Occidental Petroleum expects temporary impact from winter storms

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In this news, we discuss the Occidental Petroleum expects temporary impact from winter storms

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(Reuters) – The impact of severe winter storms in Texas last week, which shut down oil production at America’s main oil field, was temporary and is not expected to affect oil production in 2021, executives said Tuesday of Occidental Petroleum Corp.

The impact of 25,000 barrels per day on the Western Permian Basin will be short-lived, Robert Peterson, chief financial officer of Occidental, said on a call with analysts.

The US producer on Monday after markets closed posted a larger-than-expected loss in the fourth quarter despite rising oil and gas prices as asset sales weighed on results. Occidental slashed jobs and production after the coronavirus pandemic hammered global energy demand, pressuring an energy company that had gone into debt in 2019 to acquire an oil rival.

Occidental is not forecasting global production growth “at least this year,” chief executive Vicki Hollub said, adding that the company would not increase capital spending even if oil prices improved further.

Its fourth-quarter loss extended to $ 731 million, compared to a loss of $ 269 million in the same quarter a year ago.

Adjusted loss per share of 78 cents was higher than analysts’ expectations for a loss of 59 cents, according to IBES data on Refinitiv. For the same quarter of last year, the company reported a loss per share of 30 cents.

Financial results were negatively affected by one-time items, including a mark-to-market charge of $ 187 million mid-term and a charge of $ 70 million for sales tax, said analyst Daniel Boyd of Mizuho Securities.

Occidental has 11 drilling rigs working in the Permian Basin, up from 22 a year ago, and two are actively drilling in the Rockies, Hollub said.

He expects to have between $ 2 billion and $ 3 billion in additional asset sales by the middle of the year, Hollub said. The company sold certain assets to repay debt resulting from the acquisition of Anadarko Petroleum in 2019.

Reporting by Jennifer Hiller; edited by Jonathan Oatis and Marguerita Choy

Original © Thomson Reuters

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