Lower Crude Oil Prices Hurt Occidental Petroleum Q2 Results

Occidental Petroleum Corp. recently announced a drop in its second quarter profits by almost 27 percent due to the decline in the cost of natural gas and the per barrel price of crude.

In quarter two of the present year, oil and natural gas companies, such as Occidental, encountered decreasing per barrel prices of crude and the lowest natural gas prices seen in ten years.

The net earnings of the company from April to June this year was $1.64 a share, or $1.33 billion. During the same quarter last year, its net revenue was equivalent to $2.23 a share, or $1.82 billion. Profits declined by 6.6% within the period to $5.77 billion.

Despite the drop in income, FacSet said that the results were still better than the expectations on Wall Street of $1.60 a share, or a total profit of $5.48 billion.

Occidental’s average oil price per barrel for the second quarter was $99.34. That rate is lower by 3.7 % compared to last year’s price for quarter two. Moreover, natural gas fell by over 50% to $2.09 for every 1,000 cubic feet. The company grew its output of oil and gas by 7.1% in the second quarter, which helped compensate for the reduced oil price per barrel.

Still, the oil and gas business of Occidental fell by 2.1%. Moreover, sales also declined by almost 11.5% in the petrochemical division of the company partly due to the lower volume and cost of export. The midstream department, which includes pipelines and storage, also decreased by 40.6%.

By: Chris Termeer

Chris Termeer

Chris Termeer is an oil and gas consultant, industry commentator and analyst. His book, Fundamentals of Investing in Oil and Gas provides a comprehensive overview of all aspects of the oil and gas industry, including exploration, drilling, production, storage, transportation and refining, to name but a few.

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