Occidental Petroleum pleased with Permian production raises 2016 growth forecast

Occidental Petroleum raises 2016 production growth forecast

Occidental Petroleum

Occidental Petroleum says greater-than-expected production from its Permian Basin assets buoyed the company, allowing it to raise its production forecast this year. DallasNews.com photo.

May 5 (Reuters) – Occidental Petroleum Corp raised its production forecast for this year, while keeping its $3 billion spending target unchanged, buoyed by lower operating costs and greater-than-expected production from its assets in the Permian Basin.

The company expects oil and gas production to rise 4-6 percent this year, compared with its earlier forecast of 2-4 percent.

Occidental said its production from U.S. fields increased by 17,000 boe/d to 307,000 boe/d in the first quarter, with all of that increase attributable to Permian resources spread over west Texas and southeast New Mexico.

Production from ongoing operations, including its international business, rose to 590,000 barrels of oil equivalent per day from 531,000 boe/d.

refineryCrownquest Operating LLC uses EndurAlloy™ production tubing to cut Permian Basin well operating costs

Occidental is in the process of reducing exposure to non-core operations in the Middle East and North Africa region, including Bahrain, Iraq and Yemen.

“We continued lowering our cost structure through improved operating and capital efficiencies,” Chief Executive Vicki Hollub said in a statement.

The company’s total cash operating costs for oil and gas production declined 23 percent in the quarter, but that fall was more than offset by a 26 percent fall in revenue, leading to a bigger-than-expected loss.

Core loss was 56 cents per share, much wider than analysts’ average estimate of 40 cents per share, according to Thomson Reuters I/B/E/S.

Revenue of $2.28 billion was also lower than expectations of $2.35 billion.

(Reporting by Swetha Gopinath in Bengaluru; Editing by Don Sebastian)

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