Occidental Petroleum (NYSE:OXY) announced its second-quarter earnings, revealing a 6% increase in production but falling short of profit expectations. The decline in earnings was attributed to lower oil and gas prices and a writedown related to the exit from some operations.
Due to weaker oil and gas prices impacting U.S. oil producers following a robust year in 2022, wherein energy prices surged amid Russia’s invasion of Ukraine, Occidental Petroleum’s average realized price for oil declined by 32% to $73.59 per barrel during the April-June quarter. Additionally, gas prices plummeted by 78% to $1.36 per thousand cubic feet.
Despite the profit miss, the company’s production performed better than anticipated in the quarter, with daily output reaching 1.2 million barrels of oil equivalent (boepd). As a result, Occidental Petroleum raised its full-year production guidance by 1%, now expecting to produce between 1.19 million boepd and 1.24 million boepd, compared to the previous midpoint estimate of 1.195 million boepd.
Occidental Petroleum also made a strategic decision not to pursue further exploration in Wyoming’s Powder River Basin, incurring a $164 million after-tax impairment charge associated with the properties. As of the end of 2022, the company held an interest in over 300,000 net acres in the Powder River Basin and had planned to operate one drilling rig in 2023, according to its annual report.
The adjusted profit for the second quarter stood at 68 cents per share, falling short of analysts average estimate of 72 cents, as per Refinitiv data.
In contrast, rival U.S. oil producers Marathon Oil (NYSE:MRO) and APA Corp (NASDAQ:APA) reported strong quarterly earnings, surpassing analysts’ estimates due to higher-than-expected output.
Marathon Oil revised its full-year production forecast to exceed the previous midpoint guidance of 190,000 barrels of oil per day while maintaining a capital spending range of $1.9 billion to $2 billion.
Similarly, Apache stated that its output was in line with its full-year production guidance of 404,000 to 408,000 boepd. However, the company adjusted its full-year exploration and production spending outlook to $1.9 billion, down from the previous range of $1.9 billion to $2 billion, citing no additional drilling in Suriname in 2023 and deferred drilling activity in the UK North Sea.
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Author Faith Yakubu 
