SHARE PRICE SUPPORTED BY STRONG EARNINGS AND HIGHER OIL PRICES

OCCIDENTAL

PETROLEUM Investment Proposal

Occidental Petroleum is a Los Angeles-based upstream hydrocarbon exploration and integrated chemical corporation. “Oxy,” in shorthand, maintains operations around the world with more than 80 years of hydrocarbon exploration experience.

In addition to upstream ex-ploration and development, Oxy diversifies its business operations by providing midstream transportation and logistics solutions along with its wholly-owned sub-sidiary OxyChem, which manufactures vital chemi-cals for use in the plastics and pharmaceutical indus-tries.

Risks and Rewards

Oxy has outperformed many of its upstream competitors over the past decade. It also seems to have an interesting correlation between its share price and the spot price of oil, specifically Texas Intermediate (WTI). WTI futures (and crude oil in general) is trading higher over the past year and are forecast to continue rising , definitely in the short-term.

10889 Wilshire Boulevard

Los Angeles, CA 90024

Phone: 310-208-8800

www.oxy.com

QUICK FACTS

Ticker NYSE: OXY

Latest Price (11/1/2011) $88.21

52 Week High $117.89

52 Week Low $66.36

Market Capitalization $79.46 Billion

Shares 812,770,000

P/E Ratio 12.78

Institution Owned 82%

Upside Price Target $120.00

Downside Sell Target $70.00

Occidental indexed stock price com-

pared to its main competitors, Exx-

onMobil (XOM), Chevron (CVX), Mara-

thon Oil (MRO), and Eni S.p.A. (E) over

the past decade (2001-2011)

Information Sources:

Market data and charts provided by Google Finance (finance.google.com)

Company information and data provided by Occidental Petroleum (www.oxy.com)

WTI Crude Price data provided by the Energy Information Administration (www.eia.org)

Logic Background from: (http://www.cs.ucsb.edu/~pconrad/cs40/lessons/logic/modusPonensModusTollens.html)

The crude oil market, however, is somewhat difficult to predict at the moment due to a mix of contradicting factors. Macroeconomic uncertainty continues to rattle market confidence which could depress crude oil demand. However, an investment in Oxy should hedge against this potential market risk as 2011 has witnessed an upstream boom across the world, particularly domestically with tight oil discoveries in North Dakota’s Bakken Shale, of which Oxy has a substantive stake. Following a string of ma-jor hydrocarbon discoveries, the demand for drilling and exploration expertise re-mains strong. Therefore, for the next month Oxy’s risk of a falling share price seems slim as it shares a (loose but noteworthy) correlation with WTI crude spot prices in addition to recently released strong third quarter earnings; 48% higher than 3Q 2010. Finally, Oxy is now producing 436,000 barrels of oil equivalent of petroleum and natu-ral gas per day, an all-time record domestic rate of production. As far as I can tell, there are no obvious indications that production or earnings in 4Q 2011 should decrease from the third quarter.

Modus Ponens

As previously mentioned, the indexed price correlation between WTI crude spot prices (represented by the gray line) and Oxy share prices appears stronger than any other major oil company or competitor. The significance of this may not play much of a role, it may simply be personal speculation but as the above chart demonstrates, since the worst of the 2008 Financial Crisis, the two prices have loosely formed a ‘modus ponens’ relationship, in which one could postulate:

If the price of oil is high, then Oxy share prices will rise; the price of oil is high. Therefore, the share price of Oxy will increase.

Only time will tell if these logical assumption holds true. However, it represents an earnest attempt to provide a credible investment fore-cast in an extremely volatile market plagued by chronic uncertainty.

Solid Business Model

Under normal market conditions (pre-2008) when tasked to pro-vide the maximum possible returns in a very short period of time (speculative) investing, a broker may not usually select a stable long-term institution grade equity like Oxy. However, I believe Oxy’s di-versified business plan along with its lucrative hydrocarbon stakes both domestically and internationally position it as an equity that will, at the very least, stay above water for the next thirty days. So much cannot be said for the rest of the market.

—Jacob F. Hill, November 1st, 2011

OCCIDENTAL

PETROLEUM

Financials (As of June 30th, 2011)

Current Assets $9,943 Billion

Current Liabilities $8,093 Billion

Balance Sheet Total $54,595 Billion

Daily Sales 717,000 barrels of oil

equivalent

52%

7%1%1%

2%

16%

16%

5%U.S.

Columbia

Bahrain

Iraq

Libya

Oman

Qatar

Yemen

2Q 2011 Crude Oil Production