LONDON: Occidental Petroleum Corp. (Oxy) posted a $8.35bn second-quarter loss on lower energy prices and write-downs as the US oil producer has been trying to reduce debt amid a pandemic that has sapped fuel demand and prices.
Oxy, which borrowed heavily to finance last year’s $38bn purchase of Anadarko Petroleum, cut the value of its oil and gas properties by $6.6bn, 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 13 per cent this quarter over last, and another 5 per 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 37 per cent this year, it said.
The average price Occidental received for crude oil plummeted about 61 per cent to USD23.17 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 USD2 billion or more in asset sales. 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 USD8.35 billion, or USD9.12 per share, in the quarter, compared with earnings of USD635 million, or 84 cents per share, a year earlier.