(Reuters) – Occidental Petroleum Corp. posted a $ 8.35 billion loss in second-quarter lower energy prices and depreciation on Monday as the U.S. oil producer sought to reduce debt amid a pandemic that fueled demand and prices has decreased. Occidental, which borrowed heavily from last year’s $ 38 billion acquisition of rival Anadarko Petroleum, cut the value of its oil and gas properties by $ 6.6 billion, closing BP, Chevron and Total to in massive write-downs, as the sector now expects energy prices to remain low for years.
Oil and gas production will fall 13% this year, and another 5% in the fourth quarter, to 1.16 million tons of oil and gas per day, the company said. In the Permian, where it became the largest operator through the acquisition of Anadarko, shale production will drop 37% this year, it said.
Shares fell nearly 6% in late trading after rising $ 1.03 to $ 16.48. The share is down 61% so far this year.
The average price Occidental received for crude oil fell about 61% in the second quarter to $ 23.17 per barrel when oil prices crashed. It has cut jobs, reduced its dividend, reduced savings plans and sold assets to increase its finances.
It expects to receive $ 2 billion or more in asset sales, according to the presentation.
Among the properties Occidental is trying to sell is a package of land and minerals in Wyoming and Colorado. The company said it hopes to close that sale in the fourth quarter.
Net loss was $ 8.35 billion, or $ 9.12 per share, in the quarter, compared to revenue of $ 635 million, or 84 cents per share, a year earlier.
Excluding one-time items, the company lost $ 1.76 per share, compared to analysts’ average estimate of $ 1.68, according to Refinitiv IBES.
(Report by Jennifer Hiller in Houston and Arathy S Nair in Bengaluru; Edited by Sriraj Kalluvila, David Gregorio and Aurora Ellis)
