Occidental Petroleum 2001 Annual Report Download - page 82

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considerations) to the estimated net future pre-tax cash flows. The discount was
computed by application of a 10 percent discount factor. The calculations
assumed the continuation of existing economic, operating and contractual
conditions at each of December 31, 2001, 2000 and 1999. However, such arbitrary
assumptions have not necessarily proven to be the case in the past. Other
assumptions of equal validity would give rise to substantially different
results.
The year-end prices used to calculate future cash flows vary by producing
area and market conditions. For the 2001, 2000 and 1999 disclosures, the West
Texas Intermediate oil prices used were $19.84/bbl, $26.80/bbl and $25.60/bbl,
respectively. The NYMEX gas prices used for the 2001, 2000 and 1999 disclosures
were $2.57/MMBtu, $9.78/MMBtu and $2.32/MMBtu, respectively.
STANDARDIZED MEASURE OF DISCOUNTED FUTURE NET CASH FLOWS
In millions
United Latin Eastern Total
States America (a) Hemisphere Worldwide
============================================================ ========== ========== ========== ==========
AT DECEMBER 31, 2001
Future cash flows $ 28,146 $ 2,119 $ 6,619 $ 36,884
Future costs
Production costs and other operating expenses (14,404) (821) (2,250) (17,475)
Development costs(b) (2,282) (200) (611) (3,093)
---------- ---------- ---------- ----------
FUTURE NET CASH FLOWS BEFORE INCOME TAXES 11,460 1,098 3,758 16,316
Future income tax expense (2,224) (447) (458) (3,129)
---------- ---------- ---------- ----------
FUTURE NET CASH FLOWS 9,236 651 3,300 13,187
Ten percent discount factor (5,088) (188) (1,309) (6,585)
---------- ---------- ---------- ----------
STANDARDIZED MEASURE $ 4,148 $ 463 $ 1,991 $ 6,602
============================================================ ========== ========== ========== ==========
AT DECEMBER 31, 2000
Future cash flows $ 53,195 $ 2,744 $ 6,868 $ 62,807
Future costs
Production costs and other operating expenses (13,236) (785) (1,767) (15,788)
Development costs(b) (1,962) (47) (539) (2,548)
---------- ---------- ---------- ----------
FUTURE NET CASH FLOWS BEFORE INCOME TAXES 37,997 1,912 4,562 44,471
Future income tax expense (11,023) (896) (623) (12,542)
---------- ---------- ---------- ----------
FUTURE NET CASH FLOWS 26,974 1,016 3,939 31,929
Ten percent discount factor (14,608) (392) (1,585) (16,585)
---------- ---------- ---------- ----------
STANDARDIZED MEASURE $ 12,366 $ 624 $ 2,354 $ 15,344
============================================================ ========== ========== ========== ==========
AT DECEMBER 31, 1999
Future cash flows $ 14,604 $ 3,619 $ 7,329 $ 25,552
Future costs
Production costs and other operating expenses (3,162) (754) (1,879) (5,795)
Development costs(b) (1,166) (185) (716) (2,067)
---------- ---------- ---------- ----------
FUTURE NET CASH FLOWS BEFORE INCOME TAXES 10,276 2,680 4,734 17,690
Future income tax expense (2,306) (1,076) (345) (3,727)
---------- ---------- ---------- ----------
FUTURE NET CASH FLOWS 7,970 1,604 4,389 13,963
Ten percent discount factor (4,177) (624) (1,754) (6,555)
---------- ---------- ---------- ----------
STANDARDIZED MEASURE 3,793 980 2,635 7,408
Share of equity investees' standardized measure 104 312 344 760
---------- ---------- ---------- ----------
STANDARDIZED MEASURE INCLUDING SHARE OF EQUITY INVESTEES'
STANDARDIZED MEASURE $ 3,897 $ 1,292 $ 2,979 $ 8,168
============================================================ ========== ========== ========== ==========
(a) Includes amounts applicable to operating interests in which Occidental
receives an agreed-upon fee per barrel of crude oil produced in 1999.
(b) Includes dismantlement and abandonment costs.
72
CHANGES IN THE STANDARDIZED MEASURE OF DISCOUNTED FUTURE
NET CASH FLOWS FROM PROVED RESERVE QUANTITIES
In millions
For the years ended December 31, 2001 2000 1999
================================================================================= ======== ======== ========
BEGINNING OF YEAR $ 15,344 $ 7,408 $ 3,369
-------- -------- --------
Sales and transfers of oil and gas produced, net of production costs and
other operating expenses (3,433) (3,546) (1,838)
Net change in prices received per barrel, net of production costs and other
operating expenses (12,850) 6,219 7,712