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Oxy More Than Triples Net Income in Q3
Producers are in for a very profitable year if recent third quarterearnings reports are any indication. Following on EOG’s announcementTuesday of a 250% earnings hike, Occidental Petroleum Corp. (Oxy)Wednesday reported a three-fold increase in third quarter earningscompared to the same period last year, going from $126 million ($0.35per share) in 3Q99 to $402 million ($1.09 per share) in 3Q2000 (seeDaily GPI, Oct. 18).
The successful performance is mainly the result of highercommodity prices. Oxy’s earnings before special items for the thirdquarter were $370 million ($1.00 per share) as opposed to last yearfor the same time period when the company posted $125 million ($.35a share). Oxy’s oil and gas division earned $690 million beforespecial items, compared to $279 million in 3Q99.
Although commodity costs played a large part in the increase, thecompany also cited an increase in production volumes due to itsacquisition of Altura Energy from Shell Exploration & ProductionCo. and BP during the second quarter of 2000 (see Daily GPI, March 9). Its domestic gas productionlevels rose from 673 MMcf/d during 3Q99 to 687MMcf/d for 3Q2000, whiledomestic liquids (mostly crude) rose from 71,000 b/d to 210,000 b/d.
“When we announced our intention to purchase Altura Energy, wemade a commitment to reduce our total debt by $2 billion by the endof this year from the $9 billion pro-forma level reached in Aprilof this year as a result of purchasing Altura,” said Oxy CEO Dr.Ray R. Irani. “The reduction is being made through a combination ofasset sales and cash flow. Thanks to strong oil and gas prices andproduction from the Altura properties, we have reached that goalthree months ahead of schedule.”
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