oil and gas assets international
$
—
$
—
$
2,666
$
7,359
$
4,693
Impaired proved oil and gas assets domestic
$
—
$
—
$
625
$
1,655
$
1,030
Impaired Midstream assets
$
—
$
—
$
50
$
891
$
841
Impaired Chemical property, plant, and
equipment
$
—
$
—
$
3
$
124
$
121
(in millions)
Fair Value Measurements at September 30, 2015 Using
Description
Williston proved oil and gas assets (b)
Level 1
—
$
(in millions)
Level 2
Net
Book Value (a)
Level 3
—
$
$
615
$
1,378
Description
Level 1
Level 2
Total Pre-tax
(Non-cash)
Impairment
Loss
Net
Book Value (a)
Level 3
$
763
Total Pre-tax
(Non-cash)
Impairment Loss
Assets:
Impaired proved oil and gas assets domestic
$
—
$
—
$
2,249
$
5,008
$
2,759
Impaired proved oil and gas assets international
$
—
$
—
$
45
$
1,084
$
1,039
Impaired Chemical property, plant, and
equipment
$
—
$
—
$
18
$
129
$
111
(a)
Amount represents net book value at date of assessment.
(b)
Williston assets sold in November 2015, classified as held for sale and written down to the sales price at September 30, 2015.
),1$1&,$/,167580(176)$,59$/8(
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NOTE 16
INDUSTRY SEGMENTS AND GEOGRAPHIC AREAS
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Industry Segments
(in millions)
Oil and Gas
Midstream
and
Marketing
Chemical
Corporate
and
Eliminations
Total
Year ended December 31, 2015
Net sales
$
8,304
(a)
$
3,945
(b)
$
891
Pretax operating profit (loss)
Income taxes
Property, plant and equipment additions, net (k)
$
$
$
$
$
$
$
542
—
—
542
550
271
371
(e)
$
$
$
$
(8,060)
—
—
(8,060)
4
4,485
3,886
(d)
$
$
$
$
(1,194)
—
—
(1,194)
708
611
249
Total assets
$
23,591
$
3,982
$
10,175
Net sales
$
13,887
(a)
$
4,817
(b)
$
1,373
Net income attributable to noncontrolling interest
Income taxes
$
$
$
$
$
$
$
420
—
—
—
420
202
325
367
(e)
$
$
$
$
428
—
—
—
428
11
6,589
3,701
(d)
$
$
$
$
2,578
(14)
—
—
2,564
948
2,093
160
Total assets
$
31,072
$
3,917
$
12,283
Net sales
$
15,008
(a)
$
4,673
(b)
$
1,174
Income taxes
$
$
$
$
$
$
$
743
—
—
743
34
435
346
(e)
$
$
$
$
6,411
—
—
6,411
108
5,456
3,676
(d)
$
$
$
$
1,523
—
—
1,523
1,307
1,437
149
Total assets
$
46,213
$
3,947
$
14,374
(c)
$
(660)
(f)
$
$
$
$
$
(764)
1,330
317
883
5
42
38
$
5,689
(c)
$
(765)
(f)
$
$
$
$
$
(1,871)
—
(1,685)
760
(2,796)
10
103
33
$
8,987
(c)
$
(685)
(f)
$
$
$
$
$
(531)
(3,214)
971
(2,774)
10
166
32
$
4,909
(g)
$
12,480
$
$
$
$
$
(9,476)
1,330
317
(7,829)
1,267
5,409
4,544
$
43,437
$
19,312
$
$
$
$
$
1,555
(14)
(1,685)
760
616
1,171
9,110
4,261
$
56,259
$
20,170
$
$
$
$
$
8,146
(3,214)
971
5,903
1,459
7,494
4,203
$
69,443
(h)
(i)
(g)
(h)
(i)
(See footnotes on next page)
(g)
(h)
(i)
Footnotes:
(a) Oil sales represented approximately 90 percent, 90 percent and 91 percent of the oil and gas segment net sales for the years ended December 31, 2015, 2014 and
2013, respectively.
(b) Net sales for the chemical segment comprised the following products:
Basic Chemicals
(c)
Vinyls
Other Chemicals
56%
40%
4%
54%
55%
43%
42%
3%
3%
Power
Marketing,
Transportation and other *
Net sales for the midstream and marketing segment comprised the following:
Gas Processing
70%
31%
(1)%
49%
54%
31%
30%
20%
16%
Revenue from all marketing and trading activities is reported on a net basis.
(d)
(e)
(f)
(g)
(h)
(i)
(j)
The 2015 amount includes pre-tax charges of $5 billion for impairment of international oil and gas assets and related items and $3.5 billion for the impairment of
domestic oil and gas assets and related items. The 2014 amount includes pre-tax charges of $4.7 billion for the impairment of domestic oil and gas assets, pre-tax
charges of $1.1 billion for the impairment of foreign oil and gas assets, and pre-tax gain of $531 million for the sale of the Hugoton field. The 2013 amount includes
pre-tax charges of $607 million for the impairment of domestic non-producing acreage.
The 2015 amount includes the pre-tax charge of $121 million related to asset impairment partially offset by a $98 million gain on sale of an idled facility. The 2014
amount includes the pre-tax charge of $149 million related to asset impairment. The 2013 amount includes a pre-tax gain of $131 million for the sale of an investment
in Carbocloro.
The 2015 amount includes pre-tax charges of $1.3 billion related asset impairments and related items. The 2014 amount includes pre-tax gains of $633 million and
$1,351 million for the sales of BridgeTex Pipeline and a portion of an investment in Plains Pipeline, respectively, and other charges of $31 million. The 2013 amount
includes a pre-tax gain of $1,044 million for the sale of a portion of an investment in Plains Pipeline and other items of $58 million.
Includes unallocated net interest expense, administration expense, environmental remediation and other pre-tax items noted in footnote (j) below.
Includes all foreign and domestic income taxes from continuing operations.
Includes discontinued operations from Ecuador and California Resources.
Includes the following significant items affecting earnings for the years ended December 31:
Benefit (Charge) (in millions)
2015
2014
2013
CORPORATE
Pre-tax operating profit (loss)
Asset sale losses
Asset impairments
Severance, spin-off and other items
$
$
Income taxes
Tax effect of pre-tax and other adjustments *
$
(8) $
(235)
(118)
(361) $
1,903
$
— $
(1,358)
(61)
(1,419) $
927
$
—
—
(55)
(55)
(167)
* Amounts represent the tax effect of the pre-tax adjustments listed in this note, as well as those in footnotes (d), (e) and (f).
(k)
Includes capital expenditures and capitalized interest, but excludes acquisition and disposition of assets.
*(2*5$3+,&$5($6
(in millions)
United States
Foreign
Oman
Qatar
Colombia
United Arab Emirates
Other Foreign
Total Foreign
Total
(a)
$
2015
7,479
Net sales (a)
2014
11,943
$
$
1,631
1,449
570
477
874
5,001
12,480
2,524
2,803
938
—
1,104
7,369
19,312
$
$
2013
11,724
$
2,567
2,995
1,022
—
1,862
8,446
20,170
Sales are shown by individual country based on the location of the entity making the sale.
$
$
Property, plant and equipment, net
2015
2014
2013
23,265 $
26,673 $
42,956
1,292
1,354
821
4,484
423
8,374
31,639
$
2,876
2,605
1,396
4,312
1,868
13,057
39,730
$
2,509
2,605
1,259
3,131
3,361
12,865
55,821
NOTE 17
SPIN-OFF OF CALIFORNIA RESOURCES CORPORATION
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IROORZV
Sales and other operating revenue from discontinued operations
Income from discontinued operations before-tax
Income tax expense
$
$
2014
3,951
1,205
440
765
$
$
2013
4,285
1,531
541
990
2015 Quarterly Financial Data8QDXGLWHG
DQG6XEVLGLDULHV
Three months ended
March 31
June 30
September 30
December 31
$
$
Segment net sales
Oil and gas
$
2,009
Chemical
Midstream, marketing and other
Eliminations
$
2,342
2,054
1,899
1,000
1,030
1,008
907
197
(117)
294
(197)
231
(177)
169
(169)
Net sales
$
3,089
$
3,469
$
3,116
$
2,806
Gross profit
$
396
$
766
$
501
$
126
$
(266)
$
355
$
(3,128)
$
(5,021)
(a)
(5)
(b)
(c)
Segment earnings
Oil and gas
(a)
(a)
(b)
Chemical
139
136
272
(15)
87
24
(1,290)
(142)
578
(2,832)
(6,316)
(28)
19
(64)
(7)
(324)
(67)
(47)
445
(172)
(59)
1,190
(320)
(215)
180
(2,606)
(5,505)
(3)
(4)
(3)
327
(5,178)
Income taxes
Other
$
(218)
$
176
$
(2,609)
$
(0.28)
$
0.23
$
(3.41)
$
(0.28)
$
0.23
$
$
(0.28)
$
0.23
$
(d)
(e)
Basic earnings per common share
—
—
$
(7.21)
(3.42)
$
(6.78)
(3.41)
$
(7.21)
(0.01)
0.43
Diluted earnings per common share
—
—
(0.01)
0.43
$
(0.28)
$
0.23
$
(3.42)
$
(6.78)
Dividends per common share
$
0.72
$
0.75
$
0.75
$
0.75
High
$
83.74
$
82.06
$
77.76
$
77.37
Low
$
71.70
$
73.35
$
63.60
$
64.89
Market price per common share
(a)
(b)
(c)
(d)
(e)
Includes pre-tax charges of $310 million in the first quarter, $3.3 billion in the third quarter and $4.9 billion related to oil and gas asset impairments and related items.
Includes third quarter pre-tax asset sale gain of $98 million related to an idled facility and the fourth quarter includes pre-tax charges of $121 million related to asset
impairments.
Includes fourth quarter pre-tax charges of $1.2 billion related to asset impairments and related items.
Includes pre-tax charges of $100 million related to severance and other items.
Includes fourth quarter pre-tax charges of an other than temporary loss of $227 million for available for sale investment in California Resources stock.
2014 Quarterly Financial Data8QDXGLWHG
DQG6XEVLGLDULHV
Three months ended
March 31
Segment net sales
Oil and gas
Chemical
Eliminations
Net sales
Gross profit
Segment earnings
Oil and gas
Chemical
Midstream, marketing and other (c)
Income taxes
Other
Income from continuing operations (c)
Net income
$
June 30
$
$
3,602
1,220
340
(194)
4,968
$
3,703
1,242
440
(252)
5,133
$
2,197
$
2,274
$
1,719
136
162
2,017
$
1,767
133
208
2,108
(20)
(794)
(68)
1,135
255
1,390
$
1.43
0.32
1.75
$
$
$
1.43
0.32
1.75
Dividends per common share
$
Market price per common share
High
Low
$
$
(a)
(b)
(c)
(d)
(e)
$
$
$
$
(18)
(809)
(123)
1,158
273
1,431
(a)
September 30
December 31
$
$
$
3,586
1,232
261
(175)
4,904
$
2,996
1,123
332
(144)
4,307
$
1,977
$
1,254
$
1,568
140
105
1,813
$
(4,626)
11
2,089
(2,526)
$
1.48
0.35
1.83
$
$
$
1.47
0.35
1.82
0.72
$
97.84
85.90
$
$
$
(15)
(699)
(104)
995
213
1,208
$
(18)
617
(1,505)
(3,432)
19
(3,413)
1.28
0.27
1.55
$
$
$
1.28
0.27
1.55
$
(4.44)
0.03
(4.41)
0.72
$
0.72
$
0.72
105.64
93.27
$
$
104.48
95.70
$
$
97.14
72.32
$
$
(a)
(b)
(d)
(e)
(4.44)
0.03
(4.41)
Includes second quarter pre-tax charges of $471 million related to the impairment of domestic non-producing acreage. Includes second quarter pre-tax gain of $531
million from sale of Hugoton Field. Includes fourth quarter pre-tax charges of $5.4 billion related to the impairment of oil and gas assets.
Includes fourth quarter pre-tax charges of $149 million related to the impairment of chemical assets.
Midstream, marketing and other segment earnings are net of non-controlling interest.
Includes fourth quarter pre-tax gains of $633 million from the sale of BridgeTex Pipeline and $1,351 million for the sale of a portion of an investment in Plains Pipeline.
Includes fourth quarter pre-tax charges of $805 million related to the impairment of Joslyn asset and an other than temporary loss of $553 million for available for
sale investment in California Resources stock.
Supplemental Oil and Gas Information8QDXGLWHG
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RWKHUZLVH
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Oil Reserves
in millions of barrels (MMbbl)
United
States
Latin
America
Middle East/
North Africa (a)
Total
PROVED DEVELOPED AND UNDEVELOPED RESERVES
Improved recovery
Purchases of proved reserves
Sales of proved reserves
Production
Improved recovery
Production
Revisions of previous estimates (b)
Improved recovery
Production
1,069
(36)
137
4
25
(4)
(64)
1,131
(54)
224
15
33
(9)
(67)
1,273
(220)
81
—
—
(146)
(73)
915
96
(5)
7
—
—
—
(10)
88
6
9
—
—
—
(11)
92
(10)
8
—
—
—
(13)
77
373
12
60
14
—
—
(65)
394
40
32
2
—
—
(63)
405
22
12
2
—
(51)
(73)
317
1,538
(29)
204
18
25
(4)
(139)
1,613
(8)
265
17
33
(9)
(141)
1,770
(208)
101
2
—
(197)
(159)
1,309
803
822
819
673
82
76
86
77
295
281
316
278
1,180
1,179
1,221
1,028
14
12
6
—
78
113
89
39
358
434
549
281
PROVED DEVELOPED RESERVES
December 31, 2012
December 31, 2013
December 31, 2014
December 31, 2015 (c)
(d)
PROVED UNDEVELOPED RESERVES
December 31, 2012
December 31, 2013
December 31, 2014
December 31, 2015 (e)
(a)
(b)
(c)
(d)
(e)
266
309
454
242
A majority of the proved reserve amounts relate to PSCs and other similar economic arrangements.
Revisions of previous estimates were primarily price and price-related.
Approximately 13 percent of the proved developed reserves at December 31, 2015 are nonproducing, primarily associated with Permian EOR.
Approximately one-third of the decrease in proved developed reserves at December 31, 2015 compared to the same prior year period is related to the sale of
Occidental's Williston assets.
A portion of the proved undeveloped reserves associated with the Al Hosn gas project is expected to be developed beyond five years and is tied to an approved long
term development project.
NGLs Reserves
LQPLOOLRQVRIEDUUHOV00EEO
United
States
Latin
America
Middle East/
North Africa
Total
Balance at December 31, 2012
Improved recovery
Production
Improved recovery
Production
Revisions of previous estimates (a)
Improved recovery
Production
156
53
9
—
7
(21)
204
6
37
2
3
(10)
(20)
222
(28)
12
—
—
—
(20)
186
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
116
(1)
—
22
—
(3)
134
8
—
—
—
—
(2)
140
10
1
—
—
—
(7)
144
272
52
9
22
7
(24)
338
14
37
2
3
(10)
(22)
362
(18)
13
—
—
—
(27)
330
124
151
147
141
—
—
—
—
53
51
109
112
177
202
256
253
32
53
75
45
—
—
—
—
63
83
31
32
95
136
106
77
December 31, 2012
December 31, 2013
December 31, 2014
December 31, 2015 (b)
December 31, 2012
December 31, 2013
December 31, 2014
(a)
(b)
(c)
Natural Gas Reserves
LQELOOLRQVRIFXELFIHHW%FI
United
States
Latin
America
Middle East/
North Africa (a)
Total
Improved recovery
Production
Improved recovery
Production
Revisions of previous estimates (b)
Improved recovery
Production
1,955
(46)
251
13
34
(2)
(193)
2,012
(111)
284
27
46
(371)
(173)
1,714
(600)
123
—
—
(63)
(155)
1,019
39
(11)
1
—
—
—
(5)
24
3
4
—
—
—
(4)
27
(4)
—
—
—
—
(4)
19
2,640
(43)
16
232
—
—
(158)
2,687
(273)
25
101
—
—
(154)
2,386
64
64
17
—
—
(201)
2,330
4,634
(100)
268
245
34
(2)
(356)
4,723
(381)
313
128
46
(371)
(331)
4,127
(540)
187
17
—
(63)
(360)
3,368
1,454
1,495
1,128
36
23
26
1,816
1,684
1,915
3,306
3,202
3,069
813
19
1,872
2,704
501
517
586
206
3
1
1
—
824
1,003
471
458
1,328
1,521
1,058
664
December 31, 2012
December 31, 2013
December 31, 2014
December 31, 2012
December 31, 2013
December 31, 2014
December 31, 2015 (d)
(a)
(b)
(c)
(d)
Over half of proved reserve amounts relate to PSCs and other similar economic arrangements.
Approximately 7 percent of the proved developed reserves at December 31, 2015 are nonproducing, primarily associated with Oman.
Total Reserves
LQPLOOLRQVRI%2(00%2(D
United
States
Latin
America
Middle East/
North Africa
Total (b)
Improved recovery
Production
Improved recovery
Production
Revisions of previous estimates (c)
Improved recovery
Production
1,551
10
188
6
37
(5)
(117)
1,670
(67)
310
22
43
(81)
(116)
1,781
(348)
113
—
—
(156)
(119)
1,271
102
(7)
8
—
—
—
(11)
92
6
9
—
—
—
(11)
96
(10)
8
—
—
—
(14)
80
929
4
63
74
—
—
(94)
976
3
35
19
—
—
(91)
942
43
23
5
—
(51)
(113)
849
2,582
7
259
80
37
(5)
(222)
2,738
(58)
354
41
43
(81)
(218)
2,819
(315)
144
5
—
(207)
(246)
2,200
1,169
1,222
1,154
950
88
80
90
80
651
613
744
702
1,908
1,915
1,988
1,732
382
448
627
321
14
12
6
—
278
363
198
147
674
823
831
468
December 31, 2012
December 31, 2013
December 31, 2014
December 31, 2015 (d)
December 31, 2012
December 31, 2013
December 31, 2014
December 31, 2015 (e)
(a)
(b)
(c)
(d)
(e)
Natural gas volumes have been converted to barrels of oil equivalent (BOE) based on energy content of six thousand cubic feet (Mcf) of gas to one barrel of oil.
Barrels of oil equivalence does not necessarily result in price equivalence. The price of natural gas on a barrel of oil equivalent basis is currently substantially lower
than the corresponding price for oil and has been similarly lower for a number of years. For example, in 2015, the average prices of West Texas Intermediate (WTI)
oil and New York Mercantile Exchange (NYMEX) natural gas were $48.80 per barrel and $2.75 per Mcf, respectively, resulting in an oil to gas ratio of 18 to 1.
Includes proved reserves related to PSCs and other similar economic arrangements of 0.5 billion BOE, 0.7 billion BOE, 0.8 billion BOE and 0.8 billion BOE, at
December 31, 2015, 2014, 2013, and 2012, respectively.
,
&$3,7$/,=('&2676
&DSLWDOL]HGFRVWVUHODWLQJWRRLODQGJDVSURGXFLQJDFWLYLWLHVDQGUHODWHGDFFXPXODWHG''$ZHUHDVIROORZV
United
States
in millions
Latin
America
Middle East/
North Africa
Total
December 31, 2015
Proved properties
Unproved properties
Total capitalized costs (a)
Proved properties depreciation, depletion and amortization
Unproved properties valuation
Total Accumulated depreciation, depletion and amortization
Net capitalized costs
$
$
30,200
1,376
31,576
(12,544)
(1,204)
(13,748)
17,828
$
33,186
2,389
35,575
(13,943)
(1,301)
(15,244)
20,331
$
29,520
2,509
32,029
(9,782)
22,247
$
$
2,955
27
2,982
(2,119)
(27)
(2,146)
836
$
2,788
27
2,815
(1,365)
(27)
(1,392)
1,423
$
2,485
27
2,512
(1,175)
1,337
$
$
19,290
1,077
20,367
(15,718)
(961)
(16,679)
3,688
$
19,545
1,026
20,571
(12,625)
—
(12,625)
7,946
$
18,090
190
18,280
(10,261)
8,019
$
$
52,445
2,480
54,925
(30,381)
(2,192)
(32,573)
22,352
December 31, 2014
Proved properties
Unproved properties
Proved properties depreciation, depletion and amortization
Unproved properties valuation
Total Accumulated depreciation, depletion and amortization
$
$
$
$
$
55,519
3,442
58,961
(27,933)
(1,328)
(29,261)
29,700
December 31, 2013
Proved properties
Unproved properties
Accumulated depreciation, depletion and amortization
(a)
$
$
$
$
$
50,095
2,726
52,821
(21,218)
31,603
Includes acquisition costs, development costs, capitalized interest and asset retirement obligations.
&2676,1&855('
&RVWVLQFXUUHGLQRLODQGJDVSURSHUW\DFTXLVLWLRQH[SORUDWLRQDQGGHYHORSPHQWDFWLYLWLHVZKHWKHUFDSLWDOL]HGRUH[SHQVHGZHUH
DVIROORZV
United
States
in millions
Latin
America
Middle East/
North Africa
Total
FOR THE YEAR ENDED DECEMBER 31, 2015
Property acquisition costs
Proved properties
Unproved properties
Exploration costs
Development costs
Costs incurred
$
37
25
74
2,880
3,016
$
$
$
—
—
2
170
172
$
$
47
—
66
1,461
1,574
$
$
84
25
142
4,511
4,762
Proved properties
Unproved properties
Exploration costs
Development costs
Costs incurred
$
$
771
842
379
3,665
5,657
$
343
151
293
2,659
3,446
$
$
—
—
4
305
309
$
$
—
—
180
2,138
2,318
$
—
—
79
2,117
2,196
$
$
771
842
563
6,108
8,284
Proved properties
Unproved properties
Exploration costs
Development costs
Costs incurred
$
$
$
—
—
11
329
340
$
$
$
343
151
383
5,105
5,982
5(68/762)23(5$7,216
2FFLGHQWDO¶VRLODQGJDVSURGXFLQJDFWLYLWLHVIRUFRQWLQXLQJRSHUDWLRQVZKLFKH[FOXGHLWHPVVXFKDVDVVHWGLVSRVLWLRQVFRUSRUDWH
RYHUKHDGLQWHUHVWDQGUR\DOWLHVZHUHDVIROORZV
United
States
in millions
Latin
America
Middle East/
North Africa
Total
Revenues (a)
Production costs (b)
Other operating expenses
Exploration expenses
Pretax income (loss) before impairments and related
items
Pretax income (loss)
Income tax expense (c)
Results of operations
$
3,809
1,571
511
2,109
307
18
(707)
3,447
(4,154)
(1,606)
(2,548)
$
$
$
589
160
29
196
16
2
186
559
(373)
(61)
(312)
$
$
3,906
1,113
238
1,581
—
16
958
4,491
(3,533)
787
(4,320)
$
$
8,304
2,844
778
3,886
323
36
437
8,497
(8,060)
(880)
(7,180)
Revenues (a)
Pretax income before impairments and related items
$
$
6,773
1,683
588
2,114
519
70
1,799
4,766
(2,967)
(1,182)
(1,785)
$
7,028
1,457
582
1,890
529
68
2,502
607
1,895
591
1,304
$
$
977
185
(2)
161
15
4
614
57
557
223
334
$
1,075
158
21
107
21
6
762
—
762
256
506
$
$
6,160
1,076
266
1,426
—
76
3,316
1,009
2,307
1,730
577
$
6,949
1,172
278
1,679
—
66
3,754
—
3,754
1,805
1,949
$
$
13,910
2,944
852
3,701
534
150
5,729
5,832
(103)
771
(874)
Revenues (a)
Pretax income
(a)
(b)
(c)
$
$
$
$
$
15,052
2,787
881
3,676
550
140
7,018
607
6,411
2,652
3,759
Revenues are net of royalty payments.
Production costs are the costs incurred in lifting the oil and gas to the surface and include gathering, primary processing, field storage and insurance on proved
properties, but do not include DD&A, royalties, income taxes, interest, general and administrative and other expenses.
United States federal income taxes reflect certain expenses related to oil and gas activities allocated for United States income tax purposes only, including allocated
interest and corporate overhead.
5(68/763(581,72)352'8&7,21)25&217,18,1*23(5$7,216
United
States
%2(D
Latin
America
Middle East/
North Africa
Total
Revenues (b)
Production costs
Pretax income (loss) before impairments and related
items
$
31.84
13.13
4.27
17.63
2.57
0.15
(5.91)
28.81
(34.72)
(13.42)
(21.30)
$
$
$
43.83
11.93
2.18
14.54
1.19
0.15
13.84
41.60
(27.76)
(4.54)
(23.22)
$
$
34.64
9.87
2.11
14.02
—
0.14
8.50
39.82
(31.32)
6.98
(38.30)
$
$
33.78
11.57
3.15
15.81
1.32
0.15
1.78
34.56
(32.78)
(3.58)
(29.20)
Revenues (b)
Production costs
$
$
58.50
14.54
5.08
18.26
4.48
0.60
15.54
41.17
(25.63)
(10.21)
(15.42)
$
60.17
12.47
4.98
16.18
4.53
0.58
21.43
5.20
16.23
5.06
11.17
$
$
85.81
16.25
(0.18)
14.14
1.32
0.35
53.93
5.01
48.92
19.59
29.33
$
100.46
14.76
1.96
10.00
1.96
0.56
71.22
—
71.22
23.92
47.30
$
$
67.74
11.83
2.93
15.68
—
0.84
36.46
11.10
25.36
19.02
6.34
$
73.68
12.43
2.95
17.80
—
0.70
39.80
—
39.80
19.14
20.66
$
$
63.78
13.50
3.91
16.97
2.45
0.69
26.26
26.74
(0.48)
3.54
(4.02)
Revenues (b)
Production costs
Pretax income
(a)
(b)
(c)
$
$
$
$
$
67.86
12.56
3.97
16.57
2.48
0.63
31.65
2.74
28.91
11.96
16.95
Natural gas volumes have been converted to BOE based on energy content of six thousand cubic feet of gas to one barrel of oil. Barrels of oil equivalence does
not necessarily result in price equivalence. The price of natural gas on a barrel of oil equivalent basis is currently substantially lower than the corresponding price
for oil and has been similarly lower for a number of years. For example, in 2015, the average prices of WTI oil and NYMEX natural gas were $48.80 per barrel and
$2.75 per Mcf, respectively, resulting in an oil to gas ratio of 18 to 1.
Revenues are net of royalty payments.
United States federal income taxes reflect certain expenses related to oil and gas activities allocated for United States income tax purposes only, including allocated
interest and corporate overhead.
67$1'$5',=('0($685(,1&/8',1*<($572<($5&+$1*(67+(5(,12)',6&2817(')8785(1(7
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VSURYHGRLODQGJDV
UHVHUYHVWKHXQZHLJKWHGDULWKPHWLFDYHUDJHRIWKHILUVWGD\RIWKHPRQWKSULFHIRUHDFKPRQWKZLWKLQWKH\HDUVHQGHG'HFHPEHU
DQGUHVSHFWLYHO\XQOHVVSULFHVZHUHGHILQHGE\FRQWUDFWXDODUUDQJHPHQWVDQGH[FOXGHHVFDODWLRQVEDVHGXSRQ
IXWXUHFRQGLWLRQV7KHUHDOL]HGSULFHVXVHGWRFDOFXODWHIXWXUHFDVKIORZVYDU\E\SURGXFLQJDUHDDQGPDUNHWFRQGLWLRQV)XWXUH
RSHUDWLQJ DQG FDSLWDO FRVWV ZHUH IRUHFDVW XVLQJ WKH FXUUHQW FRVW HQYLURQPHQW DSSOLHG WR H[SHFWDWLRQV RI IXWXUH RSHUDWLQJ DQG
GHYHORSPHQWDFWLYLWLHVWRGHYHORSDQGSURGXFHSURYHGUHVHUYHVDW\HDUHQG)XWXUHLQFRPHWD[H[SHQVHVZHUHFRPSXWHGE\DSSO\LQJ
JHQHUDOO\\HDUHQGVWDWXWRU\WD[UDWHVDGMXVWHGIRUSHUPDQHQWGLIIHUHQFHVWD[FUHGLWVDOORZDQFHVDQGIRUHLJQLQFRPHUHSDWULDWLRQ
FRQVLGHUDWLRQVWRWKHHVWLPDWHGQHWIXWXUHSUHWD[FDVKIORZV7KHGLVFRXQWZDVFRPSXWHGE\DSSOLFDWLRQRIDSHUFHQWGLVFRXQW
IDFWRU7KHFDOFXODWLRQVDVVXPHGWKHFRQWLQXDWLRQRIH[LVWLQJHFRQRPLFRSHUDWLQJDQGFRQWUDFWXDOFRQGLWLRQVDW'HFHPEHU
DQG6XFKDVVXPSWLRQVZKLFKDUHUHTXLUHGE\UHJXODWLRQKDYHQRWDOZD\VSURYHQDFFXUDWHLQWKHSDVW2WKHUYDOLG
DVVXPSWLRQVZRXOGJLYHULVHWRVXEVWDQWLDOO\GLIIHUHQWUHVXOWV
Standardized Measure of Discounted Future Net Cash Flows
in millions
United
States
Latin
America
Middle East/
North Africa
Total
AT DECEMBER 31, 2015
Future cash inflows
Future costs
Production costs and other operating expenses
Development costs (a)
Future income tax expense
Future net cash flows
Ten percent discount factor
Standardized measure of discounted future net cash flows
$
47,290
$
3,416
$
22,994
$
73,700
$
(25,386)
(7,245)
(759)
13,900
(7,446)
6,454
$
(1,852)
(178)
(392)
994
(293)
701
$
(9,041)
(2,672)
(4,045)
7,236
(2,996)
4,240
$
(36,279)
(10,095)
(5,196)
22,130
(10,735)
11,395
$
122,377
$
8,325
$
48,684
$
179,386
$
(48,436)
(16,618)
(15,939)
41,384
(23,722)
17,662
$
(3,422)
(397)
(1,322)
3,184
(1,219)
1,965
$
(13,020)
(7,245)
(11,211)
17,208
(6,686)
10,522
$
(64,878)
(24,260)
(28,472)
61,776
(31,627)
30,149
$
114,081
$
9,076
$
50,517
$
173,674
$
(43,569)
(12,038)
(16,689)
41,785
(24,080)
17,705
$
(3,375)
(477)
(1,571)
3,653
(1,557)
2,096
$
(13,043)
(7,084)
(13,182)
17,208
(6,597)
10,611
$
(59,987)
(19,599)
(31,442)
62,646
(32,234)
30,412
Future cash inflows
Future costs
Future cash inflows
Future costs
(a)
Includes asset retirement costs.
Changes in the Standardized Measure of Discounted Future
Net Cash Flows From Proved Reserve Quantities
in millions
Beginning of year
Sales and transfers of oil and gas produced, net of production costs and other operating
expenses
Net change in prices received per barrel, net of production costs and other operating expenses
Extensions, discoveries and improved recovery, net of future production and development costs
Change in estimated future development costs
Revisions of quantity estimates
Previously estimated development costs incurred during the period
Accretion of discount
Net change in income taxes
Purchases and sales of reserves in place, net
Changes in production rates and other
Net change
End of year
$
2015
30,149
$
(4,952)
(36,081)
854
3,091
(1,782)
3,327
3,220
13,046
(2,334)
2,857
(18,754)
$
11,395
2014
30,412
$
(11,016)
(3,641)
4,754
(3,375)
190
4,676
3,456
3,673
45
975
(263)
$
30,149
2013
29,683
(12,324)
2,000
4,792
(3,546)
(475)
2,926
3,325
2,183
518
1,330
729
$
30,412
Average Sales Prices
7KHIROORZLQJWDEOHVHWVIRUWKIRUHDFKRIWKHWKUHH\HDUVLQWKHSHULRGHQGHG'HFHPEHU2FFLGHQWDO¶VDSSUR[LPDWH
DYHUDJHVDOHVSULFHVLQFRQWLQXLQJRSHUDWLRQV
United
States
2015
Oil
NGLs
Gas
2014
Oil
NGLs
Gas
2013
Oil
NGLs
Gas
Latin
America
Middle East/
North Africa
Total
—
—
—
Average sales price ($/bbl)
Average sales price ($/mcf)
$
$
$
45.04
15.35
2.15
$
$
$
44.49
—
5.20
$
$
$
49.65
17.88
0.91
$
$
$
47.10
15.96
1.49
—
—
—
$
$
$
84.73
37.79
3.97
$
$
$
88.00
—
8.94
$
$
$
96.34
30.98
0.77
$
$
$
90.13
37.01
2.55
—
—
—
$
$
$
92.48
38.65
3.22
$
$
$
103.21
—
11.17
$
$
$
104.48
33.00
0.76
$
$
$
98.81
38.00
2.23
Net Productive and Dry — Exploratory and Development Wells Completed
7KHIROORZLQJWDEOHVHWVIRUWKIRUHDFKRIWKHWKUHH\HDUVLQWKHSHULRGHQGHG'HFHPEHU2FFLGHQWDO¶VQHWSURGXFWLYH
DQGGU\±H[SORUDWRU\DQGGHYHORSPHQWZHOOVFRPSOHWHG
United
States
2015
Oil
—
Gas
—
Dry
—
2014
Oil
—
Gas
—
Dry
—
2013
Oil
—
Gas
—
Dry
—
Latin
America
Middle East/
North Africa
Total
Exploratory
Development
Exploratory
Development
Exploratory
Development
17
387
—
4
—
—
—
24
—
1
—
1
1
217
2
12
4
1
18
628
2
17
4
2
Exploratory
Development
Exploratory
Development
Exploratory
Development
25
419
2
33
—
—
—
52
—
1
1
1
5
253
2
13
3
—
30
724
4
47
4
1
Exploratory
Development
Exploratory
Development
Exploratory
Development
25
558
1
51
5
27
1
64
—
3
1
2
4
235
1
10
3
1
30
857
2
64
9
30
Productive Oil and Gas Wells
7KHIROORZLQJWDEOHVHWVIRUWKDVRI'HFHPEHU2FFLGHQWDO¶VSURGXFWLYHRLODQGJDVZHOOVERWKSURGXFLQJDQGFDSDEOH
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Wells at
December 31, 2015 (a)
Oil
—
Gross (b)
Gas
—
Net (c)
Gross (b)
Net (c)
(a)
(b)
(c)
United
States
16,492
(820)
14,300
4,144
(758)
(202)
748
34
3,681
(188)
31
The numbers in parentheses indicate the number of wells with multiple completions.
The total number of wells in which interests are owned.
The sum of fractional interests.
Latin
America
1,496
(1)
Middle East/
North Africa
4,192
(867)
22,180
(1,688)
(1)
—
2,215
178
(417)
(1)
17,263
4,356
(1,176)
(203)
—
92
(1)
3,804
(189)
Total
Participation in Exploratory and Development Wells Being Drilled
7KHIROORZLQJWDEOHVHWVIRUWKDVRI'HFHPEHU2FFLGHQWDO¶VSDUWLFLSDWLRQLQH[SORUDWRU\DQGGHYHORSPHQWZHOOVEHLQJ
GULOOHG
Wells at
December 31, 2015
United
States
Exploratory and development wells
—
Gross
—
Net
Latin
America
57
56
Middle East/
North Africa
4
3
Total
42
23
103
82
$W'HFHPEHU2FFLGHQWDOZDVSDUWLFLSDWLQJLQSUHVVXUHPDLQWHQDQFHSURMHFWVPRVWO\ZDWHUIORRGVLQWKH8QLWHG
6WDWHVLQ/DWLQ$PHULFDDQGLQWKH0LGGOH(DVW1RUWK$IULFD
Oil and Gas Acreage
7KHIROORZLQJWDEOHVHWVIRUWKDVRI'HFHPEHU2FFLGHQWDO¶VKROGLQJVRIGHYHORSHGDQGXQGHYHORSHGRLODQGJDVDFUHDJH
Thousands of acres at
December 31, 2015
Developed (a)
United
States
Latin
America
Middle East/
North Africa
Total
—
Gross (b)
6,668
130
1,195
7,993
—
Net
3,017
88
587
3,692
1,933
379
7,601
9,913
573
256
5,135
5,964
(c)
Undeveloped (d)
(a)
(b)
(c)
(d)
—
Gross (b)
—
Net
(c)
Acres spaced or assigned to productive wells.
Total acres in which interests are held.
Sum of the fractional interests owned based on working interests, or interests under PSCs and other economic arrangements.
Acres on which wells have not been drilled or completed to a point that would permit the production of commercial quantities of oil and gas, regardless of whether
the acreage contains proved reserves.
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Oil, NGLs and Natural Gas Production and Sales Volumes Per Day
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Production per Day (MBOE)
United States
Permian Resources
Permian EOR
TOTAL
Latin America
Al Hosn
Dolphin
Oman
Qatar
Other
TOTAL
2015
Total Production Ongoing operations
(See footnotes following the Sales Volumes per Day table)
2014
2013
110
145
57
312
37
75
147
70
292
29
65
147
72
284
31
35
41
89
66
72
303
—
38
76
69
67
250
—
37
74
68
79
258
652
—
16
668
571
6
20
597
573
18
18
609
Production per Day by Products
United States
Oil (MBBL)
Permian Resources
Permian EOR
TOTAL
NGLs (MBBL)
Permian Resources
Permian EOR
TOTAL
Natural gas (MMCF)
Permian Resources
Permian EOR
TOTAL
Latin America
Oil (MBBL) - Colombia
Natural gas (MMCF) - Bolivia
Oil (MBBL)
Al Hosn
Dolphin
Oman
Qatar
Other
TOTAL
NGLs (MBBL)
Al Hosn
Dolphin
TOTAL
Natural gas (MMCF)
Al Hosn
Dolphin
Oman
Other
TOTAL
2015
Total Production Ongoing operations
(See footnotes following the Sales Volumes per Day table)
2014
2013
71
110
6
187
43
111
8
162
35
111
7
153
16
29
10
55
12
30
12
54
10
29
15
54
137
37
246
420
120
38
296
454
117
40
311
468
35
10
27
11
29
12
7
7
82
66
32
194
—
7
69
69
28
173
—
6
66
68
39
179
10
8
18
—
7
7
—
7
7
109
158
44
237
548
—
143
43
236
422
—
142
51
241
434
652
—
16
668
571
6
20
597
573
18
18
609
Sales Volumes per Day by Products
United States
Oil (MBBL)
NGLs (MBBL)
Natural gas (MMCF)
Latin America
Oil (MBBL) - Colombia
Natural gas (MMCF) - Bolivia
Oil (MBBL)
Al Hosn
Dolphin
Oman
Qatar
Other
TOTAL
NGLs (MBBL)
Al Hosn
Dolphin
TOTAL
Natural gas (MMCF)
2015
Total Sales Ongoing Operations
Total Sales Volumes (MBOE) (a)
(a)
2014
2013
187
55
420
162
54
454
153
54
468
35
10
29
11
27
12
7
8
82
67
36
200
—
7
69
69
27
172
—
6
68
67
38
179
10
8
18
548
—
7
7
422
—
7
7
434
658
—
16
674
572
6
20
598
572
18
18
608
Natural gas volumes have been converted to BOE based on energy content of six Mcf of gas to one barrel of oil. Barrels of oil equivalence does not necessarily
result in price equivalence The price of natural gas on a barrel of oil equivalent basis is currently substantially lower than the corresponding price for oil and has
been similarly lower for a number of years. For example, in 2015, the average prices of WTI oil and NYMEX natural gas were $48.80 per barrel and $2.75, respectively,
resulting in an oil to gas ratio of 18 to 1.
Schedule II – Valuation and Qualifying Accounts
DQG6XEVLGLDULHV
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Balance at
Beginning
of Period
Additions
Charged to
Charged to
Costs and
Other
Expenses
Accounts
Balance at
End of
Period
Deductions
(a)
2015
Allowance for doubtful accounts
$
19
$
9
$
(3) $
Environmental
Litigation, tax and other reserves
$
$
$
117
2
119
$
$
334
338
672
$
—
2
2
$
17
$
4
$
(2) $
Environmental
$
$
$
79
1
80
$
$
330
166
496
$
(7) $
190
183 $
$
16
$
1
$
—
$
Environmental
$
344
229
573
$
60
3
63
$
—
4
4
$
$
$
(5) $
20
(65) $
(249)
(314) $
386
93
479
(b)
2014
—
$
19
(68) $
(19)
(87) $
334
338
672
(b)
2013
$
$
$
$
Note: The amounts presented represent continuing operations.
(a)
(b)
Primarily represents payments.
Of these amounts, $98 million, $287 million and $101 million in 2015, 2014 and 2013, respectively, are classified as current.
—
$
17
(74) $
(70)
(144) $
330
166
496
(b)
ITEM 9
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
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ITEM 10 DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
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ITEM 14 PRINCIPAL ACCOUNTING FEES AND SERVICES
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Part IV
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Additional Information
Auditors
Annual Certifications
KPMG LLP
Occidental has filed the certifications of the chief
Houston, Texas
executive officer and chief financial officer required
by Section 302 of the Sarbanes-Oxley Act of 2002 as
Exhibits 31.1 and 31.2 to its 2015 Annual Report on
Transfer Agent and Registrar
Form 10-K filed with the Securities and Exchange
Commission. In addition, in 2015, Occidental submitted to
Wells Fargo Shareowner Services
P.O. Box 64874
St. Paul, MN 55164-0874
the NYSE a certificate of the chief executive officer stating
that he is not aware of any violation by the company of
the NYSE corporate governance listing standards.
Toll free – (877) OXY-8166
International callers – (651) 450-4064
www.shareowneronline.com
Current News and General Information
Information about Occidental, including news releases
Stock Exchange Listing
Occidental’s common stock is listed on the New York
and investor packages, is available at www.oxy.com.
www.Twitter.com/oxy_petroleum
Stock Exchange (NYSE). The symbol is OXY.
www.youtube.com/user/OxyUTube
www.linkedin.com/company/oxy
Dividend Reinvestment Plan
Occidental stockholders owning at least 25 shares of
common or preferred stock registered in their name
are eligible to purchase additional shares of common
This Annual Report is printed on Forest Stewardship
stock under the Dividend Reinvestment Plan by investing
Council®-certified paper that contains wood from
dividends on the greater of 25 shares or 10 percent of
well-managed forests, controlled sources and
their share balance of common or preferred stock and
recycled wood or fiber.
making optional cash investments of up to $10,000 per
month. Information may be obtained from: Wells Fargo
Shareowner Services at www.shareowneronline.com.
OCCIDENTAL PETROLEUM
CORPORATION
Chemicals
Corporate Headquarters
Occidental Chemical Corporation
5 Greenway Plaza, Suite 110
5005 LBJ Freeway
Houston, Texas 77046-0521
Dallas, Texas 75244-6152
(713) 215-7000
(972) 404-3800
Investor Relations
1230 Avenue of the Americas
8th Floor, Suite 800
Energy Marketing
New York, New York 10020-1508
Occidental Energy Marketing, Inc.
(212) 603-8111
5 Greenway Plaza, Suite 110
[email protected]
Houston, Texas 77046-0521
(713) 215-7000
Government Relations
1701 Pennsylvania Avenue, NW
Suite 800
Washington, D.C. 20006-4614
(202) 857-3000