- Texas oil driller on the hunt for acquisiton opportunities
- Cash holdings expanded by 18 percent to $3.75 billion
Occidental Petroleum Corp., the world’s largest independent oil explorer, posted its first second-quarter loss in more than two decades as the slump in global crude markets entered its third year.
Occidental swung to a loss of $139 million, or 18 cents a share, from a profit of $176 million, or 23 cents, a year earlier, the company said in a statement on Wednesday. The per-share result was in line with the 18-cent average loss expected by 24 analysts in a Bloomberg survey.
The Houston-based explorer is searching for acquisitions in the Permian Basin region of West Texas and New Mexico, with a preference for asset purchases over corporate takeovers, Chief Executive Officer Vicki Hollub said during a conference call with analysts and investors Wednesday. The company cut its total costs per barrel of production to $27 this year from $40 in 2015, she said.
“Our strong balance sheet provides us with the flexibility to pursue attractive opportunities, including reinvesting in the business, while allowing us to deliver on our commitment of returning cash to our shareholders,” Hollub said.
Full-year oil and natural gas production will be near the higher end of the company’s previously announced 4 percent to 6 percent target, according to the statement. Occidental increased its cash holdings by 18 percent during the period to $3.75 billion, and last month boosted its quarterly dividend by 1.3 percent to 76 cents a share.
Occidental shares rose 0.2 percent on Tuesday to $73.25 at 10:28 a.m. in New York and have advanced 8.2 percent this year.
Excluding the impact of asset sales, production rose 10 percent to the equivalent of 609,000 barrels of oil a day, according to the statement. Since becoming CEO in April, Hollub has continued her predecessor Stephen Chazen’s efforts to divest the company’s weaker-performing assets in parts of the U.S., Middle East and North Africa.
U.S. crude fell 21 percent to an average of $45.64 a barrel during the April-to-June period from $57.95 a year earlier, according to data compiled by Bloomberg.