Occidental posts bigger-than-expected loss as pandemic slams oil prices

(Reuters) - Occidental Petroleum Corp on Monday posted a $8.35 billion second-quarter loss on lower energy prices and write downs as the COVID-19 pandemic sapped fuel demand and hammered prices at a time when the U.S. oil producer has been trying to reduce debt.

Occidental, which borrowed heavily to finance its $38 billion purchase of rival Anadarko Petroleum last year, cut the value of its oil and gas properties by $6.6 billion, joining BP, Chevron and Total in massive write downs as the industry now expects energy prices to stay low for years.

The average price Occidental received for crude oil plummeted about 61% to $23.17 per barrel in the second quarter as oil prices crashed. It has cut jobs, slashed its dividend, reduced its spending plans and sold assets to shore up its finances.

It expects to receive $2 billion or more in asset sales in the near term, according to an investor presentation.

Among the assets Occidental is trying to sell is a package of land and minerals in Wyoming and Colorado it acquired with the purchase of Anadarko. Bids were due last month and the company has said that it hopes to close that sale by early in the fourth quarter.

Occidental said in June it would replace $9.12 billion in notes due in 2021 and 2022 and issue new notes that would remove provisions that could have pushed it into default.

Its net loss was $8.35 billion, or $9.12 per share, in the quarter, compared with earnings of $635 million, or 84 cents per share, a year earlier.

The company booked $1.58 billion from tax refunds during the quarter, which helped reduce its operating loss.

Excluding one-time items, the company lost $1.76 per share, compared with analysts’ average estimates of $1.68, according to Refinitiv IBES.

Reporting by Jennifer Hiller in Houston and Arathy S Nair in Bengaluru; Editing by Sriraj Kalluvila and David Gregorio

Our Standards:The Thomson Reuters Trust Principles.
Reuters, 11 Aug, 2020

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