Occidental Petroleum Corp. (OXY), the largest onshore crude producer in the continental U.S., said fourth-quarter profit rose 35 percent on higher oil prices and record output from new drilling in California, Texas and North Dakota.
Net income climbed to $1.63 billion, or $2.02 a share, from $1.21 billion, or $1.47, a year earlier, Los Angeles-based Occidental said in a statement today. Per-share profit excluding costs for selling its Argentine operations was five cents more than the average of 19 analysts’ estimates compiled by Bloomberg. Sales rose 19 percent to $6.03 billion.
U.S. oil and natural-gas production was 449,000 barrels a day, breaking a record set in the previous quarter. Global production during the last three months of the year fell to the equivalent of 748,000 barrels a day from 753,000 a year earlier after Occidental sold assets in Argentina to focus on opportunities in emerging U.S. oil fields.
Occidental extracted 1,000 barrels of crude in the fourth quarter from Libya, its first production in the country since the overthrow of Muammar Qaddafi last year. In December, the company also lost some of its ability to produce in Yemen, making a shift toward growth in the U.S. more important, Weiss said.
Occidental also continued to increase output in Iraq, raising its share of what it produces there to 9,000 barrels compared to 4,000 in the three months that preceded the quarter.
The company’s 2011 output fell to the equivalent of 733,000, a decline of 2.7 percent from the previous year, the first time Occidental’s oil production has declined since 2005, according to the company’s filings with the U.S. Securities and Exchange Commission.
Chief Executive Officer Stephen I. Chazen, who took over in May, has said the company’s U.S. crude production will grow by as much as 48,000 barrels a day in 2012, much of it in California. Occidental owns about 870,000 acres of land in the Monterey Shale, which holds more than 15 billion barrels of oil, according to the U.S. Energy Information Administration.
“The outlook for the California play is really the company-maker in the eyes of all the investors that we’re talking to,” Fadel Gheit, an analyst at Oppenheimer & Co. LLC in New York, said in a telephone interview before earnings were released. “The only upside potential going forward is the results of drilling in California.”
Occidental sold crude in the fourth quarter for an average of $99.62, a 25 percent increase over the same period a year ago, according to the statement.
Oil futures traded in New York jumped 10.3 percent to average $94.06 a barrel during the last three months of the year on speculation that the U.S. economy will continue to recover and sanctions in Iran may cut off the flow of oil from the world’s fourth-largest crude-producing country. Prices for West Texas Intermediate crude, the U.S. benchmark, traded at an average of $85.24 a year earlier.
Occidental fell 0.4 percent to $100.49 at 9:32 a.m. in New York.
To contact the reporter on this story: Bradley Olson in Houston at firstname.lastname@example.org
To contact the editor responsible for this story: Susan Warren at email@example.com