Occidental Petroleum 2001 Annual Report Download - page 15

Download and view the complete annual report

Please find page 15 of the 2001 Occidental Petroleum annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 116

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116

DEBT STRUCTURE
Occidental's total debt comprises three components, as shown in the table
below (amounts in millions):
Occidental Other Altura Non-
Public Recourse Recourse Total
Date Debt Debt Debt Debt(a)
================ =========== =========== =========== ===========
12/31/97 $ 4,965 $ 1,361 $ -- $ 6,326
12/31/98 $ 5,402 $ 776 $ -- $ 6,178
12/31/99 $ 4,401 $ 1,047 $ -- $ 5,448
April 2000(b) $ 5,766 $ 1,009 $ 2,400 $ 9,175
12/31/00 $ 3,544 $ 912 $ 1,900 $ 6,356
12/31/01 $ 4,119 $ 771 $ -- $ 4,890
---------------- ----------- ----------- ----------- -----------
(a) Includes Trust Preferred Securities, natural gas delivery commitment,
preferred stock and capital lease obligations.
(b) Reflects, on a pro-forma basis, the effect of $1.2 billion in debt from the
Altura acquisition on Occidental's debt as of April 2000.
13
Occidental took full advantage of its increased production profile and high
oil and gas prices over an eighteen-month period in 2000 and 2001 to reduce
total debt. The Altura purchase increased pro-forma debt to nearly $9.2 billion
in April 2000. By the end of 2001, total debt had been lowered to $4.9 billion,
$1.4 billion below the year-end total in 1997. Occidental's public debt at
year-end 2001 is more than $800 million below the year-end 1997 level and more
than $275 million below year-end 1999.
Occidental's other recourse debt, which includes preferred stock and Trust
Preferred Securities in the above table, decreased from $1.4 billion in 1997 to
$771 million in 2001.
Total Debt/Capitalization Ratio (%)
Date Total Debt/Capitalization Ratio
=============================== ===============================
12/31/97 67%
12/31/98 66%
12/31/99 61%
April 2000(a) 71%
12/31/00 57%
12/31/01 46%
------------------------------- -------------------------------
(a) Reflects, on a pro-forma basis, the effect of $1.2 billion in debt from the
Altura acquisition on Occidental's public debt as of April 2000.
Occidental's year-end 2001 total debt-to-capitalization ratio has declined
to approximately 46 percent from the 67-percent level that existed at the end of
1997. The debt-to-capitalization ratio is computed by dividing total debt by
total capitalization, excluding minority interest.
BUSINESS REVIEW - OIL AND GAS
Occidental's overall performance during the past three years reflected the
successful implementation of its oil and gas business strategy, beginning with
the 1998 $3.5 billion acquisition of the Elk Hills oil and gas field in
California. Elk Hills is one of the top ten oil and gas fields in the U.S. and
the largest source of gas in California. The Elk Hills acquisition was followed
in April 2000 by the purchases of Altura Energy in Texas for $3.6 billion and
the much smaller THUMS property in Long Beach for $110 million.
At the end of 2001, these three assets made up 65 percent of Occidental's