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.”

©Copyright 2000 Intelligence Press Inc. All rights reserved. Thepreceding news report may not be republished or redistributed, inwhole or in part, in any form, without prior written consent ofIntelligence Press, Inc.