Occidental posts US$8 billion loss, outlines oil production cuts

Occidental posts US$8 billion loss, outlines oil production cuts

Occidental Petroleum Corp on Monday posted its fourth straight quarterly loss as it recorded a US$6.6 billion impairment charge, largely to write down the value of its oil and gas properties following a crash in crude prices.

The logo for Occidental Petroleum is displayed on a screen on the floor at the NYSE in New York
FILE PHOTO: The logo for Occidental Petroleum is displayed on a screen on the floor at the New York Stock Exchange (NYSE) in New York, U.S., April 30, 2019. REUTERS/Brendan McDermid

REUTERS: Occidental Petroleum Corp on Monday posted a US$8.35 billion second-quarter loss on lower energy prices and write-downs as the U.S. oil producer has been trying to reduce debt amid a pandemic that has sapped fuel demand and prices. Occidental, which borrowed heavily to finance last year's US$38 billion purchase of rival Anadarko Petroleum, cut the value of its oil and gas properties by US$6.6 billion, joining BP, Chevron and Total in massive write-downs as the industry now expects energy prices to stay low for years.

Its oil and gas production will fall 13per cent this quarter over last, and another 5per cent in the fourth quarter, to 1.16 million barrels of oil and gas per day, the company said. In the Permian, where it became the largest operator through the Anadarko purchase, shale output will drop 37per cent this year, it said.

Shares fell nearly 6per cent in late trading after rising US$1.03 at US$16.48. The stock is down 61per cent so far this year.

The average price Occidental received for crude oil plummeted about 61per cent to US$23.17 per barrel in the second quarter as oil prices crashed. It has cut jobs, slashed its dividend, reduced spending plans and sold assets to shore up its finances.

It expects to receive US$2 billion or more in asset sales, according to the presentation.

Among the assets Occidental is trying to sell is a package of land and minerals in Wyoming and Colorado. The company has said that it hopes to close that sale in the fourth quarter.

Its net loss was US$8.35 billion, or US$9.12 per share, in the quarter, compared with earnings of US$635 million, or 84 cents per share, a year earlier.

Excluding one-time items, the company lost US$1.76 per share, compared with analysts' average estimates of US$1.68, according to Refinitiv IBES.

(Reporting by Jennifer Hiller in Houston and Arathy S Nair in Bengaluru; Editing by Sriraj Kalluvila, David Gregorio and Aurora Ellis)

Source: Reuters

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