Producers are in for a very profitable year if recent thirdquarter earnings reports are any indication. Occidental Petroleumreported a three-fold increase in third quarter earnings comparedto the same period last year, going from $126 million ($0.35 pershare) in 3Q99 to $402 million ($1.09 per share) in 3Q2000. Thesuccessful performance is mainly the result of higher commodityprices. Oxy’s earnings before special items for the third quarterwere $370 million ($1.00 per share) as opposed to last year for thesame time period when the company posted $125 million ($.35 ashare). Oxy’s oil and gas division earned $690 million beforespecial items, compared to $279 million in 3Q99. Although commoditycosts played a large part in the increase, the company also citedan increase in production volumes due to its acquisition of AlturaEnergy from Shell Exploration & Production Co. and BP duringthe second quarter of 2000. Its domestic gas production levels rosefrom 673 MMcf/d during 3Q99 to 687MMcf/d for 3Q2000, while domesticliquids (mostly crude) rose from 71,000 b/d to 210,000 b/d.
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Occidental Petroleum beat analysts’ third quarter earningsexpectations by a solid 10 cents/share. Higher gas and oil pricesand improved performance from its chemicals division produced netincome of $126 million ($0.35/share) for the third quarter, 232%higher than the $38 million ($0.10/share) posted in 3Q98. Earningsbefore special items were $125 million compared with only $3million in 3Q98.
Ingleside Cogeneration, L.P., a joint venture subsidiary ofOccidental Petroleum Corp. and Conoco, has completed a $200million, 440 MW cogeneration facility in South Texas. The plant hasstarted providing power for the adjacent OxyChem and DuPontchemical facilities, officials for the joint venture saidyesterday. In addition, enough excess electrical power will be soldinto the newly deregulated Texas grid for 75,000 homes andbusinesses.
Canadian Occidental Petoleum Ltd., an independent global energyand chemical company, sold oil and gas properties worth $370million in order to take the bite out of low commodity prices, thecompany said Wednesday. This brings CanadianOxy’s 1998 propertysales to $630 million. The company did not disclose who bought theproperties. An additional $235 million of sales are expected beforethe end of January 1999.
Occidental Petroleum’s oil and gas drilling subsidiary laid off80 employees in Bakersfield, CA, on Wednesday, and will eliminateanother 130 jobs as part of a restructuring triggered by low crudeoil prices and its poor stock price performance. The subsidiary’swork force at its Bakersfield headquarters will be pared down to135 by eliminating 210 jobs and transferring another 50 employees.The company’s stock price plummeted last month to a new 52-week lowof 17 3/4 from a high of 30 3/4. It’s stock closed up 9/16 onWednesday following the announcement, but fell 1/8 Thursday to 221/8.