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Occidental Petroleum reported better than expected Q2 earnings Wednesday $OXY will become the biggest Permian Basin producer after Anadarko shareholders vote Aug. 8 on the $38 billion sale. ExxonMobil and Chevron report Friday


Oil Gas Sunset

Guidance on exploration and production spending is key as oil prices have stablized recently but natural gas prices continued to fall, with U.S. drilling and production have near record highs  Oil service giants Schlumberger $SLB and Baker Hughes, a GE Co $BHGE having reported slowng activity metrics while Haliburton warned about the Permian bottleneck.

Occidental Petroleum Corporation NYSE: OXY Reported After Cloe Wednesday

$0.97 EPS Beat $0.91 AND $4.42B Beat $4.32 Billion Forecast in Revenue

Earnings

Occidental reported for the second quarter EPS of 97 cents on revenue of $4.42 billion, with total average daily production volumes of 741,000 barrels of oil equivalent, up 16% from a year ago. Analysts saw EPS falling 17% to 91 cents, on revenue is seen rising 5.6% to $4.32 billion.

Higher production was offset by weaker prices, with the realized price for its oil and U.S. natural gas off 6.7% and 85%, respectively, from a year earlier.

Occidental Petroleum Corporation NYSE: OXY

Market Reaction >After hours $51.40 +0.040 (+0.078%)

OXY Combined portfolio

Highlights

  • Total average daily production volumes reached 741,000 barrels of oil equivalent, up 16% from a year ago. Permian Resources average daily production of 289,000 BOE was up 44% from a year ago and 11% from Q1, due to improved well performance and development activity.
  • Operating profit in oil and gas fell 7% to $726 million,
  • Profit in chemicals fell 34% to $208 million
  • Pipeline profit rose 32% to $331 million, compared with year-ago figures.
  • Profits were hurt by $107 million in one-time costs, including Anadarko-related transaction and debt financing fees.
  • Occidental and EcopetrolEC also agreed to form a joint venture to develop 97,000 net acres of Occidental's Midland Basin assets in the Permian Basin. Oxy will own 51% of the JV.

Outlook

OXY Guidance Q2 19

OXY OIl hedges Q2 19

In May, Occidental topped Chevron's (CVX) offer to acquire Andarko Petroleum (APC) to gain access to Anadarko's Permian Basin acreage. The deal is expected to close in the second half of this year. Once that buyout is finalized, Occidental will become the biggest Permian Basin producer. Anadarko shareholders will vote Aug. 8 on the $38 billion sale

 The deal led to some more merger activity in the area. Callon Petroleum (CPE) announced earlier this month that it would buy Carrizo Oil & Gas (CRZO) in an all-stock deal to expand its Permian Basin acreage. Occidental is battling activist investor Carl Icahn blasted the Anadarko deal for what he says are overly favorable terms for Warren Buffett. Berkshire Hathaway (BRKB) agreed to provide $10 billion in equity financing to aid Occidental's bid.

Source: OXY

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