Occidental Petroleum 2001 Annual Report Download - page 34

transactions with Apache Corporation (Apache) involving Occidental's interests
in the Continental Shelf of the GOM. Occidental entered into a transaction to
deliver, over four years, substantially all of its share of future gas
production from these GOM interests to Apache for approximately $280 million.
Occidental also agreed to sell an interest in the subsidiary that holds the GOM
assets for approximately $62 million, with an option for Apache to purchase
additional interests for $44 million over the next four years. As a result of
these transactions, and the consequent elimination of a portion of Occidental's
responsibility for abandonment liabilities, Occidental recorded an after-tax
gain of $39 million.
SALE OF PERU PROPERTIES
On May 8, 2000, Occidental completed an agreement to sell its producing
properties in Peru to Pluspetrol. In connection with this transaction,
Occidental recorded an after-tax charge of approximately $29 million in December
1999 to write-down the properties to their fair values.
THUMS ACQUISITION
On April 24, 2000, Occidental completed the acquisition of THUMS, an oil
producing entity, for approximately $68 million. The acquisition added
approximately 95 million barrels of net oil reserves and approximately 25,000
barrels per day of net oil production to Occidental's growing California
operations.
ALTURA ACQUISITION
On April 19, 2000, Occidental completed its acquisition of all of the
common interest in Altura, the largest oil producer in Texas. Occidental,
through its subsidiaries, paid approximately $1.2 billion to the sellers,
affiliates of BP and Shell, to acquire the common limited partnership interest
and control of the general partner which manages, operates and controls 100
percent of the Altura assets. The partnership borrowed approximately $2.4
billion, which had recourse only to the Altura assets. The partnership also
loaned approximately $2.0 billion to affiliates of the sellers, evidenced by two
notes, which provide credit support to the partnership. The sellers retained a
preferred limited partnership interest of approximately $2.0 billion and are
entitled to certain distributions from the partnership. The acquisition is
valued at approximately $3.6 billion. The $2.4 billion loan had been completely
paid by the end of 2001. Proved reserves at Altura were 882 million barrels of
oil equivalent at December 31, 2001.
SALE OF CANADIANOXY INVESTMENT
On April 18, 2000, Occidental completed the sale of its 29.2-percent stake
in CanadianOxy for gross proceeds of approximately $1.2 billion Canadian. Of
Occidental's 40.2 million shares of CanadianOxy, 20.2 million were sold to the
Ontario Teachers Pension Plan Board and 20 million to CanadianOxy. In addition,
Occidental and CanadianOxy exchanged their respective 15-percent interests in
joint businesses of approximately equal value, resulting in Occidental owning
100 percent of an oil and gas operation in Ecuador and CanadianOxy owning 100
percent of sodium chlorate operations in Canada and Louisiana. After-tax
proceeds from the CanadianOxy disposition together with tax benefits from the
disposition of the Peru producing properties totaled approximately $700 million.
1999
ASSET SWAP WITH EOG
In December 1999, Occidental and EOG Resources, Inc. (EOG) exchanged
certain oil and gas assets. Occidental received producing properties and
exploration acreage in its expanding California asset base, as well as producing
properties in the western Gulf of Mexico near existing operations, in exchange
for oil and gas production and reserves in east Texas. The exchange increased
Occidental's exploration acreage in California from approximately 89,000 acres
to approximately 850,000 acres.
Occidental also farmed out Oklahoma panhandle properties to EOG, retaining
a carried interest, and expects to benefit from EOG's drilling program.
Occidental was not planning on drilling this acreage and, under this program,
EOG will fund all the capital and Occidental will share in the results.
INDSPEC ACQUISITION
In the third quarter of 1999, Occidental acquired the remaining ownership
of INDSPEC through the issuance of approximately 3.2 million shares of
Occidental common stock at an estimated value of approximately $68 million and
the assumption of approximately $80 million of bank debt. As a result of the