Occidental Petroleum (NYSE:OXY) reported a drop in profits from its core oil and gas operations in the third quarter, though stronger-than-expected group-wide earnings provided a degree of optimism. Like its industry peers, the company has faced challenges from declining oil and gas prices.
For the quarter, Occidental’s average worldwide realized crude oil prices fell by 6% from the previous three-month period to $75.33 per barrel. Similarly, average natural gas liquids prices declined by 4% to $20.47 per barrel. These price drops weighed heavily on the company’s performance, contributing to a 25% quarter-over-quarter reduction in operating profit from oil and gas operations, which totaled $1.2 billion.
The Texas-based firm also absorbed a $572 million hit from losses tied to asset sales earlier this year. Properties sold to Permian Resources and another unnamed buyer generated proceeds of $970 million, which were used to reduce the company’s debt burden. By the end of the quarter, Occidental’s long-term debt had decreased to $25.46 billion, a $4 billion reduction that brought the company close to achieving 90% of its near-term repayment target. The debt reduction was partly driven by the $12 billion acquisition of shale producer CrownRock.
Additional challenges emerged in Occidental’s chemicals unit, which reported a $304 million profit, down from $373 million in the same quarter last year. However, the midstream division provided some relief, buoyed by derivatives gains and the $490 million sale of shares in Western Midstream Partners.
At CWEB, we are always looking to expand our network of strategic investors and partners. If you're interested in exploring investment opportunities or discussing potential partnerships and serious inquiries. Contact: jacque@cweb.com