Occidental warns of up to US$9 billion asset writedown on bleak oil price outlook

Occidental warns of up to US$9 billion asset writedown on bleak oil price outlook

Occidental Petroleum Corp said on Thursday it expects to take impairment charges of up to US$9 billion in the second quarter related to the value of its assets as the oil producer forecast crude price to remain lower for a long period of time.

FILE PHOTO: The logo of Occidental Petroleum is displayed on a screen on the floor at the NYSE in N
FILE PHOTO: The logo of 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/File Photo

REUTERS: Occidental Petroleum Corp said on Thursday it expects to take impairment charges of up to US$9 billion in the second quarter related to the value of its assets as the oil producer forecast crude price to remain lower for a long period of time.

The company separately said it would buy back up to US$1.5 billion worth of senior notes due in 2021 and 2022 as it tries to reduce its debt, which ballooned to US$40 billion after an ill-timed acquisition of Permian producer Anadarko last year.

Occidental said it expects preliminary oil and gas production from continuing operations for the second quarter to lean toward the high-end of range of 1.3 million-1.4 million barrels of oil equivalent per day (mboed).

The Anadarko purchase saddled Occidental with a huge debt and the oil-price crash has cut the value of assets Occidental picked up in the deal, dashing its hopes of selling some of them to pay down the debt.

Last month the beleaguered oil producer had said it was looking at a series of options to shore up its impaired balance sheet, including raising cash or refinancing debt.

(Reporting by Shradha Singh in Bengaluru; Editing by Arun Koyyur)

Source: Reuters

Bookmark