Oxy trims losses in 1st quarter amid oil’s rebound
Occidental Petroleum trimmed its losses in the first quarter as crude prices rebounded from the worst oil bust in decades.
The Houston independent oil producer on Monday said it lost $346 million in the first three months of the years, compared with a loss of $2.2 billion in the same period a year earlier. First quarter revenue fell to $5.5 billion, compared with nearly $6.7 billion in the year earlier, but has improved from about $4.1 billion in the fourth and third quarters. Oxy’s results beat Wall Street expectations.
Oil exploration and production companies appear to be putting the pandemic behind them. Some earned profits for the first time since oil markets crashed a year ago.
The rollout of vaccines has lifted many economies, bolstering crude demand and prices. West Texas Intermediate, the U.S. benchmark, settled at $65.28 a barrel Tuesday, up from $24 a year ago.
Drillers have brought more than
200 rigs back into operation since August, bringing the U.S. rig count to 448, according to oil-field services firm Baker Hughes and research firm Enverus. Exploration and production companies added 4,300 jobs in March, the largest single month gain in nearly a decade, according to the Texas Oil and Gas Association.
Oxy said higher prices for crude oil and natural gas contributed to its higher earnings. The average global price of Oxy’s crude oil increased by 37 percent from the fourth quarter to $55.65 per barrel in the first quarter. The average U.S. price of Oxy’s natural gas increased by 65 percent from the fourth quarter to $2.56 per thousand cubic feet.
Oxy, however, said it took an $83 million financial hit from the February winter storm, which temporarily disrupted production and sales across several facilities and increased the cost of raw materials, primarily ethylene and electricity.
Oxy, which has been selling assets to pay down its debt, said it gained $79 million during the first quarter from the sale of 11.5 million limited partner shares in Western Midstream Partners, a pipeline subsidiary it acquired in its 2019 takeover of Anadarko Petroleum.
Even as oil markets improve and crude demand rises, Oxy said it will focus on repaying its nearly $35.5 billion of long-term debt related to its acquisition of Anadarko.