Occidental Profits Plunge on Lower Prices

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Occidental Petroleum Corp. on Thursday said its second quarter net income dropped 70 percent largely due to lower oil and natural gas prices. However, its results still exceeded Wall Street expectations.

The Los Angeles oil and gas exploration company reported second quarter net income of $682 million (84 cents per share), compared with $2.3 billion ($2.78) a year ago. Net sales fell 48 percent to $3.7 billion.

Analysts surveyed by Thomson Reuters on average expected earnings of 80 cents a share on net sales of $3.8 billion.

Occidental said its worldwide realized price for crude oil in the quarter was $52.97 a barrel, compared with $110.12 a barrel a year earlier. Domestic realized natural gas prices fell to $2.87 per thousand cubic feet compared with $9.99 a year ago.

But Chief Ray R. Irani noted that the company has seen production growth of 10 percent in the quarter and was up nearly nine percent for the first months of 2009. “Our discovery in Kern County, which was announced (Wednesday) should also contribute to our future growth,” Irani said in a statement, referring to a new discovery estimated at 150 million to 250 million gross barrels of oil equivalent that the company says is the largest new find in California in 35 years.

Occidental shares were up $1.75, or 2.5 percent, to $71.74 in midday trading on the New York Stock Exchange.