Occidental Beats Estimates, Helped by Higher US Sales Volumes

Wedoany.com Report-Nov 16,  Occidental Petroleum Corp. has reported a third-quarter adjusted profit of $977 million or $1 per share, supported by higher domestic oil and gas sales volumes amid a fall in realized prices in the United States and abroad.

The figure surpassed brokerage analysts’ estimates compiled by Zacks. It is 25 percent higher than the consensus estimate of 80 cents.

Before adjustments for non-recurring or extraordinary items, net income was $964 million or $0.98 per share, according to results published online by the Houston, Texas-based hydrocarbons and chemicals producer.

Third-quarter 2024 revenues and other income totaled $7.15 billion, down from $7.4 billion for the corresponding year-ago period.

Revenues from customers totaled $7.02 billion, down from $7.27 billion for the third quarter last year. Oil and gas revenue accounted for $5.7 billion, up from $5.59 billion for the comparable 2023 period. Occidental’s chemical segment generated $1.25 billion, while midstream and marketing contributed $287 million, both down year-on-year.

In the U.S., net sales volumes made a $474 million increase impact on oil and gas revenue while realized prices made a $281 million decrease impact. Overseas, both volumes and realized prices declined.

Total company production landed at 1.41 million barrels of oil equivalent a day (boed), exceeding the midpoint of guidance by 22,000 boed, supported by Occidental’s acquisition of Permian Basin competitor CrownRock LP. The $12.4 billion purchase was completed in the third quarter.

Oil and gas pre-tax income came at $1.2 billion, impacted by losses from asset sales. In September, Permian Resources Corp. completed its acquisition of Delaware Basin acreage and midstream infrastructure from Occidental for about $818 million. Occidental launched a $4.5 billion-$6 billion divestiture program when it announced its purchase of CrownRock late last year. 

Using proceeds from divestitures and cash on hand, Occidental repaid $4 billion of debt during the first nine months of 2024. As of September it had $1 billion of debt maturities in the next 12 months, according to its results disclosure on the U.S. Securities and Exchange Commission.

In the second quarter of 2024 Occidental accrued new debt consisting of term loans due 2025 and 2026 with a combined principal amount of $4.7 billion and senior unsecured notes due 2027, 2029, 2032, 2034 and 2054 with a total principal amount of $5 billion.

In August Occidental raised $700 million from the sale of 19.5 million common shares representing limited partner interests in Western Midstream Partners LP and made a secondary offering consisting of 100 percent of the stock portion of the CrownRock acquisition, or nearly 29.6 million shares.

Occidental had $9.54 billion in current liabilities at the end of the third quarter, while its current assets stood at $9.55 billion.