Occidental Petroleum Sees Profit Decline Amid Lower Oil & Gas Prices

Occidental Petroleum (NYSE:OXY) reported a drop in profits from its core oil and gas operations in the third quarter, though stronger-than-expected group-wide earnings provided a degree of optimism. Like its industry peers, the company has faced challenges from declining oil and gas prices.

For the quarter, Occidental’s average worldwide realized crude oil prices fell by 6% from the previous three-month period to $75.33 per barrel. Similarly, average natural gas liquids prices declined by 4% to $20.47 per barrel. These price drops weighed heavily on the company’s performance, contributing to a 25% quarter-over-quarter reduction in operating profit from oil and gas operations, which totaled $1.2 billion.

The Texas-based firm also absorbed a $572 million hit from losses tied to asset sales earlier this year. Properties sold to Permian Resources and another unnamed buyer generated proceeds of $970 million, which were used to reduce the company’s debt burden. By the end of the quarter, Occidental’s long-term debt had decreased to $25.46 billion, a $4 billion reduction that brought the company close to achieving 90% of its near-term repayment target. The debt reduction was partly driven by the $12 billion acquisition of shale producer CrownRock.

Additional challenges emerged in Occidental’s chemicals unit, which reported a $304 million profit, down from $373 million in the same quarter last year. However, the midstream division provided some relief, buoyed by derivatives gains and the $490 million sale of shares in Western Midstream Partners.