By August 3, 2016 Read More →

Occidental Petroleum sees 2016 production at high-end of forecast

Occidental Petroleum

Occidental Petroleum says higher fracturing productivity has resulted in drastically lower costs for each new well as well as increased yields.  Company photo.

Occidental Petroleum takes advantage of falling services costs

Aug 3 (Reuters) – Occidental Petroleum Corp said it expects to grow 2016 production at the high end of its forecast of a 4-6 percent increase, while staying within its budget of $3 billion, helped by productivity and efficiency gains.

A fall in costs of oilfield services, coupled with increased productivity in the hydraulic fracturing process, has resulted in drastically lower costs for each new well, while yielding more barrels.

Occidental said its production from U.S. fields increased to 302,000 barrels of oil equivalent per day (boe/d) in the second quarter from 298,000,000 boe/d a year earlier, with increased output from its Permian resources in west Texas and southeast New Mexico contributing to that rise.

The company’s production from ongoing operations, including its international business, rose to 609,000 boe/d from 552,000 boe/d.

Occidental said it continues to reduce its exposure to non-core operations in the United States, the Middle East and North Africa.

Occidental’s total cash operating costs for oil and gas production declined nearly 16 percent, but were outpaced by a 27 percent fall in revenue.

The company’s net loss was $139 million, compared with a profit of $176 million, a year earlier..

Occidental’s loss per share of 18 cents matched analysts’ average estimate, according to Thomson Reuters I/B/E/S.

Revenue of $2.56 billion missed expectations of $3.04 billion.

(Reporting by Swetha Gopinath in Bengaluru; Editing by Maju Samuel)

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