Occidental Petroleum Announces Third Quarter Earnings of $1.159 Billion, Up 15% from Third Quarter 2005

Occidental Petroleum Corporation announced core earnings for the third quarter 2006 were $1.159 billion ($1.35 per diluted share), compared with $1.004 billion ($1.22 per diluted share) for the same period in 2005. See the attached schedule for a reconciliation of net income to core earnings.

Net income for the third quarter 2006 was $1.168 billion ($1.36 per diluted share), compared with $1.747 billion ($2.12 per diluted share) for the third quarter 2005.

In announcing the results, Dr. Ray R. Irani, chairman, president and chief executive officer, said, “Our continuing focus on expanding and strengthening operations in our core businesses was a key factor in the 15 percent increase in our core earnings compared to last year’s third quarter results. Our success in growing combined oil and gas production by 14 percent compared to the same period a year ago, along with sharply higher crude oil prices and a strong performance from our chemicals business, were key drivers in our financial performance for the quarter. Oil and gas production averaged 587,000 barrels of oil equivalent per day for the quarter and an all-time high for nine months of 596,000 equivalent barrels per day. Strong production growth and robust energy prices helped propel Oil and Gas segment earnings to an historic nine month high. In addition, our Chemical segment’s earnings were the highest for any nine month period in more than a decade.”

The third quarter 2005 core income of $1.004 billion excludes a $463 million after-tax gain resulting from the sale of an equity investment, a $335 million tax benefit due to the reversal of tax reserves no longer required and a $98 million after-tax charge from the write-off of certain chemical plants.

QUARTERLY RESULTS

Oil and Gas

Oil and gas segment earnings were $1.877 billion for the third quarter 2006, a 15 percent increase from the $1.638 billion segment earnings for the third quarter 2005. The improvement in the third quarter 2006 earnings reflected a $273 million increase from higher worldwide crude oil prices, a $141 million increase from higher production, partially offset by higher operating expenses, increased DD&A rates, and higher exploration expense.

The average price for West Texas Intermediate crude oil in the third quarter 2006 was $70.53 per barrel compared to $63.19 per barrel in the third quarter 2005. Occidental’s realized price for worldwide crude oil was $60.52 per barrel for the third quarter 2006, compared with $55.97 per barrel for the third quarter 2005. The average price for NYMEX gas in the third quarter 2006 was $6.33 per MMCF, compared with $7.09 per MMCF in the third quarter 2005. Domestic realized gas prices decreased from $6.33 per MMCF in the third quarter 2005 to $5.88 per MMCF for the third quarter 2006.

Production

For the third quarter, oil and gas daily production from continuing operations averaged 587,000 barrels of oil equivalent (BOE), a 71,000 BOE increase over the 516,000 equivalent barrels per day produced in the third quarter 2005.

Chemicals

Chemical third quarter 2006 core earnings were $247 million and third quarter 2005 core earnings were $167 million, after excluding charges for write-off of plants and hurricane related insurance charges. See the attached schedule for a reconciliation of segment earnings to core earnings. The improvement in the third quarter 2006 results was due to increased chlor-alkali volumes and higher margins in all chlorovinyls products. Chemical segment earnings were $247 million for the third quarter 2006, compared with $3 million for the third quarter 2005.

For further analysis of Occidental’s quarterly performance, please visit the web site www.oxy.com.